American States Water (AWR) just released its fourth quarter and full year 2025 results, with revenue and net income for both periods above the prior year. This puts the stock’s recent performance into sharper focus for investors.
See our latest analysis for American States Water.
The earnings release seems to have aligned with recent buying interest, with a 1-day share price return of 2.14% and a year to date share price return of 5.72% at US$76.39. Over a longer horizon, the 5 year total shareholder return of 17.47% contrasts with a 3 year total shareholder return of a 4.21% decline, suggesting momentum has picked up more recently than in the middle of that period.
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So with earnings growing, a 1 year total return of 1.05% and a 5 year total return of 17.47% at around US$76 per share, is American States Water offering value today, or is the market already pricing in future growth?
Most Popular Narrative: 6.1% Overvalued
At $76.39, American States Water trades above the most followed fair value estimate of $72, which is based on a discounted cash flow approach using a 6.96% discount rate.
Analysts have trimmed their price target for American States Water to US$72.00 from US$81.50, citing updated assumptions for slightly higher discount rates, more moderate revenue growth, firmer profit margins, and a lower future P/E multiple of 22.23 versus 25.61 previously.
Curious what sits behind that lower fair value while margins are expected to firm up. The narrative leans on moderated growth, richer profitability and a reset valuation multiple. It is useful to see how those moving parts fit together in the model and where the discount rate has the greatest impact.
Result: Fair Value of $72 (OVERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, this narrative could be knocked off course if California specific regulatory decisions tighten cost recovery or if rising supply and wildfire mitigation costs pressure margins more than expected.
Find out about the key risks to this American States Water narrative.
Next Steps
With mixed signals on value and a fair bit of debate in the numbers, it makes sense to move quickly, review the underlying data yourself, and weigh up 2 key rewards and 2 important warning signs before you decide what this story means for you.
Looking for more investment ideas?
If this update has sharpened your thinking on American States Water, do not stop here, widen your search so you are not missing stronger opportunities.
- Target stability first by reviewing companies in our 75 resilient stocks with low risk scores that may help anchor the more volatile parts of your portfolio.
- Hunt for sensible prices with our 49 high quality undervalued stocks, where you can spot stocks that our filters flag as offering quality at a discount.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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