Is American States Water Co. overvalued or undervalued?

As of 17 October 2025, the valuation grade for American States Water Co. has moved from expensive to fair. Based on the current metrics, the company appears to be fairly valued. The P/E ratio stands at 24, while the industry average P/E is not provided, but peer comparison shows that Essential Utilities, Inc. has a P/E of 16.89, indicating that American States Water Co. is trading at a premium relative to some peers. Additionally, the EV to EBITDA ratio is 16.39, and the PEG ratio is notably high at 4.98, suggesting that the stock may be overvalued in terms of growth expectations.
In comparison to its peers, American States Water Co. has a fair valuation with a P/E of 22.76, while California Water Service Group is considered expensive with a P/E of 20.41. The company's recent stock performance has lagged behind the S&P 500, with a year-to-date return of -2.90% compared to the S&P 500's 13.30%, and a 3-year return of -12.81% versus the S&P 500's 81.19%. This underperformance reinforces the notion that the stock may not be an attractive investment at its current valuation.