📊 PCYO Key Takeaways
Is Pure Cycle Corp. (PCYO) a Good Investment?
Pure Cycle Corp exhibits a critical disconnect between reported profitability and cash generation—negative operating cash flow (-$1.7M) despite $8.6M net income signals severe earnings quality concerns. Combined with 9.3% revenue decline and zero insider buying, the fundamentals suggest deteriorating business dynamics that the strong balance sheet cannot offset.
Pure Cycle has strong margins and a conservatively financed balance sheet, but the 9.3% revenue decline and negative operating cash flow indicate weak near-term growth quality and poor earnings-to-cash conversion. Fundamentals are stable enough to avoid a negative rating, yet improved revenue momentum and sustained positive free cash flow are needed for a more favorable assessment.
Pure Cycle Corp. Key Strengths (PCYO)
- Exceptional net margin of 38.3% and operating margin of 30.0%
- Strong balance sheet with minimal leverage (0.09x debt/equity) and $151.6M stockholders' equity
- Solid gross margin of 59.1% indicating pricing power and operational efficiency
- High gross, operating, and net margins of 59.1%, 30.0%, and 38.3%
- Low leverage, with debt-to-equity of 0.09x and liabilities equal to only 13.9% of assets
- Adequate liquidity, with current and quick ratios of 1.53x and 1.20x
PCYO Stock Risks: Pure Cycle Corp. Investment Risks
- Operating cash flow negative (-$1.7M) while net income positive ($8.6M)—major earnings quality red flag suggesting non-cash charges or aggressive revenue recognition
- Revenue contracted 9.3% YoY indicating business shrinkage in a typically stable water supply sector
- Free cash flow deeply negative (-$1.9M, -8.2% margin) raises questions about sustainability and dividend-paying capacity
- EPS growth (12.5%) driven by share count reduction, not operational performance improvements
- Critically low capital expenditure ($132K) for a water supply utility suggests either distress or data quality issues
- Revenue declined 9.3% year over year while net income was approximately flat
- Operating cash flow was negative $1.72M despite reported net income of $8.62M
- Modest ROE of 5.7% and ROA of 4.9% suggest limited returns on the company's substantial equity base
Key Metrics to Watch
- Operating cash flow trajectory and reconciliation of net income vs. cash earnings
- Revenue growth stabilization and customer retention trends
- Working capital changes explaining cash conversion deficit
- Operating cash flow and free cash flow conversion
- Revenue growth and operating margin
Pure Cycle Corp. (PCYO) Financial Metrics & Key Ratios
💡 AI Analyst Insight
Pure Cycle Corp. presents a mixed fundamental picture. Review the detailed metrics above to form your own investment thesis.
PCYO Profit Margin, ROE & Profitability Analysis
PCYO vs Utilities Sector: How Pure Cycle Corp. Compares
How Pure Cycle Corp. compares to Utilities sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Pure Cycle Corp. Stock Overvalued? PCYO Valuation Analysis 2026
Based on fundamental analysis, Pure Cycle Corp. appears fundamentally strong 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.
Pure Cycle Corp. Balance Sheet: PCYO Debt, Cash & Liquidity
PCYO Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Pure Cycle Corp.'s revenue has grown significantly by 11% over the 5-year period, indicating strong business expansion. The most recent EPS of $0.48 reflects profitable operations.
PCYO Revenue Growth, EPS Growth & YoY Performance
PCYO Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2026 | $5.1M | $2.3M | $0.09 |
| Q2 2026 | $4.0M | $809.0K | $0.03 |
| Q1 2026 | $5.8M | $3.9M | $0.16 |
| Q3 2025 | $5.1M | $2.3M | $0.09 |
| Q2 2025 | $3.2M | $118.0K | $0.00 |
| Q1 2025 | $5.4M | $2.1M | $0.09 |
| Q3 2024 | $6.9M | $2.8M | $0.12 |
| Q2 2024 | $3.0M | $118.0K | $0.00 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Pure Cycle Corp. Dividends, Buybacks & Capital Allocation
PCYO SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Pure Cycle Corp. (CIK: 0000276720)
📋 Recent SEC Filings
❓ Frequently Asked Questions about PCYO
What is the AI rating for PCYO?
Pure Cycle Corp. (PCYO) has a Combined AI Grade of C from Claude (C) and ChatGPT (B) with 75% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are PCYO's key strengths?
Claude: Exceptional net margin of 38.3% and operating margin of 30.0%. Strong balance sheet with minimal leverage (0.09x debt/equity) and $151.6M stockholders' equity. ChatGPT: High gross, operating, and net margins of 59.1%, 30.0%, and 38.3%. Low leverage, with debt-to-equity of 0.09x and liabilities equal to only 13.9% of assets.
What are the risks of investing in PCYO?
Claude: Operating cash flow negative (-$1.7M) while net income positive ($8.6M)—major earnings quality red flag suggesting non-cash charges or aggressive revenue recognition. Revenue contracted 9.3% YoY indicating business shrinkage in a typically stable water supply sector. ChatGPT: Revenue declined 9.3% year over year while net income was approximately flat. Operating cash flow was negative $1.72M despite reported net income of $8.62M.
What is PCYO's revenue and growth?
Pure Cycle Corp. reported revenue of $22.5M.
Does PCYO pay dividends?
Pure Cycle Corp. does not currently pay dividends.
Where can I find PCYO SEC filings?
Official SEC filings for Pure Cycle Corp. (CIK: 0000276720) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is PCYO's EPS?
Pure Cycle Corp. has a diluted EPS of $0.36.
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 grade reflects both perspectives for balanced insights.
What is PCYO's fundamental grade?
Based on our AI fundamental analysis in August 2026, Pure Cycle Corp. has a C grade with 75% confidence. Review the strengths and risks sections above for full context. This is not investment advice.
Is PCYO stock overvalued or undervalued?
Valuation metrics for PCYO: ROE of 5.7% (sector avg: 10%), net margin of 38.3% (sector avg: 12%). Compare these metrics with sector averages to assess valuation.
What is PCYO's AI grade for 2026?
Our dual AI analysis gives Pure Cycle Corp. a combined C grade for 2026. Revenue is data pending, with profitability above sector average. Always conduct your own research.
What is PCYO's free cash flow?
Pure Cycle Corp.'s operating cash flow is $-1.7M, with capital expenditures of $132.0K. FCF margin is -8.2%.
How does PCYO compare to other Utilities stocks?
Vs Utilities sector averages: Net margin 38.3% (avg: 12%), ROE 5.7% (avg: 10%), current ratio 1.53 (avg: 0.8).