Companhia de Saneamento Básico do Estado de São Paulo - SABESP (SBS)
Valuation Overview•Is Companhia de Saneamento Básico do Estado de São Paulo - SABESP Overvalued or Undervalued?
Trading at a discount compared to peers, but the underlying intrinsic cash flows struggle to support the current price.
Moderate quality score of 55/100, reflecting stable operating margins and manageable leverage.
Analysts remain bullish, forecasting further upside expansion with consensus targets suggesting solid gains.
Verdict: Average quality business weighed down by significant solvency concerns.
Wall Street is highly bullish, projecting significant upside. This is paired with healthy capital returns, anchored by a strong, well-covered dividend yield.
SBS demonstrates adequate business quality with stable profitability. This is paired with a moderately leveraged but stable balance sheet.
The company is driving exceptional top-line expansion (19.2% 3Y CAGR) paired with highly explosive earnings growth (38.5% EPS 3Y CAGR). This growth is supported by elite operational efficiency, sustaining an impressive 32.4% operating margin.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $9.8B | +3.3% | +19.2% | +16.0% | +12.3% | |
| EBITDA | $4.0B | — | +26.0% | — | — | |
| Net Income | $1.7B | -13.4% | +38.5% | — | +31.5% | |
| EPS (Diluted) | $0.49 | -13.6% | +38.5% | +53.9% | +31.2% | |
| Free Cash Flow | -$12.5B | -180.0% | — | -32.1% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 36.1% | 42.6% | 39.4% | 39.7% |
| Operating Margin | 32.4% | 33.3% | 28.4% | 28.3% |
| Net Margin | 22.0% | 20.8% | 17.7% | 16.8% |
| FCF Margin | -31.9% | -8.9% | -3.0% | 0.5% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $0.08 | $0.09 | +9.1% | ||
| Q1'26 | $0.09 | $0.10 | +12.3% | ||
| Q4'25 | $0.29 | $0.33 | +14.8% | ||
| Q3'25 | $0.29 | $0.50 | +73.7% | ||
| Q2'25 | $0.30 | $0.36 | +21.3% | ||
| Q1'25 | $0.06 | $0.48 | +731.5% | ||
| Q4'24 | $0.70 | $1.56 | +122.2% | ||
| Q3'24 | $0.25 | $0.33 | +32.0% |
Total return is +27.6% (1Y), outperforming the benchmark by +2.6%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +8.5% | -0.8% | — |
| 1Y | +27.6% | +2.6% | +3.2% |
| 3YCAGR | +34.0% | +15.4% | +13.6% |
| 5YCAGR | +30.2% | +17.9% | +26.8% |
| 10YCAGR | +15.2% | +1.7% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Companhia de Saneamento Básico do Estado de São Paulo - SABESP (SBS) valuation, health, and returns.
Companhia de Saneamento Básico do Estado de São Paulo - SABESP is estimated to be overvalued under our discounted cash flow framework. relative multiples indicate the stock is Cheap versus peers compared to industry peers. overvalued (implying -185.0% downside from DCF intrinsic value of $-4.46)
Companhia de Saneamento Básico do Estado de São Paulo - SABESP has multiple valuation anchors: DCF Intrinsic Value: $-4.46 | Peer Relative Fair Value: $45.30 | Wall Street Analyst Target: $23.79 (implying +353.1% upside). A convergence of these signals offers higher conviction.
Companhia de Saneamento Básico do Estado de São Paulo - SABESP displays fair financial health with a composite quality score of 55/100, supported by a Piotroski F-Score of 3/9, Return on Invested Capital (ROIC) of 13.1%.
Companhia de Saneamento Básico do Estado de São Paulo - SABESP pays a 2.4% dividend yield, covered by a 28% payout ratio with 0 years of growth, supplemented by a 0.5% buyback yield.
Companhia de Saneamento Básico do Estado de São Paulo - SABESP's current growth trajectory is Decelerating. The company achieved +3.3% 1Y revenue growth and -13.6% 1Y EPS growth, compared to its 3Y revenue CAGR of +19.2%.
Wall Street consensus is Hold based on 7 analysts, beating EPS expectations in 75% of recent quarters with a 8-quarter streak. The consensus price target represents a +353.1% change from current levels.
Investment risks for Companhia de Saneamento Básico do Estado de São Paulo - SABESP include: -80.2% 1-year max drawdown. Volatility risk is characterized by a beta of 0.82x.
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.