Is California Water Service Group overvalued or undervalued?

As of 17 October 2025, the valuation grade for California Water Service Group has moved from very expensive to expensive, indicating a slight improvement but still suggesting overvaluation. The company appears to be overvalued based on its P/E ratio of 20, which is higher than peers like Essential Utilities, Inc. with a P/E of 16.89 and SJW Group at 17.09. Additionally, the EV to EBITDA ratio stands at 12.46, which is also above the industry average, further supporting this valuation assessment.
In comparison to its peers, California Water Service Group's ROE of 8.20% is lower than American States Water Co.'s 22.76%, highlighting a potential inefficiency in generating returns for shareholders. Furthermore, the company's recent stock performance shows a 1-week return of 2.75% compared to the S&P 500's 1.70%, but over the longer term, it has underperformed significantly, with a 3-year return of -13.66% versus the S&P 500's 81.19%. Overall, these metrics suggest that California Water Service Group is currently overvalued.