Is California Water Service Group overvalued or undervalued?

As of 21 November 2025, the valuation grade for California Water Service Group moved from very expensive to expensive, indicating a slight improvement in its perceived value. However, the company remains overvalued based on its current metrics. The P/E ratio stands at 20, while the industry average P/E is not provided, suggesting a relative premium. Additionally, the EV to EBITDA ratio is 12.46, which is higher than peers like Essential Utilities, Inc. at 14.36 and SJW Group at 12.04, further supporting the overvaluation stance.
In terms of returns, California Water Service Group has underperformed against the S&P 500, with a year-to-date return of 0.42% compared to 12.26% for the index, and a three-year return of -28.43% versus 67.17% for the S&P 500. This underperformance reinforces the notion that the stock may not be a compelling investment at its current valuation levels.