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Pure Cycle
(NASDAQ:PCYO)
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Rating:70Outperform
Price Target:
$11.50
▲(0.88% Upside)
Action:Reiterated
Date:07/09/26
The score is driven primarily by strong financial performance (high profitability and exceptionally low leverage), supported by constructive earnings-call commentary around guidance and long-term asset value. The main offsets are inconsistent cash flow conversion/volatility and a weaker technical setup with the stock trading below key moving averages.
Positive Factors
Conservative balance sheet
Exceptionally low leverage (debt-to-equity ~0.01) provides durable financial flexibility, lowers refinancing and interest risk, and supports capital allocation optionality (infrastructure spend, phased development, opportunistic buybacks). This safety buffer matters across cycles.
Negative Factors
Weak cash conversion
Cash generation lags reported earnings and has been volatile, which can constrain funding for development, delay paydowns or buybacks, and complicate timing of capital projects. Over a multi-quarter horizon this raises execution and liquidity planning risk.
Read all positive and negative factors
Positive Factors
Negative Factors
Conservative balance sheet
Exceptionally low leverage (debt-to-equity ~0.01) provides durable financial flexibility, lowers refinancing and interest risk, and supports capital allocation optionality (infrastructure spend, phased development, opportunistic buybacks). This safety buffer matters across cycles.
Read all positive factors
Pure Cycle (PCYO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$257.84M
Dividend YieldN/A
Average Volume (3M)46.66K
Price to Earnings (P/E)17.5
Beta (1Y)0.75
Revenue Growth22.88%
EPS Growth8.17%
CountryUS
Employees44
SectorUtilities
Sector Strength65
IndustryRegulated Water
Share Statistics
EPS (TTM)0.61
Shares Outstanding24,097,370
10 Day Avg. Volume55,734
30 Day Avg. Volume46,656
Financial Highlights & Ratios
PEG Ratio1.50
Price to Book (P/B)1.70
Price to Sales (P/S)9.32
P/FCF Ratio65.88
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Pure Cycle Business Overview & Revenue Model
Company Description
Pure Cycle Corporation provides water and wastewater services in the United States. It operates in three segments: Water and Wastewater Resource Development, Land Development, and Single-Family Rental. The company engages in the wholesale water pr...
How the Company Makes Money
Pure Cycle generally generates revenue from (1) providing water and wastewater service and related fees, and (2) monetizing land and water-related assets tied to real estate development. In its utility activities, the company earns recurring reven...
Pure Cycle Earnings Call Summary
Earnings Call Date:Jul 08, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Nov 18, 2026
Earnings Call Sentiment Positive
The call emphasized strong operational execution in Q3 — $8.2M revenue, $4.3M gross profit with a 52% margin — and significant long-term value in water and land assets (e.g., Sky Ranch tap fee potential and a conservative service estimate of ~60,000 connections). Management reported accelerated lot deliveries (Q3 lot deliveries ~70% higher YoY), refreshed liquidity from early Phase 2D delivery, solid leasing demand for SFR inventory, and a clear path to reduce elevated receivables via phased bond financings. Challenges highlighted include an elevated $59M receivable/bonding profile (though planned to decline), a strategic scale-back of the SFR program (~30% reduction) amid regulatory/return uncertainty, housing market headwinds vs. 2024 peaks, and a continued disconnect between intrinsic asset value and flat share performance. On balance, operational positives, sizable long-term asset upside, and improving liquidity prospects outweigh the near-term pacing, regulatory, and receivable risks.Positive Updates
Strong Q3 Financials
Q3 revenue of $8.2 million and gross profit of $4.3 million, representing a ~52% gross margin. Management described Q3 as carrying momentum from Q2 and indicative of a more even revenue/earnings flow driven by accelerated Phase 2D activity.
Negative Updates
Receivables / Bonding Profile Elevated
Receivable/bond-funded balance noted around $59 million. Management expects staged reductions (estimated $8–$10 million repay in 2027 and $25–$28 million in a 2027–2028 refinancing), but the current elevated receivable balance represents near-term liquidity complexity and timing risk.
Read all updates
Q3-2026 Updates
Positive
Negative
Strong Q3 Financials
Q3 revenue of $8.2 million and gross profit of $4.3 million, representing a ~52% gross margin. Management described Q3 as carrying momentum from Q2 and indicative of a more even revenue/earnings flow driven by accelerated Phase 2D activity.
Read all positive updates
Company Guidance
The company reiterated FY guidance of gross revenues in a $20M–$32M range with EPS roughly in the $0.50 area (±), saying Q3 results put them ahead of schedule: Q3 revenue was $8.2M with $4.3M gross profit (≈52% gross margin) and year‑to‑date performance tracking favorably into year‑end. Management highlighted long‑term water and land economics — a conservative service estimate of 60,000 connections (implying roughly $2.5B of potential water revenue), $1,500–$1,700 of annual revenue per connection (~$100M/yr), $40,000 tap fees, and Sky Ranch metrics of 5,000 connections (3,400 residential + ~1,600 commercial) producing ~$200M of tap fees (and ~5,000 lots × ~$100k lot‑level margin = ~$500M of lot value). Operationally they delivered ~430 lots in the last 18 months, expect Phase 2E ≈159–160 lots (typical phases ≈230–250 lots), have scaled single‑family rentals to the high‑60s/low‑70s units (30–40 completed, ~30 under contract), carry a receivable balance near $59M with planned bond-driven repayments (an $8–10M paydown in 2027 and further ~$25–28M from future financings), and see an estimated $40M interchange cost (permit targeted early next year, construction late‑2027); tap and monthly fees are expected to rise modestly (~2.5–3% annually) while share repurchases remain opportunistic as liquidity strengthens.Pure Cycle Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
88
Very Positive
Cash Flow
58
Neutral
| Breakdown | TTM | Aug 2025 | Aug 2024 | Aug 2023 | Aug 2022 | Aug 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 33.73M | 26.09M | 28.75M | 14.59M | 23.00M | 17.13M |
| Gross Profit | 19.48M | 16.03M | 19.76M | 8.04M | 16.37M | 10.72M |
| EBITDA | 19.93M | 20.19M | 18.17M | 8.58M | 14.92M | 28.36M |
| Net Income | 14.73M | 13.11M | 11.61M | 4.70M | 9.62M | 20.11M |
Balance Sheet | ||||||
| Total Assets | 175.98M | 162.28M | 147.35M | 133.22M | 129.23M | 117.18M |
| Cash, Cash Equivalents and Short-Term Investments | 8.44M | 21.93M | 22.11M | 26.01M | 34.89M | 20.12M |
| Total Debt | 14.13M | 6.80M | 7.04M | 7.28M | 4.10M | 121.00K |
| Total Liabilities | 24.39M | 19.54M | 17.65M | 14.98M | 16.23M | 14.44M |
| Stockholders Equity | 151.58M | 142.74M | 129.70M | 118.23M | 113.00M | 102.74M |
Cash Flow | ||||||
| Free Cash Flow | 4.81M | 3.69M | -461.00K | -10.15M | 11.78M | 560.00K |
| Operating Cash Flow | 7.65M | 13.16M | 2.21M | -2.34M | 17.45M | 3.46M |
| Investing Cash Flow | -20.46M | -9.65M | -4.73M | -9.24M | -6.67M | -2.90M |
| Financing Cash Flow | 6.99M | -491.00K | -612.00K | 2.85M | 3.99M | 87.00K |
Pure Cycle Technical Analysis
Negative
11.40
Price Trends
10.73
Negative
10.74
Negative
10.97
Negative
Market Momentum
-0.02
Positive
48.57
Neutral
74.90
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PCYO, the sentiment is Negative. The current price of 11.4 is above the 20-day moving average (MA) of 10.86, above the 50-day MA of 10.73, and above the 200-day MA of 10.97, indicating a bearish trend. The MACD of -0.02 indicates Positive momentum. The RSI at 48.57 is Neutral, neither overbought nor oversold. The STOCH value of 74.90 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PCYO.
Pure Cycle Risk Analysis
Pure Cycle disclosed 48 risk factors in its most recent earnings report. Pure Cycle reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Pure Cycle Peers Comparison
UnderperformOutperform
Sector (66)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $257.84M | 17.54 | 9.75% | ― | 22.88% | 8.17% | |
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
65 Neutral | $350.41M | 14.97 | 9.36% | 3.87% | 5.06% | 8.72% | |
65 Neutral | $466.73M | 26.76 | 7.85% | 1.40% | 0.26% | -35.19% | |
58 Neutral | $509.78M | 21.39 | 8.89% | 2.68% | 4.38% | 7.70% | |
50 Neutral | $203.36M | 102.46 | 2.37% | 3.56% | 5.69% | -68.06% | |
46 Neutral | $285.89M | -7.39 | -129.91% | ― | 31.03% | 15.06% |
* Utilities Sector Average
PCYO
Pure Cycle
10.70
0.82
8.30%
ARTNA
Artesian Resources
33.98
1.74
5.38%
CDZI
Cadiz
3.40
0.45
15.25%
CWCO
Consolidated Water Co
29.17
0.02
0.07%
YORW
The York Water Company
31.45
1.29
4.27%
GWRS
Global Water Resources
7.07
-2.68
-27.51%
Pure Cycle Corporate Events
Business Operations and StrategyExecutive/Board ChangesStock BuybackFinancial Disclosures
Pure Cycle Reports Strong Quarterly Growth and Investments
Positive
Jul 9, 2026
Pure Cycle reported strong results for the three and nine months ended May 31, 2026, with net income rising 31% and 23% year on year to $2.9 million and $8.6 million, respectively, marking its twenty-eighth consecutive profitable quarter. Revenue ...
Executive/Board Changes
Pure Cycle Announces Resignation of Board Director Roller
Neutral
May 26, 2026
On May 21, 2026, Pure Cycle director Daniel J. Roller resigned from the company’s Board of Directors, effective immediately. The company stated that Roller’s departure was not due to any disagreement regarding its operations, policies,...
Business Operations and StrategyStock BuybackFinancial Disclosures
Pure Cycle Reports Higher Revenue and Sustained Profitability
Positive
Apr 9, 2026
On April 8, 2026, Pure Cycle reported financial results for the three and six months ended February 28, 2026, posting net income of $1.1 million and $5.7 million, respectively, its twenty-seventh consecutive profitable quarter. Revenue rose to $5....
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.