Want to see CWT full AI Analyst Report?
Top Page
California Water Service
(NYSE:CWT)
Select Model
Select Model
Rating:65Neutral
Price Target:
$54.00
â–²(6.47% Upside)
Action:Reiterated
Date:07/31/26
The score is driven primarily by stable but cash-flow-constrained fundamentals (thin/volatile free cash flow and meaningful leverage) offset by constructive operating profitability and steady revenue growth. The latest earnings call was a notable positive due to regulatory confirmations and earnings improvement, while valuation is a modest headwind given the ~26x P/E despite a ~2.5% dividend yield. Technically, the stock trend is supportive with the price above longer-term moving averages, but limited momentum indicator data reduces confidence.
Positive Factors
Regulatory approvals & large preapproved capital
The CPUC GRC decision authorizes substantial capital recoveries and near-term rate increases, materially increasing rate-base visibility. That structural regulatory support enables predictable allowed returns, durable revenue uplift and multi-year cash flow backing for planned infrastructure investments.
Negative Factors
Thin and deteriorating free cash flow
Persistent negative or minimal free cash flow after heavy capex signals reliance on external financing to fund growth and dividends. Over time this limits discretionary spending, increases refinancing needs, and raises execution risk if capital markets tighten or rates climb.
Read all positive and negative factors
Positive Factors
Negative Factors
Regulatory approvals & large preapproved capital
The CPUC GRC decision authorizes substantial capital recoveries and near-term rate increases, materially increasing rate-base visibility. That structural regulatory support enables predictable allowed returns, durable revenue uplift and multi-year cash flow backing for planned infrastructure investments.
Read all positive factors
California Water Service (CWT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.10B
Dividend Yield2.53%
Average Volume (3M)509.31K
Price to Earnings (P/E)22.5
Beta (1Y)-0.06
Revenue Growth6.43%
EPS Growth-2.99%
CountryUS
Employees1,336
SectorUtilities
Sector Strength65
IndustryRegulated Water
Share Statistics
EPS (TTM)2.23
Shares Outstanding61,839,100
10 Day Avg. Volume415,308
30 Day Avg. Volume509,305
Financial Highlights & Ratios
PEG Ratio-0.59
Price to Book (P/B)1.53
Price to Sales (P/S)2.58
P/FCF Ratio-12.04
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 Target
$56.00Price Target Upside10.41% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)2.63
Revenue Forecast (FY)$1.12B
California Water Service Business Overview & Revenue Model
Company Description
California Water Service Group (CWT), through its various subsidiaries, operates as a water utility, delivering essential water services and related offerings across several states, including California, Washington, New Mexico, Hawaii, and Texas. ...
How the Company Makes Money
CWT makes money primarily by operating regulated water utilities that charge customers for water service under rates approved by state utility regulators. The core revenue stream is water service revenue collected through customer bills, which gen...
California Water Service Earnings Call Summary
Earnings Call Date:Jul 30, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 22, 2026
Earnings Call Sentiment Positive
The call conveyed multiple strong positives: year-over-year revenue and net income growth, regulatory wins (California GRC decision with retroactive IRMA recognition and significant preapproved capital), record capex and healthy rate-base growth, robust liquidity and credit profile, continued PFAS recovery efforts, progressing strategic M&A/integration, and sustained dividend growth. Offsetting items include higher water supply and RAM-related costs, a rise in income tax expense, large ongoing capital requirements that carry execution and financing risk, pending regulatory approvals, and some dilution from ATM activity. On balance, the highlights substantially outweigh the lowlights, driven by regulatory confirmations, material revenue recognition (IRMA/deferred RAM), and continued capital/rate-base growth.Positive Updates
Quarterly Financial Improvement
Net income for Q2 2026 was $56.5M ($0.93 diluted EPS) vs. $42.2M ($0.71) in Q2 2025, representing approximately a 33.8% increase in net income and ~31% increase in EPS. Quarterly revenue rose to $309M from $265M, a ~16.6% increase year-over-year.
Negative Updates
Higher Operating Costs — Water Supply
Higher per-unit water supply costs increased operating expense by ~$6.3M in the quarter, partially offsetting revenue gains from regulatory items.
Read all updates
Q2-2026 Updates
Positive
Negative
Quarterly Financial Improvement
Net income for Q2 2026 was $56.5M ($0.93 diluted EPS) vs. $42.2M ($0.71) in Q2 2025, representing approximately a 33.8% increase in net income and ~31% increase in EPS. Quarterly revenue rose to $309M from $265M, a ~16.6% increase year-over-year.
Read all positive updates
Company Guidance
The company’s forward guidance and near‑term plans highlighted recognition and timing of regulatory recoveries and heavy capital deployment: Q2 results incorporated $15.3M of IRMA (including ~$9.2M look‑back) and recognition of ~$9.3M of deferred RAM (to be collected over the next 2 years), with Q2 net income $56.5M ($0.93/diluted) on revenue $309M (YTD net income $60.5M, $1.00; YTD revenue $523M); EPS drivers called out as customer rate changes +$0.20, IRMA +$0.15, deferred RAM +$0.11 per diluted share offset by water production costs −$0.08 and deferred RAM expenses −$0.10. Capital guidance remains robust: record $270M new plant YTD (Q2 CapEx $147M, +23.1% YoY), growth‑CapEx 10‑yr CAGR ~11.4%, rate base CAGR ~12% with an expected ~$3.5B rate base by end‑2028, PFAS budget net ~$155M (with ~$60M recoveries) and ~$30M PFAS spend YTD. Liquidity and financing posture: unrestricted cash $43.4M, restricted $45.7M, ~$395M available on the bank line, $600M credit facilities (expandable to $800M, matures Mar‑2028), $350M ATM shelf and ~$88.8M raised in Q2, plan to fund remaining 2026 CapEx and close strategic deals (NEXUS targeted by year‑end) while paying down the LOC; corporate actions include dividend $0.335/share (326th consecutive, ~7.6% 5‑yr CAGR) and S&P A+ stable. Regulatory metrics noted: CA GRC preapproved capital ~$1.45B plus ~$229M advice‑letters (~$1.7B 2024–2027), CA ROE ~10.27%, Washington settlement ~$4.12M with ROE 10.18%, new sales‑adjustment and insurance balancing mechanisms, and Washington revenue expected to begin in Q3.California Water Service Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
66
Positive
Cash Flow
45
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.05B | 1.00B | 1.04B | 794.63M | 846.43M | 790.91M |
| Gross Profit | 679.09M | 643.46M | 989.12M | 363.38M | 530.35M | 483.77M |
| EBITDA | 372.98M | 360.17M | 424.26M | 217.54M | 263.34M | 259.87M |
| Net Income | 133.21M | 128.21M | 190.81M | 51.91M | 96.01M | 101.13M |
Balance Sheet | ||||||
| Total Assets | 5.95B | 5.67B | 5.18B | 4.70B | 3.95B | 3.62B |
| Cash, Cash Equivalents and Short-Term Investments | 43.45M | 51.82M | 50.12M | 84.97M | 85.03M | 78.38M |
| Total Debt | 1.68B | 1.62B | 1.40B | 1.25B | 1.14B | 1.10B |
| Total Liabilities | 4.14B | 3.98B | 3.54B | 3.27B | 2.62B | 2.45B |
| Stockholders Equity | 1.81B | 1.69B | 1.64B | 1.43B | 1.32B | 1.17B |
Cash Flow | ||||||
| Free Cash Flow | -235.73M | -214.43M | -179.93M | -165.93M | -83.98M | -61.48M |
| Operating Cash Flow | 328.18M | 302.56M | 290.87M | 217.82M | 243.77M | 231.72M |
| Investing Cash Flow | -567.27M | -520.14M | -474.87M | -389.42M | -335.52M | -300.87M |
| Financing Cash Flow | 232.07M | 219.26M | 194.72M | 171.54M | 96.12M | 104.68M |
California Water Service Technical Analysis
Positive
50.72
Price Trends
47.95
Positive
46.16
Positive
45.36
Positive
Market Momentum
0.66
Positive
53.13
Neutral
12.99
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CWT, the sentiment is Positive. The current price of 50.72 is above the 20-day moving average (MA) of 50.55, above the 50-day MA of 47.95, and above the 200-day MA of 45.36, indicating a neutral trend. The MACD of 0.66 indicates Positive momentum. The RSI at 53.13 is Neutral, neither overbought nor oversold. The STOCH value of 12.99 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CWT.
California Water Service Risk Analysis
California Water Service disclosed 39 risk factors in its most recent earnings report. California Water Service reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
California Water Service Peers Comparison
UnderperformOutperform
Sector (66)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $26.66B | 23.21 | 10.15% | 2.51% | 6.92% | 4.00% | |
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
65 Neutral | $3.10B | 22.50 | 7.62% | 2.50% | 6.43% | -2.99% | |
65 Neutral | $11.30B | 20.23 | 8.16% | 3.46% | 13.07% | -11.65% | |
65 Neutral | $1.08B | 21.95 | 9.59% | 2.53% | 5.26% | 7.26% | |
64 Neutral | $3.36B | 24.97 | 13.06% | 2.33% | 11.68% | 5.79% | |
58 Neutral | $502.00M | 21.07 | 8.89% | 2.90% | 4.38% | 7.70% |
* Utilities Sector Average
CWT
California Water Service
50.30
5.34
11.87%
AWR
American States Water
85.40
13.02
17.98%
AWK
American Water
134.01
-4.26
-3.08%
WTRG
Essential Utilities
39.56
2.99
8.17%
MSEX
Middlesex Water Company
57.63
7.28
14.45%
YORW
The York Water Company
30.99
1.27
4.29%
California Water Service Corporate Events
Dividends
California Water Service Declares 326th Consecutive Dividend
Positive
Jul 29, 2026
On July 29, 2026, California Water Service Group’s Board of Directors declared the company’s 326th consecutive quarterly dividend, underscoring its long-standing record of consistent shareholder returns and financial stability.The divi...
Executive/Board ChangesShareholder Meetings
California Water Service Shareholders Back Board, Pay, Auditor
Positive
May 21, 2026
At its Annual Meeting of Stockholders held on May 20, 2026, California Water Service Group shareholders elected all 11 director nominees to serve until the 2027 annual meeting, signaling continued support for the company’s current board comp...
Business Operations and StrategyExecutive/Board Changes
California Water Service Announces Key Leadership Promotions
Positive
May 20, 2026
On May 20, 2026, California Water Service Group’s board approved the promotion of longtime employee Tamara S. Johnson to the newly created role of Vice President, California Operations, effective July 1, 2026. Johnson, who has four decades o...
Business Operations and StrategyRegulatory Filings and Compliance
California Water Service Wins CPUC Rate Case Approval
Positive
May 1, 2026
California Water Service, the largest subsidiary of California Water Service Group, received a final decision on April 30, 2026 from the California Public Utilities Commission on its 2024 General Rate Case and Infrastructure Improvement Plan, conc...
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.