Free cash flow is negative and the stock has already exceeded the take-profit level, leaving no favorable risk/reward; three misses in the last four quarters and a payout ratio of roughly 282% of earnings compound the concern for holders considering whether to reduce exposure.
Thesis pillars
- Negative Free Cash Flow→Stable
- Persistent Earnings Miss Pattern↓Deteriorating
- Stock Above Take Profit No Upside↓Deteriorating
- +2 more pillars — see the Why tab for full reasoning
American Water Works Company, I (AWK) Stock Analysis
Momentum Cont setup
Utilities · Utilities - Regulated Water
Hold if already holding. Not a fresh buy at $137.69, but acceptable to hold if already in. Reasons: Analyst target reached - limited upside remaining; Leverage penalty (D/E 1.4): -0.5.
American Water Works, the largest publicly-traded U.S. water and wastewater utility by operating revenues, provides drinking water and wastewater services to approximately 14 million people across 14 states through regulated utilities and military base contracts. Regulated... Read more
Hold if already holding. Not a fresh buy at $137.69, but acceptable to hold if already in. Reasons: Analyst target reached - limited upside remaining; Leverage penalty (D/E 1.4): -0.5. Chart setup: Trend continuation, RSI 67, MACD bullish. Downgraded from BUY WAIT — price $137.56 has reached target $137.63. No upside to wait for. Score 4.8/10, moderate confidence.
Passes 6/9 gates (positive momentum, clean insider activity, no SEC red flags, news events none recent, semi cycle peak clear, materials cycle peak clear). Fails on favorable risk/reward ratio and earnings proximity 0d<=7d. Suitability: moderate.
About American Water Works Company, I
About American Water Works Company, I
American Water Works served 3.6 million active customers across 14 states in 2025, generating $4,723 million in Regulated Businesses operating revenues — 92% of the company's total. Pennsylvania contributed 24.1% of regulated revenues ($1,140 million) and New Jersey 23.4% ($1,105 million). A pending stock-for-stock merger with Essential Utilities, announced October 26, 2025, would add Essential as a wholly-owned subsidiary; the company estimates closing by the end of the first quarter of 2027.
American Water earns revenue through cost-of-service rates authorized by state PUCs in each of its 14 regulated states, with rates designed to recover operating expenses and provide a return on invested capital. Residential customers generated 54% of water service revenues in 2025, commercial customers 21%, with fire service, industrial, and public/other customers each at 4–7%; wastewater services contributed 9% of regulated revenues. Infrastructure renewal drives capital deployment: the company plans to invest between $46 billion and $48 billion over the next 10 years, largely for pipe replacement and facility upgrades, targeting better than a 100-year pipe replacement rate within the decade. Infrastructure replacement surcharge mechanisms are approved in 9 states including Iowa, Illinois, Indiana, Missouri, New Jersey, Pennsylvania, Tennessee, Virginia, and West Virginia to reduce regulatory lag between investment and rate recovery. The company also operates Other businesses providing water and wastewater services at U.S. military bases under firm-fixed-price contracts.
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Pennsylvania and New Jersey together represent approximately 47.5% of American Water's 2025 regulated operating revenues, concentrating rate-case outcome risk with two state PUCs. The California subsidiary Cal Am faces a separate regulatory constraint: orders from the California State Water Resources Control Board require elimination of Carmel River diversions, with Cal Am constructing a desalination plant and supporting the Monterey Peninsula groundwater replenishment project to comply. Noncompliance could expose Cal Am to fines and penalties. The EPA's April 2024 PFAS hazardous substance designation under CERCLA, reaffirmed in September 2025, also leaves the company's potential passive-receiver liability for PFAS remediation uncertain.
See also: Utilities · Utilities - Regulated Water
From American Water Works Company, I's most recent 10-K filing, extracted June 9, 2026.
Recent developments
updated 2026-07-29Recent Developments — American Water Works Company, I
Latest news
- NEWS American Water Announces Dividend Increase - PR Newswire — PR Newswire positive
- NEWS American Water Works (AWK) Reports Next Week: Wall Street Expects Earnings Growth - Yahoo Finance — Yahoo Finance positive
- NEWS Swiss National Bank Acquires 38,300 Shares of American Water Works Company, Inc. $AWK - MarketBeat — MarketBeat neutral
- NEWS ABN Amro Investment Solutions Has $14.85 Million Holdings in American Water Works Company, Inc. $AWK - MarketBeat — MarketBeat neutral
- NEWS Zurcher Kantonalbank Zurich Cantonalbank Sells 52,044 Shares of American Water Works Company, Inc. $AWK - MarketBeat — MarketBeat neutral
Generated 2026-07-30T22:23:46Z.
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Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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Rating Breakdown
3 floor-breakers
Growth below the gate floor. Component breakdown shows what dragged the score down.static
Ranks in the bottom of its industry peers on the composite signal. Better names in the same sector exist.static
No near-term catalyst priced in. Thesis progression will come from fundamentals grinding, not event reaction.static
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Hold if already holding. Not a fresh buy at $137.69, but acceptable to hold if already in. Reasons: Analyst target reached - limited upside remaining; Leverage penalty (D/E 1.4): -0.5. Chart setup: Trend continuation, RSI 67, MACD bullish. Downgraded from BUY WAIT — price $137.56 has reached target $137.63. No upside to wait for. Target $137.63 (-0.0%), stop $121.68 (−13.2%), A.R:R -1.9:1. Score 4.8/10, moderate confidence.
Take-profit target: $137.63 (-11.9% upside). Target $137.63 (-0.0%), stop $121.68 (−13.2%), A.R:R -1.9:1. Stop-loss: $121.68.
Analyst target reached - limited upside remaining; Leverage penalty (D/E 1.4): -0.5; Value-trap signals (2/5): Material insider selling (122 sells, 0.39% of cap), Negative free cash flow.
American Water Works Company, I trades at a P/E of 23.9 (forward 21.0). TrendMatrix value score: 4.6/10. Verdict: Hold.
18 analysts cover AWK with a consensus score of 3.4/5. Average price target: $139.
What does American Water Works Company, I do?American Water Works, the largest publicly-traded U.S. water and wastewater utility by operating revenues, provides...
American Water Works, the largest publicly-traded U.S. water and wastewater utility by operating revenues, provides drinking water and wastewater services to approximately 14 million people across 14 states through regulated utilities and military base contracts. Regulated Businesses generated $4,723 million in 2025 (92% of total revenues), with Pennsylvania and New Jersey as the two largest states. A pending merger with Essential Utilities is expected to close by end of Q1 2027.