Value
7.0/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 4.8 |
| P/S | 8.0 |
| EV/EBITDA | 3.8 |
| Fwd P/E | 6.5 |
| PEG | 9.4 |
- ▸Forward P/E: 19.9x
- ▸PEG: 0.60
CWCO · Why this verdict
Why Consolidated Water Co. (CWCO) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictHOLD
Overall score5.2/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Consolidated Water is a high cash-conversion water utility with a 3-of-4 earnings beat streak and a 4.46 reward-to-risk, but a confirmed downtrend makes adding more unattractive for now.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Free cash flow is 142% of net income and the Piotroski F-Score is 8/9, indicating high-quality earnings. Quality breakdown | Free cash flow conversion stays well above net income over the next four quarters. | →Stable |
| CounterThe business has no competitive moat and revenue is declining 2%, so cash conversion may reflect working-capital timing. | ||
CWCO beat EPS estimates in 3 of the last 4 quarters with an average surprise of 56.21%, including 171.07% in March 2026. Last 4 quarters | Earnings continue to beat consensus through the next four reports. | ↓Deteriorating |
| CounterThe May 2026 quarter missed by 7.46%, and surprises are large because the quarterly EPS base is small. | ||
At $27.79 the stock has 31.5% upside to the $36.55 analyst target against 7.1% downside to the $26.24 support level, a reward-to-risk of 4.46. Upside pct | Price recovers toward the analyst target while holding above support. | ↑Improving |
| CounterThe stock is in a falling-knife pattern with a death cross, RSI near 27 and an elevated put/call ratio of 1.40. | ||
CWCO is a dividend aristocrat with a 2.0% yield, giving a defensive income cushion while the share price is weak. Catalyst breakdown | The dividend is maintained or raised over the next 12 months. | ↓Deteriorating |
| CounterRevenue declined 2% and the company has no moat, which could pressure payout growth. | ||
The stock sits below its 200-day average, whose slope is -2.7% per 30 days, which confirms a downtrend with momentum scored 3.5/10. Bear case | The 200-day average stops falling and momentum recovers above 4.5 within 12 months. | ↑Improving |
| CounterRSI near 27 with rising on-balance volume shows capitulation and accumulation, a setup that often precedes a rebound. | ||
Free cash flow is 142% of net income and the Piotroski F-Score is 8/9, indicating high-quality earnings.
→StableQuality breakdown
- Expectation
- Free cash flow conversion stays well above net income over the next four quarters.
CounterThe business has no competitive moat and revenue is declining 2%, so cash conversion may reflect working-capital timing.
CWCO beat EPS estimates in 3 of the last 4 quarters with an average surprise of 56.21%, including 171.07% in March 2026.
↓DeterioratingLast 4 quarters
- Expectation
- Earnings continue to beat consensus through the next four reports.
CounterThe May 2026 quarter missed by 7.46%, and surprises are large because the quarterly EPS base is small.
At $27.79 the stock has 31.5% upside to the $36.55 analyst target against 7.1% downside to the $26.24 support level, a reward-to-risk of 4.46.
↑ImprovingUpside pct
- Expectation
- Price recovers toward the analyst target while holding above support.
CounterThe stock is in a falling-knife pattern with a death cross, RSI near 27 and an elevated put/call ratio of 1.40.
CWCO is a dividend aristocrat with a 2.0% yield, giving a defensive income cushion while the share price is weak.
↓DeterioratingCatalyst breakdown
- Expectation
- The dividend is maintained or raised over the next 12 months.
CounterRevenue declined 2% and the company has no moat, which could pressure payout growth.
The stock sits below its 200-day average, whose slope is -2.7% per 30 days, which confirms a downtrend with momentum scored 3.5/10.
↑ImprovingBear case
- Expectation
- The 200-day average stops falling and momentum recovers above 4.5 within 12 months.
CounterRSI near 27 with rising on-balance volume shows capitulation and accumulation, a setup that often precedes a rebound.
Per-dimension breakdown
Quality
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.5 |
| ROA | 2.5 |
| Gross margin | 3.1 |
| Op margin | 4.5 |
| Net margin | 6.3 |
| Current ratio | 7.1 |
| FCF quality | 9.7 |
| Moat | 5.4 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 142% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 8/9
Growth
5.3/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.0 |
| EPS growth | 8.7 |
- ▸Declining revenue: -2%
Momentum
1.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.0 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 1.0 |
| Volume | 3.9 |
- ▸Capitulation risk (RSI 23, below 200MA)
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -2.8%/30d — confirmed downtrend
Sentiment
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.0 |
| Analyst rating | 5.0 |
| Price target | 9.7 |
- ▸Analyst upside: 59%
Insider
3.8/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 5.0 |
- ▸Modest insider selling — $86,538 (0.020% of mkt cap)
Peer rank
3.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.3 |
| quality rank | 1.7 |
| growth rank | 0.0 |
- ▸Conservative debt levels
Technical
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.4 |
| support resistance | 9.4 |
| 52w position | 4.0 |
Risk (lower is worse)
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.4 |
| days to cover | 3.7 |
| volatility | 3.8 |
| put call | 7.5 |
| implied vol | 0.0 |
| beta | 10.0 |
| debt equity | 10.0 |
- ▸High IV: 83%
- ▸Concentration risks: 2 MED (10-K Item 1A)
Catalyst
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 7.5 |
| news activity | 5.0 |
- ▸Strong earnings: 3B/1M
- ▸Earnings in 11 days
- ▸Dividend aristocrat: 2.1% yield
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (4)
- ASYMMETRY:5.1>=1.5
- INSIDER:OK
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:1.8<4.5
- DEATH_CROSS:HARD_BLOCK
Warning (2)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
- EARNINGS_PROXIMITY:11d<=14d (soft)
Reward-to-Risk
5.07
Upside
+35.4%
Downside
7.0%
Sizing output
AVOID
SetupFalling Knife — Death cross, below all MAs, RSI 23, MACD bearish
EdgeCatalyst-Driven — Earnings in 11d with 3/4 beat streak
SuitabilityAggressive — MCap $0.4B<$5B
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: ASYMMETRY:5.1>=1.5. Top dim: Technical at 7.3; weakest: Momentum at 1.8. No conviction either direction.
The strongest dimensions are Technical at 7.3, Value at 7.0, and Catalyst at 6.5; the weakest are Momentum at 1.8, Peer rank at 3.5, and Insider at 3.8. The V9 engine flagged 2 failed gates with 2 warnings, producing an asymmetric reward-to-risk of 5.07 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Excellent Cash Conversion
Trip ifFree cash flow to net income falls below 80% from the current 142%.
- P2Earnings Beat Streak
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P3Analyst Target Upside
Trip ifShare price falls below the $26.24 support level.
- P4Dividend Aristocrat Income
Trip ifThe dividend is cut by more than 10% from the current level.
- P5Confirmed Downtrend Pressure
Trip ifThe 200-day moving average slope rises above 0% per 30 days from the current -2.7%.