📊 CWT Key Takeaways
Is California Water Service Group (CWT) a Good Investment?
CWT exhibits deteriorating financial health despite 6.4% revenue growth, with net income essentially flat (+0.3% YoY) and EPS declining 33.8% YoY, indicating severe margin compression and operational challenges. Critical liquidity and debt-service concerns are evidenced by a current ratio of 0.69x (below 1.0) and dangerously tight interest coverage of only 1.1x, creating financial stress risk in a capital-intensive utility.
California Water Service Group shows solid core utility fundamentals, with stable profitability, healthy operating cash generation, and manageable leverage supported by strong interest coverage. However, growth quality is mixed: revenue rose 6.4% but net income was flat and diluted EPS fell sharply, while sub-1.0x liquidity and incomplete capital spending data limit conviction.
Why Buy California Water Service Group Stock? CWT Key Strengths
- Revenue growing 6.4% YoY demonstrates market demand and rate recovery in water utility operations
- Free cash flow margin of 25% indicates strong cash generation relative to revenue despite low net profitability
- Debt-to-equity ratio of 0.87x is moderate and manageable within typical utility leverage ranges
- Stable regulated utility profitability with 17.7% operating margin and 13.3% net margin
- Strong operating cash flow generation of $302.56M with solid cash conversion relative to earnings
- Manageable balance sheet leverage with 0.87x debt-to-equity and 10.8x interest coverage
CWT Stock Risks: California Water Service Group Investment Risks
- Current ratio of 0.69x indicates acute liquidity stress with current liabilities exceeding current assets by 45%
- Interest coverage of 1.1x is critically low with minimal cushion to service $1.5B long-term debt; any operational deterioration creates default risk
- Extreme profitability deterioration: net income growth of only 0.3% despite 6.4% revenue growth and 33.8% EPS decline signals negative operating leverage and/or rising financing costs
- ROE of 0.2% and ROA of 0.1% reflect negligible returns on $5.8B asset base and $1.7B equity, indicating severe capital inefficiency
- Net margin of 2.0% is unsustainably low even for utilities, suggesting rate-base or cost structure problems
- Earnings quality appears pressured as revenue growth did not translate into net income growth and diluted EPS declined 33.8%
- Weak near-term liquidity with current and quick ratios both at 0.85x
- Cash flow durability is unclear because capital expenditure data is unavailable and water utilities typically require heavy ongoing infrastructure investment
Key Metrics to Watch
- Current ratio trend and cash management—liquidity must improve above 1.0x to reduce solvency risk
- Interest coverage ratio and debt-service cash flows—must exceed 1.5x to ensure sustainable debt service
- Net income and EPS growth relative to revenue growth—negative operating leverage must reverse to validate operational viability
- Diluted EPS trend versus revenue growth
- Capital expenditure needs and true free cash flow after infrastructure spending
California Water Service Group (CWT) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The 25.0% free cash flow margin provides substantial flexibility for dividends, buybacks, and strategic investments. The current ratio below 1.0x warrants monitoring of short-term liquidity.
CWT Profit Margin, ROE & Profitability Analysis
CWT vs Utilities Sector: How California Water Service Group Compares
How California Water Service Group compares to Utilities sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is California Water Service Group Stock Overvalued? CWT Valuation Analysis 2026
Based on fundamental analysis, California Water Service Group has mixed fundamental signals relative to the Utilities sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
California Water Service Group Balance Sheet: CWT Debt, Cash & Liquidity
CWT Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: California Water Service Group's revenue has grown significantly by 26% over the 5-year period, indicating strong business expansion. The most recent EPS of $0.91 reflects profitable operations.
CWT Revenue Growth, EPS Growth & YoY Performance
CWT Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $182.7M | $4.0M | $0.07 |
| Q3 2025 | $306.2M | $60.7M | $1.03 |
| Q2 2025 | $226.7M | $40.6M | $0.70 |
| Q1 2025 | $154.9M | $13.3M | $0.22 |
| Q3 2024 | $253.3M | $21.8M | $0.38 |
| Q2 2024 | $194.2M | $9.6M | $0.17 |
| Q1 2024 | $145.2M | -$22.2M | $-0.40 |
| Q3 2023 | $238.3M | $21.8M | $0.38 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
California Water Service Group Dividends, Buybacks & Capital Allocation
CWT SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for California Water Service Group (CIK: 0001035201)
📋 Recent SEC Filings
❓ Frequently Asked Questions about CWT
What is the AI rating for CWT?
California Water Service Group (CWT) has a Combined AI Rating of SELL from Claude (SELL) and ChatGPT (HOLD) with 73% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are CWT's key strengths?
Claude: Revenue growing 6.4% YoY demonstrates market demand and rate recovery in water utility operations. Free cash flow margin of 25% indicates strong cash generation relative to revenue despite low net profitability. ChatGPT: Stable regulated utility profitability with 17.7% operating margin and 13.3% net margin. Strong operating cash flow generation of $302.56M with solid cash conversion relative to earnings.
What are the risks of investing in CWT?
Claude: Current ratio of 0.69x indicates acute liquidity stress with current liabilities exceeding current assets by 45%. Interest coverage of 1.1x is critically low with minimal cushion to service $1.5B long-term debt; any operational deterioration creates default risk. ChatGPT: Earnings quality appears pressured as revenue growth did not translate into net income growth and diluted EPS declined 33.8%. Weak near-term liquidity with current and quick ratios both at 0.85x.
What is CWT's revenue and growth?
California Water Service Group reported revenue of $197.3M.
Does CWT pay dividends?
California Water Service Group pays dividends, with $20.0M distributed to shareholders in the trailing twelve months.
Where can I find CWT SEC filings?
Official SEC filings for California Water Service Group (CIK: 0001035201) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is CWT's EPS?
California Water Service Group has a diluted EPS of $0.07.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is CWT a good stock to buy right now?
Based on our AI fundamental analysis in May 2026, California Water Service Group has a SELL rating with 73% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is CWT stock overvalued or undervalued?
Valuation metrics for CWT: ROE of 0.2% (sector avg: 10%), net margin of 2.0% (sector avg: 12%). Compare these metrics with sector averages to assess valuation.
Should I buy CWT stock in 2026?
Our dual AI analysis gives California Water Service Group a combined SELL rating for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is CWT's free cash flow?
California Water Service Group's operating cash flow is $49.4M, with capital expenditures of N/A. FCF margin is 25.0%.
How does CWT compare to other Utilities stocks?
Vs Utilities sector averages: Net margin 2.0% (avg: 12%), ROE 0.2% (avg: 10%), current ratio 0.69 (avg: 0.8).