York Water’s latest earnings snapshot
York Water (YORW) has just posted another quarter of steady utility earnings, with Q4 2025 revenue at US$19.5 million and basic EPS of US$0.36, supported by trailing 12 month revenue of US$77.5 million and EPS of US$1.39. Over recent quarters the company has seen revenue range between US$18.5 million and US$20.4 million, with quarterly EPS between US$0.25 and US$0.43. The trailing net profit margin sits at 25.9% compared with 27.1% a year earlier, which may be relevant for investors assessing how earnings growth forecasts line up with current profitability.
See our full analysis for York Water.With the latest figures on the table, the next step is to see how these margins and earnings trends align with the prevailing narratives around York Water’s growth potential and risk profile.
Curious how numbers become stories that shape markets? Explore Community Narratives
TTM earnings outpace revenue growth
- Over the last 12 months, York Water generated US$77.5 million in revenue and US$1.39 in EPS, while earnings growth over the past five years averaged about 5.3% a year compared with forecast revenue growth of roughly 4.9% a year.
- What stands out for a more bullish narrative is that earnings are forecast to grow around 9.6% a year even though revenue growth is guided at about 4.9%. This means:
- The trailing net profit margin of 25.9% versus 27.1% a year earlier gives bulls solid profitability to point to, but also shows that future growth expectations rest on more than just margin stability.
- The five year earnings growth rate of 5.3% a year is lower than the 9.6% forecast, so anyone leaning bullish is essentially counting on acceleration from what the trailing numbers currently show.
Strong recent profitability with a slightly lower margin puts more weight on whether future growth improves on the 5.3% multi year earnings pace, something bullish investors will be watching closely. 📊 Read the what the Community is saying about York Water.
Premium P/E and DCF fair value gap
- The stock trades at US$29.11 with a trailing P/E of 23.5x compared with the Global Water Utilities average of 15.8x and a peer average of 20.9x, and this price is also above the DCF fair value estimate of about US$25.56.
- Critics highlight that this premium valuation is hard to square with the underlying numbers, and the cautious view leans on a few specific gaps:
- With the share price above the DCF fair value of US$25.56 and earnings growth forecasts below the 20% high growth bar, skeptics see limited room for disappointment without putting pressure on the current multiple.
- The trailing net margin of 25.9% remains healthy in absolute terms, which means the higher P/E is not backed by weak profitability, but rather by the market paying up for a regulated utility where growth expectations are moderate instead of very high.
Coverage pressures around dividend and interest
- York Water offers a 3.13% dividend yield, but this dividend is not well covered by free cash flow and interest payments are not well covered by earnings based on the trailing 12 month data.
- Bears argue that these coverage gaps matter for income focused holders, especially with a premium valuation already in place:
- The combination of a 3.13% yield and weaker free cash flow coverage means the income stream leans on continued solid earnings, which ties back to the forecast growth of about 9.6% a year actually being delivered.
- Interest expense that is not comfortably covered by earnings reduces financial flexibility if conditions change, which can matter more when the stock already trades on a 23.5x P/E versus an industry average of 15.8x.
Next Steps
Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on York Water's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.
If this mix of risks and rewards feels finely balanced, now may be a good moment to review the data yourself and pressure test the assumptions that matter most to you. You can begin with 1 key reward and 2 important warning signs.
See What Else Is Out There
York Water combines a premium 23.5x P/E, modest forecast earnings growth and dividend and interest coverage pressures, which may not suit more value focused or income focused investors.
If you want stocks where pricing and fundamentals look tighter, check out the 51 high quality undervalued stocks to quickly spot companies that might better match your return expectations.
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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