Is California Water Service Group overvalued or undervalued?

As of 1 May 2025, the valuation grade for California Water Service Group has moved from fair to expensive. The company appears to be overvalued based on its current metrics. Key ratios include a P/E ratio of 20, an EV to EBITDA of 12.46, and a Price to Book Value of 1.67. In comparison, Essential Utilities, Inc. has a fair P/E of 16.89, while American States Water Co. shows a higher P/E of 22.76, indicating that California Water Service Group is priced at a premium relative to some peers.
The stock has underperformed against the S&P 500, with a one-year return of -16.19% compared to the index's 17.14%, and a three-year return of -21.73% versus 70.41% for the S&P 500. This performance reinforces the notion that the stock may not be justified at its current valuation levels.