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H2O America
(NASDAQ:HTO)
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Rating:60Neutral
Price Target:
$61.00
â–¼(-3.33% Downside)
Action:Reiterated
Date:10/27/26
The score is anchored by generally solid financial results (steady growth and stable net profitability) but held back by persistently negative free cash flow and TTM leverage-data inconsistency risk. Earnings-call commentary is constructive with reaffirmed growth targets and a large, largely recoverable capex plan, though dilution and cost pressures temper upside. Technicals are mixed-to-soft, and valuation appears reasonable with supportive dividend yield.
Positive Factors
Revenue and Profitability
Steady revenue expansion alongside resilient net margins indicates an established regulated utility base with continuing demand. This combination supports recurring earnings, provides resources for infrastructure investment, and suggests the business can sustain growth beyond a single reporting period.
Negative Factors
Negative Free Cash Flow
Persistent negative free cash flow shows that the company's substantial reinvestment needs currently exceed operating cash generation. Although the gap improved from 2025, continued external funding or balance-sheet support may be required to sustain the investment program.
Read all positive and negative factors
Positive Factors
Negative Factors
Revenue and Profitability
Steady revenue expansion alongside resilient net margins indicates an established regulated utility base with continuing demand. This combination supports recurring earnings, provides resources for infrastructure investment, and suggests the business can sustain growth beyond a single reporting period.
Read all positive factors
H2O America (HTO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.99B
Dividend Yield2.82%
Average Volume (3M)521.55K
Price to Earnings (P/E)23.6
Beta (1Y)-0.03
Revenue Growth4.22%
EPS Growth-17.13%
CountryUS
Employees837
SectorUtilities
Sector Strength65
IndustryRegulated Water
Share Statistics
EPS (TTM)2.62
Shares Outstanding48,318,993
10 Day Avg. Volume550,157
30 Day Avg. Volume521,553
Financial Highlights & Ratios
PEG Ratio3.60
Price to Book (P/B)1.14
Price to Sales (P/S)2.20
P/FCF Ratio-6.32
Enterprise Value/Market Cap1.41
Enterprise Value/Revenue5.01
Enterprise Value/Gross Profit8.73
Enterprise Value/Ebitda13.06
Forecast
1Y Price Target
$63.25Price Target Upside0.24% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)2.83
Revenue Forecast (FY)$861.36M
H2O America Business Overview & Revenue Model
Company Description
H2O America, operating nationwide via its various subsidiaries, is a key provider of essential water utility and associated services. The company manages the entire water lifecycle, from procuring, storing, and purifying water to its distribution,...
H2O America Earnings Call Summary
Earnings Call Date:Oct 26, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Feb 18, 2027
Earnings Call Sentiment Positive
The call was broadly constructive and growth-oriented. Management reported results consistent with expectations, reaffirmed long-term growth targets, closed Quadvest, highlighted strong Texas customer growth, advanced multiple rate cases, and maintained its long-term capital plan and liquidity. These positives were offset by year-over-year adjusted EPS declines, higher operating and water supply costs, equity-related dilution, acquisition-related 2026 and expected 2027 dilution, a Texas revenue reduction, and regulatory and housing-market risks. Highlights significantly outweighed the lowlights.Positive Updates
Quarterly and Year-to-Date GAAP Earnings
H2O America reported third-quarter 2026 diluted EPS of $0.99 and year-to-date diluted EPS of $2.13. Management said the results were consistent with internal expectations and supportive of 2026 guidance and long-term financial growth targets.
Negative Updates
Adjusted EPS Declined Year Over Year
Third-quarter 2026 adjusted diluted EPS was $1.04, compared with $1.27 in the third quarter of 2025. Year-to-date adjusted diluted EPS was $2.30, compared with $2.53 in the same period of 2025.
Read all updates
Q3-2026 Updates
Positive
Negative
Quarterly and Year-to-Date GAAP Earnings
H2O America reported third-quarter 2026 diluted EPS of $0.99 and year-to-date diluted EPS of $2.13. Management said the results were consistent with internal expectations and supportive of 2026 guidance and long-term financial growth targets.
Read all positive updates
Company Guidance
H2O America narrowed standalone 2026 adjusted diluted EPS guidance to $3.10-$3.16 per share, preserving the $3.13 per share midpoint, and provided 2026 adjusted diluted EPS guidance including Texas acquisitions and financings of $2.91-$2.97, or roughly 6% dilution from the midpoint of standalone guidance versus the previously communicated 10%-20% range of expectation; 2027 dilution could be in the 10%-20% range compared to the standalone plan. The company reiterated its long-term EPS CAGR target of 6%-8%, expects a nonlinear EPS CAGR over the 2026 to 2030 period at or above the top end of its 6%-8% long-term organic EPS growth target, and expects the $2.7 billion 2026 to 2030 capital investment budget and Quadvest to drive a 13% rate base CAGR off its year-end 2025 estimated rate base of $2.8 billion; full year 2026 company-funded capital investment is approximately $465 million, down from $483 million, with $766 million of total planned Texas CapEx over the 2026 to 2030 period.H2O America Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
70
Positive
Cash Flow
38
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 838.18M | 800.59M | 748.44M | 670.36M | 620.70M | 573.69M |
| Gross Profit | 480.44M | 374.11M | 425.12M | 388.43M | 357.17M | 318.57M |
| EBITDA | 321.25M | 326.49M | 289.38M | 265.23M | 246.82M | 219.66M |
| Net Income | 104.87M | 102.58M | 93.97M | 84.99M | 73.83M | 60.48M |
Balance Sheet | ||||||
| Total Assets | 6.05B | 5.15B | 4.66B | 4.35B | 3.76B | 3.49B |
| Cash, Cash Equivalents and Short-Term Investments | 572.96M | 20.69M | 11.11M | 9.72M | 12.34M | 10.91M |
| Total Debt | 2.09B | 1.98B | 1.83B | 1.75B | 1.66B | 1.60B |
| Total Liabilities | 3.85B | 3.61B | 3.29B | 3.11B | 2.64B | 2.46B |
| Stockholders Equity | 2.20B | 1.54B | 1.37B | 1.23B | 1.11B | 1.03B |
Cash Flow | ||||||
| Free Cash Flow | -400.99M | -278.10M | -185.11M | -99.89M | -78.04M | -123.77M |
| Operating Cash Flow | 248.21M | 244.80M | 195.53M | 190.83M | 166.20M | 130.04M |
| Investing Cash Flow | -496.57M | -520.10M | -340.10M | -322.27M | -244.33M | -260.00M |
| Financing Cash Flow | 810.00M | 284.87M | 145.96M | 128.82M | 78.35M | 132.81M |
H2O America Technical Analysis
Positive
63.10
Price Trends
61.30
Negative
61.01
Positive
58.23
Positive
Market Momentum
-0.71
Negative
58.33
Neutral
91.23
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HTO, the sentiment is Positive. The current price of 63.1 is above the 20-day moving average (MA) of 58.43, above the 50-day MA of 61.30, and above the 200-day MA of 58.23, indicating a neutral trend. The MACD of -0.71 indicates Negative momentum. The RSI at 58.33 is Neutral, neither overbought nor oversold. The STOCH value of 91.23 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HTO.
H2O America Risk Analysis
H2O America disclosed 42 risk factors in its most recent earnings report. H2O America reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
H2O America Peers Comparison
UnderperformOutperform
Sector (66)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $349.15M | 14.69 | 9.37% | 3.75% | 5.90% | 5.30% | |
67 Neutral | $3.35B | 23.07 | 13.50% | 2.44% | 13.23% | 12.00% | |
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
65 Neutral | $1.04B | 21.22 | 9.57% | 2.60% | 5.26% | 7.26% | |
64 Neutral | $2.92B | 21.17 | 7.62% | 2.77% | 6.43% | -2.99% | |
60 Neutral | $2.99B | 23.59 | 5.65% | 2.85% | 4.22% | -17.13% | |
54 Neutral | $507.31M | 19.42 | 9.38% | 2.92% | 9.43% | 16.86% |
* Utilities Sector Average
HTO
H2O America
61.80
16.68
36.96%
AWR
American States Water
84.44
13.69
19.35%
ARTNA
Artesian Resources
33.79
2.54
8.12%
CWT
California Water Service
47.15
1.03
2.23%
MSEX
Middlesex Water Company
55.38
-1.11
-1.97%
YORW
The York Water Company
31.26
1.24
4.13%
H2O America Corporate Events
Business Operations and StrategyM&A Transactions
H2O America Expands Texas Presence with Quadvest Acquisition
Positive
Oct 1, 2026
On October 1, 2026, H2O America’s Texas subsidiary, The Texas Water Company, and affiliate Texas Water Operation Services completed the acquisition of all assets owned by Quadvest in the high-growth Houston region. The deal more than doubles...
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.