Is American States Water Co. overvalued or undervalued?

As of 6 August 2025, the valuation grade for American States Water Co. moved from expensive to fair. The company appears fairly valued based on its current metrics. Key ratios include a P/E ratio of 24, an EV to EBITDA of 16.39, and a Price to Book Value of 3.09. In comparison to peers, Essential Utilities, Inc. has a P/E of 16.89 and an EV to EBITDA of 14.36, while SJW Group shows a P/E of 17.09 and an EV to EBITDA of 12.04, indicating that American States Water Co. is priced higher than some of its peers.
Despite the fair valuation, the company's recent stock performance has been underwhelming, with a year-to-date return of -7.46% compared to the S&P 500's 12.22%, and a three-year return of -16.17% versus the S&P 500's impressive 70.41%. This suggests that while the valuation may be fair, the stock's performance has lagged significantly behind the broader market.