Essential Utilities (WTRG) AI Stock Analysis

• Market Cap: $11.20B
• Dividend Yield: 3.39%
• Average Volume (3M): 2.22M
• Price to Earnings (P/E): 16.4
• Beta (1Y): -0.10
• Revenue Growth: 21.35%
• EPS Growth: 20.96%
• Country: US
• Employees: 3,291
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Water
• EPS (TTM): 0.33
• Shares Outstanding: 282,975,520
• 10 Day Avg. Volume: 2,073,896
• 30 Day Avg. Volume: 2,217,808
• PEG Ratio: 1.00
• Price to Book (P/B): 1.60
• Price to Sales (P/S): 4.77
• P/FCF Ratio: -17.78
• Enterprise Value/Market Cap: 1.71
• Enterprise Value/Revenue: 8.07
• Enterprise Value/Gross Profit: 13.54
• Enterprise Value/Ebitda: 14.14
• 1Y Price Target: $43.71
• Price Target Upside: 11.02% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8
• EPS Forecast (FY): 2.12
• Revenue Forecast (FY): $2.35B

• Rating: 72 Outperform
• Price Target: $44.00 ▲(11.76% Upside)

Essential Utilities' strong earnings growth and infrastructure investments are key strengths, supported by a stable financial position. However, negative free cash flow and regulatory challenges present risks. The stock's valuation is reasonable, and technical indicators suggest a neutral trend.

Positive Factors

Revenue Growth

Strong revenue growth indicates effective pricing strategies and market demand, supporting long-term financial stability and expansion.

Infrastructure Investment

Significant infrastructure investments enhance service reliability and capacity, positioning the company for sustained growth and regulatory compliance.

Dividend Growth

Consistent dividend growth reflects strong cash flow management and commitment to shareholder returns, enhancing investor confidence.

Negative Factors

Negative Free Cash Flow

Negative free cash flow can strain financial resources, limiting the ability to fund operations and investments without raising additional capital.

Rising Debt Levels

Increased debt levels may lead to higher interest expenses and reduced financial flexibility, posing risks to long-term financial health.

Regulatory Challenges

Regulatory challenges can delay projects and impact revenue, creating uncertainty and potential financial strain over the medium term.

Essential Utilities Business Overview & Revenue Model

Company Description

Essential Utilities, Inc., through its subsidiaries, operates regulated utilities that provide water, wastewater, or natural gas services in the United States. It offers water services through operating and maintenance contract with municipal authorities and other parties. The company also provides non-utility raw water supply services for firms in the natural gas drilling industry; and water and sewer line protection solutions, and repair services to households through a third-party. It serves approximately 7.5 million residential water, commercial water, fire protection, industrial water, wastewater, and other water and utility customers in Pennsylvania, Ohio, Texas, Illinois, North Carolina, New Jersey, Indiana, Virginia, West Virginia, and Kentucky under the Aqua and Peoples brands. The company was formerly known as Aqua America, Inc. and changed its name to Essential Utilities, Inc. in February 2020. Essential Utilities, Inc. was founded in 1886 and is headquartered in Bryn Mawr, Pennsylvania.

How the Company Makes Money

Essential Utilities generates revenue primarily through the provision of water and natural gas services to its customers. The company's revenue model is based on regulated utility rates, which are determined by state Public Utility Commissions (PUCs). These rates allow the company to recover costs associated with providing services, including operational expenses, infrastructure investments, and a reasonable return on equity. Key revenue streams include residential and commercial customer fees, as well as charges for additional services such as maintenance and new connections. Additionally, Essential Utilities may benefit from strategic acquisitions of smaller utility companies, enhancing its customer base and operational efficiencies. The company also focuses on sustainability initiatives, which can lead to potential incentives and grants from government agencies aimed at promoting environmental responsibility.

Essential Utilities Financial Statement Overview

Summary

Essential Utilities demonstrates solid financial performance with strong profitability and revenue growth. The balance sheet is stable, though rising debt levels warrant attention. Cash flow management is a concern, particularly with negative free cash flow, which could impact future financial flexibility.

Income Statement

Essential Utilities shows a strong income statement with consistent revenue growth and solid profit margins. The TTM data indicates a gross profit margin of 59.4% and a net profit margin of 27.6%, both of which are healthy for the industry. Revenue growth has been positive, albeit modest, at 1.78% TTM. The EBIT and EBITDA margins are also robust at 39.98% and 56.74% respectively, indicating efficient operations. However, the slight decline in EBIT margin from the previous year suggests some pressure on operational efficiency.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 1.16, which is manageable but slightly elevated for the industry. Return on equity is decent at 10.1%, showing effective use of equity capital. The equity ratio stands at 36.1%, indicating a balanced capital structure. However, the increase in total debt over the years could pose a risk if not managed carefully.

Cash Flow

Cash flow analysis reveals some challenges, particularly with free cash flow, which is negative and has shown a decline in growth. The operating cash flow to net income ratio is strong at 1.53, indicating good cash generation relative to net income. However, the negative free cash flow to net income ratio of -0.52 highlights potential issues in covering capital expenditures and dividends from operating cash flows.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.38B	2.09B	2.05B	2.29B	1.88B	1.46B
Gross Profit	1.42B	1.22B	1.13B	1.07B	987.30M	768.34M
EBITDA	1.36B	1.25B	1.06B	1.01B	927.66M	710.47M
Net Income	668.45M	595.31M	498.23M	465.24M	431.61M	284.85M
Balance Sheet
Total Assets	18.89B	18.03B	16.84B	15.72B	14.66B	13.71B
Cash, Cash Equivalents and Short-Term Investments	6.40M	9.16M	4.61M	11.40M	10.57M	4.83M
Total Debt	7.95B	7.73B	7.09B	6.84B	6.02B	5.73B
Total Liabilities	12.08B	11.83B	10.95B	10.34B	9.47B	9.02B
Stockholders Equity	6.82B	6.20B	5.90B	5.38B	5.18B	4.68B
Cash Flow
Free Cash Flow	-464.63M	-559.40M	-265.52M	-462.46M	-375.84M	-327.62M
Operating Cash Flow	952.18M	770.34M	933.59M	600.31M	644.68M	508.02M
Investing Cash Flow	-1.46B	-1.16B	-1.22B	-1.18B	-1.06B	-4.33B
Financing Cash Flow	504.94M	397.48M	281.36M	578.83M	417.12M	1.96B

Essential Utilities Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 39.37
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WTRG, the sentiment is Positive. The current price of 39.37 is above the 20-day moving average (MA) of 39.21, below the 50-day MA of 39.41, and above the 200-day MA of 38.17, indicating a neutral trend. The MACD of 0.02 indicates Negative momentum. The RSI at 49.82 is Neutral, neither overbought nor oversold. The STOCH value of 54.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WTRG.

Essential Utilities Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AWR	73 Outperform	$2.84B	21.76	13.73%	2.64%	10.28%	13.56%
WTRG	72 Outperform	$11.20B	16.42	10.29%	3.39%	21.35%	20.96%
SBS	70 Outperform	$18.24B	14.32	16.99%	2.10%	-10.23%	-26.87%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
CWT	66 Neutral	$2.69B	19.76	8.19%	2.74%	-2.60%	-33.78%
AWK	65 Neutral	$25.38B	22.81	10.46%	2.48%	12.29%	13.13%
MSEX	55 Neutral	$939.81M	21.51	9.27%	2.69%	6.24%	3.35%

Essential Utilities Corporate Events

Essential Utilities Reports Strong Q3 2025 Earnings

Essential Utilities, Inc. is a prominent provider of water, wastewater, and natural gas services in the United States, operating under the Aqua and Peoples brands across nine states. The company is dedicated to sustainable growth and operational excellence, serving approximately 5.5 million people.

Essential Utilities Merges with American Water Works

On October 26, 2025, Essential Utilities, Inc. and American Water Works Company, Inc. entered into an Agreement and Plan of Merger, with Essential becoming a wholly owned subsidiary of American Water. The merger, unanimously approved by both companies’ boards, aims to create a leading U.S. water and wastewater utility with a combined market capitalization of approximately $40 billion. This strategic move is expected to enhance operational efficiency, expand customer reach, and provide long-term growth opportunities for employees while maintaining commitments to community support and water affordability. The merger is also anticipated to be accretive to American Water’s earnings per share in the first year post-transaction, supporting long-term growth targets for earnings and dividends.

The most recent analyst rating on (WTRG) stock is a Buy with a $43.00 price target. To see the full list of analyst forecasts on Essential Utilities stock, see the WTRG Stock Forecast page.

Essential Utilities Invests in Pennsylvania Data Center Project

On August 27, 2025, Essential Utilities announced its investment in a 1,400-acre data center project in Greene County, Pennsylvania, through its subsidiary Aqua Infrastructure, LLC. The project will include the construction of an 18 MGD water treatment plant and will be powered by natural gas combined cycle combustion turbines, supplemented by battery storage. Essential’s subsidiary Peoples Natural Gas will provide consulting and energy management services. This initiative aligns with Pennsylvania’s favorable business climate for energy and AI projects and underscores Essential’s commitment to innovation and regional economic development.

The most recent analyst rating on (WTRG) stock is a Buy with a $44.00 price target. To see the full list of analyst forecasts on Essential Utilities stock, see the WTRG Stock Forecast page.