York Water (YORW) has put up steady numbers for FY 2025 so far, with Q3 revenue at US$20.4 million and basic EPS at US$0.43, backed by trailing twelve month revenue of US$76.9 million and EPS of US$1.39 across the recent reporting run. The company has seen quarterly revenue range from US$18.5 million to US$20.4 million over the last three quarters, while EPS moved between US$0.25 and US$0.43. This sets a clear baseline for how current results fit into the recent trend. Margins remain central to the story, as investors weigh stable top line and EPS figures against a slight squeeze in profitability.
See our full analysis for York Water.With the headline numbers on the table, the next step is to see how this earnings profile lines up, or clashes, with the core narratives that have built up around York Water over the past year.
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26.1% Profit Margin Leaves Less Cushion
- Net income over the last twelve months is US$20.0 million on US$76.9 million of revenue, which lines up with the 26.1% net margin reported, compared with 28.6% a year earlier.
- Critics highlight that weaker margins can make utilities more sensitive to financing costs, and here the bearish worry is backed up by interest expense coverage being flagged as a major risk and dividend coverage by free cash flow also being weak, so the 2.5 percentage point margin gap versus last year gives those concerns some numerical support.
TTM EPS Of US$1.39 Versus Mid-Single-Digit Growth Story
- Trailing twelve month basic EPS sits at US$1.39, while earnings growth is described as roughly 6.1% per year over the past five years and forecast at about 6.56% per year going forward.
- Supporters of the bullish growth story point out that steady mid-single-digit earnings expansion fits a regulated water utility, yet the data also show EPS on a trailing basis at US$1.39 versus a forecast growth rate of around 6% to 7%, so investors still need that growth path to continue at a similar clip to match the narrative.
P/E Of 24x And Price Above DCF Fair Value
- The shares trade around US$33.25, which at a P/E of 24x sits above the Global Water Utilities industry average P/E of 18.1x and above the DCF fair value of about US$25.56, while still below the peer group P/E of 33.6x.
- Bears argue that paying a premium P/E while the share price stands above the US$25.56 DCF fair value leaves less room for error, and that concern is reinforced by the weaker coverage of interest expense and the 2.74% dividend by free cash flow, since those balance sheet and cash flow pressures can matter more when the valuation is already richer than the broader industry.
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.
Does this mix of solid earnings, richer valuation and flagged risks leave you confident or cautious? Take a moment to review the figures, pressure test the story against your own expectations, and weigh up 1 key reward and 2 important warning signs before you decide what it all means for you.
See What Else Is Out There
York Water combines a richer 24x P/E, softer margins and tight interest and dividend coverage, which leaves less room for balance sheet or cash flow strain.
If you are concerned about those pressure points and want companies with sturdier finances, check out our solid balance sheet and fundamentals stocks screener (40 results) today to compare alternatives that may better fit your risk comfort.
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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