Pure Cycle (PCYO) AI Stock Analysis

• Market Cap: $241.24M
• Dividend Yield: N/A
• Average Volume (3M): 37.38K
• Price to Earnings (P/E): 17.2
• Beta (1Y): 0.76
• Revenue Growth: 58.77%
• EPS Growth: 116.91%
• Country: US
• Employees: 39
• Sector: Utilities
• Sector Strength: 76
• Industry: Regulated Water
• EPS (TTM): 0.03
• Shares Outstanding: 24,076,305
• 10 Day Avg. Volume: 32,409
• 30 Day Avg. Volume: 37,385
• PEG Ratio: -1.12
• Price to Book (P/B): 2.23
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -26.02
• Enterprise Value/Market Cap: 0.90
• Enterprise Value/Revenue: 2.02
• Enterprise Value/Gross Profit: 11.00
• Enterprise Value/Ebitda: 3.05
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

• Rating: 77 Outperform
• Price Target: $11.50 ▲(13.86%Upside)

Pure Cycle's overall stock score reflects strong financial performance and a positive earnings outlook, supported by solid revenue growth and strategic initiatives. The technical analysis suggests some caution due to bearish trends, while valuation metrics indicate a fair market price. The earnings call provided further confidence in the company's strategic direction and financial health.

Pure Cycle Business Overview & Revenue Model

Company Description

Pure Cycle Corporation designs, constructs, operates, and maintains water and wastewater systems in the Denver metropolitan area and Colorado Front Range in the United States. It operates in two segments, Wholesale Water and Wastewater Services, and Land Development. The company engages in the wholesale water production, storage, treatment, and distribution systems; wastewater collection and treatment systems; development of master-planned community; and oil and gas leasing business. It serves domestic, commercial, and industrial customers in the Denver metropolitan region. Pure Cycle Corporation was founded in 1976 and is based in Watkins, Colorado.

How the Company Makes Money

Pure Cycle Corporation generates revenue through multiple streams, primarily focusing on water and wastewater services and real estate development. The company earns money by providing water and wastewater services to municipal, commercial, and industrial customers. This includes water delivery, wastewater treatment, and infrastructure management. Revenue is also derived from its real estate development activities, where the company develops and sells residential and commercial land plots, leveraging its extensive land holdings. Additionally, Pure Cycle may form strategic partnerships or joint ventures to enhance its service offerings and expand its market reach, contributing to its overall earnings. The integration of water resource management with real estate development allows Pure Cycle to capitalize on the growing demand for sustainable infrastructure solutions in water-scarce regions.

Pure Cycle Financial Statement Overview

Summary

Pure Cycle exhibits strong financial performance, marked by consistent revenue growth, robust profit margins, and efficient cash conversion. The company maintains a solid balance sheet with low leverage and a healthy net profit margin. However, the moderate return on equity indicates room for improvement in shareholder returns.

Income Statement

Pure Cycle demonstrates strong financial performance with consistent revenue growth, notably a 3.9% increase in TTM revenue compared to the previous year, and a substantial gross profit margin of 65.8% in the TTM period. The company also maintains healthy profitability with a net profit margin of 51.1% and an EBIT margin of 37.6%. These metrics indicate robust operational efficiency and profitability.

Balance Sheet

The balance sheet reflects a solid financial position with a low debt-to-equity ratio of 0.0023, suggesting minimal reliance on debt financing. The equity ratio stands at 89.8%, indicating strong equity financing. However, the return on equity is moderate at 11.4%, suggesting room for improvement in generating returns from shareholders' equity.

Cash Flow

Cash flow analysis reveals positive developments with a significant turnaround in free cash flow, growing from a negative position to $6.49 million in the TTM period. The operating cash flow to net income ratio is favorable at 0.53, showing efficient cash conversion. Additionally, free cash flow to net income ratio of 0.43 indicates strong cash generation relative to net income.

Breakdown
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
29.91M	28.75M	14.59M	23.00M	17.13M	25.86M
	Gross Profit
19.68M	19.76M	8.04M	16.37M	10.72M	7.54M
	EBIT
11.25M	12.24M	2.07M	10.10M	5.27M	4.36M
	EBITDA
21.62M	18.17M	8.58M	14.92M	28.36M	10.64M
	Net Income Common Stockholders
14.18M	11.61M	4.70M	9.62M	20.11M	6.75M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
16.80M	22.11M	26.01M	34.89M	20.12M	21.80M
	Total Assets
149.66M	147.35M	133.22M	129.23M	117.18M	89.76M
	Total Debt
7.01M	7.04M	7.28M	4.10M	121.00K	120.28K
	Net Debt
-9.79M	-15.07M	-18.74M	-30.80M	-20.00M	-21.68M
	Total Liabilities
15.24M	17.65M	14.98M	16.23M	14.44M	7.72M
	Stockholders Equity
134.41M	129.70M	118.23M	113.00M	102.74M	82.04M
Cash Flow		Free Cash Flow
6.55M	-461.00K	-10.15M	11.63M	560.00K	12.09M
	Operating Cash Flow
8.12M	2.21M	-2.34M	17.45M	3.46M	20.72M
	Investing Cash Flow
-8.66M	-4.73M	-9.24M	-6.67M	-2.90M	-3.45M
	Financing Cash Flow
-617.00K	-612.00K	2.85M	3.99M	87.00K	44.78K

Pure Cycle Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 10.10
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 10.1 is below the 20-day moving average (MA) of 10.45, below the 50-day MA of 10.35, and below the 200-day MA of 11.26, indicating a bearish trend. The MACD of -0.07 indicates Positive momentum. The RSI at 42.61 is Neutral, neither overbought nor oversold. The STOCH value of 13.21 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PCYO.

Pure Cycle Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PCYO	77 Outperform	$241.24M	17.18	11.12%	―	58.77%	116.91%
CWCO	72 Outperform	$454.74M	17.21	7.83%	1.54%	-31.57%	-18.12%
ARTNA	70 Outperform	$346.28M	16.13	9.04%	3.67%	8.31%	21.97%
GWRS	66 Neutral	$284.39M	44.27	9.11%	2.93%	3.94%	-8.78%
Sector *	64 Neutral	$8.51B	10.30	4.25%	5.64%	4.06%	-12.76%
YORW	58 Neutral	$461.10M	23.41	8.63%	2.74%	3.45%	-19.90%
CDZI	47 Neutral	$245.63M	―	-84.03%	―	283.67%	-11.36%

Pure Cycle Corporate Events

Pure Cycle Reports Positive Q2 2025 Financial Results

On April 9, 2025, Pure Cycle Corporation announced its financial results for the three and six months ended February 28, 2025, marking its twenty-third consecutive quarter of positive net income. The company continues to progress in the development of the Sky Ranch community, with significant advancements in various phases of construction and an increase in royalty revenues from its oil and gas interests. Despite seasonal slowdowns, Pure Cycle reported revenues of $4.0 million and $9.7 million for the quarter and year-to-date, respectively, and maintained a strong balance sheet with $16.8 million in cash and equivalents. The company’s strategic focus remains on growth and shareholder returns, with ongoing investments in development projects and a share repurchase program.