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 valuation outlook. However, the company is still considered overvalued based on its current metrics. The P/E ratio stands at 20, which is higher than the peer average of 16.89 for Essential Utilities, Inc. and 17.09 for SJW Group. Additionally, the EV to EBITDA ratio of 12.46 also suggests a premium compared to peers like American States Water Co. at 15.88.
In terms of performance, California Water Service Group has underperformed relative to the S&P 500, with a year-to-date return of 0.13% compared to the S&P 500's 12.26%. Over the past three years, the stock has declined by 30.30%, while the S&P 500 has surged by 67.17%. This stark contrast reinforces the view that the stock is overvalued in the current market environment.