📊 HTO Key Takeaways
Is H2O America (HTO) a Good Investment?
H2O America demonstrates stable utility fundamentals with excellent free cash flow generation (30.4% FCF margin) and expanding net margins despite flat revenue. However, the company faces concerning balance sheet metrics including a current ratio of 0.70x, minimal cash reserves, and declining revenue that warrant a cautious approach pending evidence of revenue stabilization.
HTO delivers solid operating margins and growing net income, producing strong free cash flow from operations despite flat-to-declining revenue. However, tight liquidity, moderate leverage with low interest coverage, and unusually low reported capex raise sustainability and balance sheet risk concerns.
Why Buy H2O America Stock? HTO Key Strengths
- Exceptional free cash flow generation of $243.4M with 30.4% FCF margin demonstrates strong cash conversion
- Net profitability improving 9.2% YoY despite 0.6% revenue decline indicates operational efficiency gains
- Strong operating margin of 22.2% typical of essential water utility business with durable demand
- Moderate leverage of 1.23x debt/equity is manageable for regulated utility sector
- Consistent operating margin at 22.2%
- Strong free cash flow and OCF generation
- Regulated water utility with resilient earnings profile
HTO Stock Risks: H2O America Investment Risks
- Current ratio of 0.70x indicates liquidity constraint with insufficient short-term assets to cover liabilities
- Revenue declining 0.6% YoY raises concerns about business stagnation despite margin expansion
- Minimal cash position of $20.7M relative to $5.1B assets and $1.9B debt creates refinancing vulnerability
- Interest coverage ratio of 2.4x provides limited cushion for operational disruptions or rate increases
- Tight liquidity with current/quick ratio at 0.70x and low cash
- Leverage and coverage constraints (D/E 1.23x, interest coverage 2.4x)
- Unusually low capex may signal underinvestment or non-recurring FCF
Key Metrics to Watch
- Revenue growth trajectory and stabilization in next quarters
- Current ratio improvement and cash position adequacy
- Free cash flow sustainability and capital allocation decisions
- Interest coverage ratio and debt refinancing requirements
- Interest coverage trend
- Sustaining vs. reported capital expenditures
H2O America (HTO) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The 30.4% free cash flow margin provides substantial flexibility for dividends, buybacks, and strategic investments. The current ratio below 1.0x warrants monitoring of short-term liquidity.
HTO Profit Margin, ROE & Profitability Analysis
HTO vs Utilities Sector: How H2O America Compares
How H2O America compares to Utilities sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is H2O America Stock Overvalued? HTO Valuation Analysis 2026
Based on fundamental analysis, H2O America has mixed fundamental signals relative to the Utilities sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
H2O America Balance Sheet: HTO Debt, Cash & Liquidity
HTO Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: H2O America's revenue has grown significantly by 44% over the 5-year period, indicating strong business expansion. The most recent EPS of $2.68 reflects profitable operations.
HTO Revenue Growth, EPS Growth & YoY Performance
HTO Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $216.7M | $11.7M | $1.17 |
| Q2 2025 | $173.1M | $11.7M | $0.64 |
| Q1 2025 | $150.0M | $11.7M | $0.36 |
| Q3 2024 | $211.7M | $11.5M | $1.13 |
| Q2 2024 | $159.7M | $11.5M | $0.58 |
| Q1 2024 | $135.8M | $11.5M | $0.36 |
| Q3 2023 | $170.0M | $3.7M | $0.82 |
| Q2 2023 | $148.7M | $3.7M | $0.38 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
H2O America Dividends, Buybacks & Capital Allocation
HTO SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for H2O America (CIK: 0000766829)
📋 Recent SEC Filings
❓ Frequently Asked Questions about HTO
What is the AI rating for HTO?
H2O America (HTO) has a Combined AI Rating of HOLD from Claude (HOLD) and ChatGPT (HOLD) with 67% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are HTO's key strengths?
Claude: Exceptional free cash flow generation of $243.4M with 30.4% FCF margin demonstrates strong cash conversion. Net profitability improving 9.2% YoY despite 0.6% revenue decline indicates operational efficiency gains. ChatGPT: Consistent operating margin at 22.2%. Strong free cash flow and OCF generation.
What are the risks of investing in HTO?
Claude: Current ratio of 0.70x indicates liquidity constraint with insufficient short-term assets to cover liabilities. Revenue declining 0.6% YoY raises concerns about business stagnation despite margin expansion. ChatGPT: Tight liquidity with current/quick ratio at 0.70x and low cash. Leverage and coverage constraints (D/E 1.23x, interest coverage 2.4x).
What is HTO's revenue and growth?
H2O America reported revenue of $800.6M.
Does HTO pay dividends?
H2O America pays dividends, with $58.6M distributed to shareholders in the trailing twelve months.
Where can I find HTO SEC filings?
Official SEC filings for H2O America (CIK: 0000766829) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is HTO's EPS?
H2O America has a diluted EPS of $2.92.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is HTO a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, H2O America has a HOLD rating with 67% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is HTO stock overvalued or undervalued?
Valuation metrics for HTO: ROE of 6.7% (sector avg: 10%), net margin of 12.8% (sector avg: 12%). Compare these metrics with sector averages to assess valuation.
Should I buy HTO stock in 2026?
Our dual AI analysis gives H2O America a combined HOLD rating for 2026. Revenue is data pending, with profitability above sector average. Always conduct your own research.
What is HTO's free cash flow?
H2O America's operating cash flow is $244.8M, with capital expenditures of $1.5M. FCF margin is 30.4%.
How does HTO compare to other Utilities stocks?
Vs Utilities sector averages: Net margin 12.8% (avg: 12%), ROE 6.7% (avg: 10%), current ratio 0.70 (avg: 0.8).