Is American Water Works Co., Inc. overvalued or undervalued?

As of 30 June 2025, the valuation grade for American Water Works Co., Inc. has moved from fair to expensive, indicating that the stock is overvalued. The company exhibits a P/E ratio of 26, which is higher than the industry average, alongside an EV to EBITDA ratio of 16.39 and a PEG ratio of 2.26, suggesting that the stock is trading at a premium relative to its earnings growth potential.
In comparison to peers, American Water Works Co., Inc. has a P/E of 26.81, which is slightly above its own ratio, and an EV to EBITDA of 16.55, reinforcing the notion of overvaluation. Notably, the company's recent stock performance has lagged behind the S&P 500, with a 1-year return of -9.10% compared to the S&P 500's 17.14%, highlighting the challenges it faces in delivering shareholder value.