H2O America
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Range $60 – $72
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About the company
H2O America, operating nationwide via its various subsidiaries, is a key provider of essential water utility and associated services. The company manages the entire water lifecycle, from procuring, storing, and purifying water to its distribution, wholesale, and retail sale, alongside offering wastewater management services. Its water supply is diverse, sourced from groundwater wells, surface water collected through watershed runoff and diversions, reclaimed water, and imported water acquired from the Santa Clara Valley Water District.
- CEO
- Andrew F. Walters
- IPO
- 1972
- Employees
- 837
- HQ
- San Jose, CA, US
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- Market Cap
- $2.70B
- P/E
- 22.52
- Fwd P/E
- 23.04
- PEG
- -3.44
- P/S
- 3.25
- P/B
- 1.39
- EV/EBITDA
- 14.27
- Div Yield
- 2.70%
- Gross Margin
- 56.45%
- Op Margin
- 21.53%
- Net Margin
- 12.91%
- ROE
- 6.35%
- ROIC
- 3.04%
Latest fiscal year · YoY change
- Revenue
- $800.59M+7.0%
- Gross Profit
- $374.11M-12.0%
- Op Income
- $180.99M
- Net Income
- $102.58M+9.2%
- EPS
- $2.93+4.6%
- OCF Growth
- +25.2%
- FCF Growth
- -50.2%
- 52W High
- $67.09
- 52W Low
- $43.75
- 50D MA
- $61.37
- 200D MA
- $55.54
- Beta
- 0.33
- RSI (14)
- 60
- Avg Volume
- 456.79K
Earnings call summaries
Pick a quarter — each call distilled into takeaways, results, and a bull vs bear read.
H2O America posted solid Q2 EPS, reiterated 2026 guidance, and highlighted progress on Texas acquisitions and rate recovery, while flagging California water-supply affordability concerns.· July 28, 2026
- Q2 2026 GAAP diluted EPS was $0.62 and adjusted diluted EPS was $0.72; YTD EPS was $1.12 GAAP and $1.23 adjusted.
- Management reiterated full-year 2026 adjusted diluted EPS guidance of $3.08 to $3.18 and its long-term 6% to 8% EPS CAGR target.
- Capital deployment remains active: $207 million invested in infrastructure in H1, or 43% of the $483 million 2026 CapEx budget, excluding Quadvest.
- Quadvest approval appears near the finish line, with PUCT staff recommending the deal proceed and management still targeting a late Q3 or early Q4 close.
- Texas, Connecticut, Maine and California regulatory recoveries are progressing, but the Texas SIC outcome could create near-term variability if approved below request.
H2O America reported Q2 2026 GAAP diluted EPS of $0.62 and adjusted diluted EPS of $0.72, versus $0.75 adjusted EPS in Q2 2025. Year-to-date 2026 diluted EPS was $1.12 GAAP and $1.23 adjusted, versus $1.25 adjusted in the same period of 2025. Management said first-half adjusted net income grew 17%, but weighted average diluted shares were 19% higher, and the March equity raise reduced EPS by a net $0.06 year to date. Revenue drivers included a $0.30 per share benefit from higher revenues in Q2 and a $0.70 per share benefit in the first half, partially offset by water production and operating expense increases and dilution. For 2026, the company reiterated adjusted diluted EPS guidance of $3.08 to $3.18, expects to stay out of equity markets through at least year-end 2027 barring new M&A, and still expects to raise $100 million to $200 million of debt to fund Quadvest, with strong liquidity and all but $1 million available under $370 million of bank lines.
Andrew Walters emphasized that the quarter was consistent with internal expectations and supportive of the company’s standalone 2026 EPS guidance and long-term growth target. His strategic focus was on disciplined infrastructure investment, constructive regulatory engagement, and closing the transformational Quadvest acquisition, which he said should help drive value beginning in 2028. He also spent significant time on California water-supply affordability, arguing that rising supply costs are unsustainable and that the company is exploring purified water and desalination as longer-term alternatives.
Ann Kelly highlighted that Q2 adjusted EPS of $0.72 was down from $0.75 a year ago, largely because higher revenues were more than offset by water production expense, operating expense, and dilution from equity issuance. She quantified the first-half benefit from higher revenues at $0.70 per share, including $0.41 from rate relief and infrastructure surcharges, and noted that more than 90% of budgeted year-over-year revenue increases have already been approved by regulators. She also said H1 CapEx was $207 million, or 43% of the $483 million budget, and reiterated strong liquidity, the use of the March equity raise to pay down bank lines and hold cash equivalents, and plans to fund Quadvest with a mix of the forward, retained equity proceeds, and $100 million to $200 million of debt.
Analysts focused on the Texas rate path, the timing and structure of the Quadvest close, and whether the Texas SIC dispute signals a worse regulatory backdrop. Management said the Texas GRC is expected to be filed in the first quarter of 2027 for 2028 rates, that another Texas rate filing would not be sooner than roughly a three-year cadence, and that they do not see deterioration in the Texas regulatory compact. They also said the Quadvest close should follow the August statutory deadline once the order is issued, with HSR already filed, and that Connecticut settlement is possible but not guaranteed.
The bull case from the call is that H2O America has visible earnings support from approved rate relief, infrastructure surcharges, and a large capital plan already underway. Management sounded confident on closing Quadvest, growing Texas significantly over time, and maintaining liquidity and financing flexibility without needing new equity through at least 2027. They also portrayed California’s alternative water-supply projects as potentially improving affordability and long-term control over costs.
The main bear case is dilution and regulatory execution risk: the March equity raise and higher share count already weighed on EPS, and the Texas SIC decision could be less favorable than requested. Management also acknowledged that customer bills are being pressured by rising purchased-water and extraction costs in California, which they said could more than double over the next 10 years if unchanged. Several growth initiatives are still early, including the Connecticut and Maine GRCs, California PFAS recovery, and the large Texas integration and rate case process.
AI summary of the company's earnings call · Paraphrased · Not investment advice
- Free Float
- 87.2%
- Shares Outstanding
- 41.86M
- Float Shares
- 36.49M
Buy/sell ratio 0.67. Sells can include pre-scheduled 10b5-1 plan sales, not just discretionary selling.
Held by 370 ETFs
Biggest fund positions in HTO by dollar value.
Recent insider transactions
Who's buying, who's selling, and how much.
| Date | Insider | Type | Shares |
|---|---|---|---|
| Jul 7, 26 | ATLAS Infrastructure Partners (UK) Ltd. | other | 0 |
| Jul 1, 26 | ATLAS Infrastructure Partners (UK) Ltd. | other | 0 |
| May 29, 26 | ATLAS Infrastructure Partners (UK) Ltd. | other | 0 |
| Apr 10, 26 | ATLAS Infrastructure Partners (UK) Ltd. | other | 0 |
| Mar 4, 26 | ATLAS Infrastructure Partners (UK) Ltd. | other | 0 |
| Jul 30, 26 | Mattern Megan | other | 1,154 |
| Jul 7, 26 | ATLAS Infrastructure Partners (UK) Ltd. | buy | 2,784 |
| Jul 1, 26 | Walters Andrew F | sell | 374 |
| Jul 1, 26 | Kelly Ann P | other | 88 |
| Jul 1, 26 | ATLAS Infrastructure Partners (UK) Ltd. | buy | 2,132 |
A “Sell” may be a pre-scheduled 10b5-1 plan sale rather than a discretionary decision — read insider selling with that in mind.
Our HTO coverage
Recent articles, reports, and earnings notes.
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Generate HTO report →H2O America Receives Regulatory Approval for Texas Subsidiary's Acquisition of Quadvest
globenewswire.com · Aug 17
H2O America: A Transformative Acquisition But At A Cost
seekingalpha.com · Aug 10
H2O America $HTO Shares Acquired by Fifth Third Bancorp
defenseworld.net · Jul 30
H2O America Q2 Earnings Call Highlights
defenseworld.net · Jul 30
First Trust Advisors LP Acquires 29,594 Shares of H2O America $HTO
defenseworld.net · Jul 29
H2O America (HTO) Q2 2026 Earnings Call Transcript
seekingalpha.com · Jul 28
H2O America Q2 Earnings Call Highlights
marketbeat.com · Jul 28
H2O America Announces Second Quarter 2026 Financial Results
globenewswire.com · Jul 27
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