California Water Service Group (CWT)
Valuation Overview•Is California Water Service Group Overvalued or Undervalued?
Trading at a discount across both intrinsic cash flow and relative peer multiples, indicating a strong margin of safety.
Moderate quality score of 47/100, reflecting stable operating margins and manageable leverage.
Wall Street forecasts a balanced outlook with consensus price targets near the current price.
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Verdict: Average quality business weighed down by significant solvency concerns.
Wall Street sentiment is generally neutral alongside robust expected earnings growth. This is paired with healthy capital returns, anchored by a strong, well-covered dividend yield.
CWT demonstrates adequate business quality with stable profitability. However, this is severely offset by a highly leveraged balance sheet (Debt/EBITDA > 4.0x) and elevated financial risk.
The company demonstrates solid revenue growth (5.7% 3Y CAGR) paired with stable bottom-line earnings. The company maintains healthy operational efficiency with a 20.4% operating margin.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $332.2M | -3.5% | +5.7% | +4.7% | +5.4% | |
| EBITDA | $135.8M | — | +10.4% | — | — | |
| Net Income | $65.4M | -32.8% | +10.1% | — | +11.0% | |
| EPS (Diluted) | $1.05 | -33.8% | +6.7% | +1.8% | +8.6% | |
| Free Cash Flow | $921K | -19.2% | -36.7% | -3.5% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 64.9% | 68.5% | 65.9% | 60.7% |
| Operating Margin | 20.4% | 16.6% | 16.2% | 15.4% |
| Net Margin | 12.8% | 12.6% | 12.4% | 11.0% |
| FCF Margin | -24.8% | -19.9% | -15.5% | -15.6% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q4'26Latest | $1.16 | $1.05 | -9.5% | ||
| Q3'26 | $0.80 | $0.93 | +16.3% | ||
| Q2'26 | $0.25 | $0.07 | -72.0% | ||
| Q1'26 | $0.36 | $0.19 | -47.2% | ||
| Q4'25 | $1.20 | $1.03 | -14.2% | ||
| Q3'25 | $0.46 | $0.71 | +54.3% | ||
| Q2'25 | $0.16 | $0.22 | +37.5% | ||
| Q1'25 | $0.38 | $0.33 | -13.2% |
Total return is +12.9% (1Y), outperforming the benchmark by +3.2%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +21.2% | +13.5% | — |
| 1Y | +12.9% | +3.2% | +2.8% |
| 3YCAGR | +1.8% | -17.4% | +6.5% |
| 5YCAGR | -2.2% | -11.6% | +8.6% |
| 10YCAGR | +7.0% | -6.2% | — |
The S&P 500 is at 29.9x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about California Water Service Group (CWT) valuation, health, and returns.
California Water Service Group is estimated to be undervalued under our discounted cash flow framework. relative multiples indicate the stock is Slightly cheap versus peers compared to industry peers. undervalued (implying +87.4% upside to DCF intrinsic value of $95.65)
California Water Service Group has multiple valuation anchors: DCF Intrinsic Value: $95.65 | Peer Relative Fair Value: $59.27 | Wall Street Analyst Target: $53.00 (implying +3.8% upside). A convergence of these signals offers higher conviction.
California Water Service Group displays fair financial health with a composite quality score of 47/100, supported by a Piotroski F-Score of 4/9, Return on Invested Capital (ROIC) of 4.4%.
California Water Service Group pays a 2.4% dividend yield, covered by a 58% payout ratio with 27 years of growth, supplemented by a 0.0% buyback yield.
California Water Service Group's current growth trajectory is Decelerating. The company achieved -3.5% 1Y revenue growth and -33.8% 1Y EPS growth, compared to its 3Y revenue CAGR of +5.7%.
Wall Street consensus is Buy based on 11 analysts, beating EPS expectations in 42% of recent quarters with a -1-quarter streak. The consensus price target represents a +3.8% change from current levels.
Investment risks for California Water Service Group include: -14.1% 1-year max drawdown. Volatility risk is characterized by a beta of -0.29x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.