Start here if you're new
what it is
H2O America runs regulated water systems, so you pay the bill every month and the company asks regulators for rate increases.
how it gets paid
Last year O America made $806M in revenue. California water service was the main engine at $482M, or 60% of sales.
why it's growing
Revenue grew 9.4% last year. Results were driven largely by a combination of recent rate increases and higher customer usage.
what just happened
Revenue hit $606M in the latest quarter, but consensus data shows EPS of $0.46 missed a $0.76 estimate.
At a glance
B+ balance sheet — decent shape, but not bulletproof
55/100 earnings predictability — expect surprises
15.3x trailing p/e — the market's not buying it — or you found a deal
3.0% dividend yield — cash in your pocket every quarter
4.5% return on capital — nothing to write home about
xvary composite: 56/100 — below average
What they do
H2O America runs regulated water systems, so you pay the bill every month and the company asks regulators for rate increases.
Regulated utility → government-approved local monopoly → so your customers usually cannot switch. H2O America serves about 388,000 connections across California, Texas, and Connecticut, and you do not casually replace the pipes under your street. That is why a business with a 22.0% operating margin can still grow sales 5.5% a year on management's outlook.
How they make money
$806M
annual revenue · their business grew +9.4% last year
California water service
$482M
+9.4%
Connecticut water service
$291M
+9.4%
Texas water service
$33M
+9.4%
Other utility services
$0M
0.0%
The products that matter
regulated water delivery
Water Utility Operations
$806M revenue · entire business
it's the whole company: $806M in annual revenue, up 9.4% last year. if this business grows, the stock has a story. if it stalls, there is nowhere else to hide.
100% of revenue
Key numbers
$1.8B
long-term debt
That debt equals about 90% of HTO's roughly $2 billion market cap, so balance-sheet risk is part of your equity story.
15.3x
trailing p/e
You are paying a utility multiple for a company growing sales 5.5% a year, which is fair but not cheap.
22.0%
operating margin
Operating margin → profit after running the utility, before interest and taxes → so HTO has room to earn, but debt still matters.
3.0%
dividend yield
That is your cash return while you wait, but it loses charm fast if cash flow stays weaker than revenue growth.
Financial health
B+
strength
- balance sheet grade B+ — solid but not elite
- risk rank 3 — safer than 50% of stocks
- price stability 85 / 100
- long-term debt $1.8B (49% of capital)
- return on equity 6% — $0.06 profit for every $1 investors have put in
B+ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in HTO 3 years ago → it's now worth $6,770.
The index would have given you $13,920.
source: institutional data · total return
What just happened
missed estimates
Revenue hit $606M in the latest quarter, but consensus data shows EPS of $0.46 missed a $0.76 estimate.
The hard part is the data split. EDGAR shows a latest quarter with $606 million of revenue and $2.48 of EPS, while Yahoo consensus shows the most recent earnings print at $0.46 versus a $0.76 estimate, a 39.47% miss. The clean read is simple: reported revenue is growing faster than investor confidence.
$606M
revenue
$0.46
eps actual
39.5%
vs estimate
the number that mattered
The number that mattered was the 39.47% EPS miss, because utilities rarely get much valuation forgiveness when earnings come in light.
-
the domestic regulated water utility posted revenues of $241 million and profits of $1.28 per share for the september period, reflecting annual advances of 7% and 9%, respectively.results were driven largely by a combination of recent rate increases and higher customer usage, more than offsetting headwinds from regulatory adjustments. for the full-year 2025, h2o america probably registered moderate vs. prior year top- and bottom-line gains.
-
a new chairman of the board is set for february.
-
current chief executive officer andrew walters will assume the role of chairman following eric thornburg’s decision to retire as non-executive chair of the board of directors.
-
mr.
-
thornburg had a lengthy tenure as president, ceo, and chair with the company.
source: EDGAR and Yahoo Finance consensus, 2026
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What could go wrong
the top threat is rate-case and regulatory execution. recent gains were helped by rate increases, so this is a utility where the regulator matters almost as much as management.
med
rate increases stop carrying the story
The latest quarter was helped by recent rate increases and higher customer usage. If those tailwinds cool, revenue growth can look a lot more ordinary very quickly.
This matters because the current $806M revenue base only grows to an estimated $845M next year. There is not much room for missed execution.
med
$1.8B of debt limits flexibility
Long-term debt equals 49% of capital. That's manageable for a utility, but it also means capital spending, refinancing conditions, and allowed returns matter a lot.
When return on equity is 7%, leverage has to stay productive. If debt rises faster than earnings, the balance sheet stops feeling defensive.
med
leadership transition adds execution risk
Andrew Walters is set to become chairman in february after Eric Thornburg's retirement. The move may be smooth. The page just doesn't give you enough evidence to assume that for free.
For a company with only 4.0% return on capital, even small execution slips can pressure investor confidence faster than the word “utility” would suggest.
Slower rate approvals or weaker usage would pressure a business that just reached $806M in revenue, and the $1.8B debt load means HTO does not have endless room to absorb mistakes.
source: institutional data · regulatory filings · risk analysis
Pay attention to
risk
whether rate-driven growth holds up
The latest quarter leaned on rate increases and higher usage. If those supports fade, the modest growth case gets thinner fast.
metric
fy2026 eps estimate of $3.45
That is the market's current growth marker versus FY2025 EPS of $3.25. If estimates slip back toward the old number, the valuation argument weakens.
calendar
the february chairman transition
Leadership changes are usually quiet at utilities. You still want confirmation that capital allocation and regulatory execution stay on script.
trend
debt versus returns
$1.8B of long-term debt and 4.0% return on capital is the spread to watch. If leverage rises without better returns, the defensive case gets weaker.
Analyst rankings
short-term outlook
average
momentum score 3 — in human-speak, analysts think the stock is behaving like the market, not breaking away from it.
risk profile
average
stability score 3 — this is not a bunker stock, but it is also not the kind of chart that forgets what gravity is.
chart momentum
below average
technical score 4 — the tape is not helping you right now, which fits the weak three-year total return.
earnings predictability
55 / 100
Results are somewhat predictable, not beautifully predictable. For a utility, that is more shrug than flex.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 154 buyers vs. 117 sellers in 3q2025. total institutional holdings: 29.4M shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$41
$69
$50
current price
$55
target midpoint · +10% from current · 3-5yr high: $105 (+110% · 22% ann'l return)
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