Is Consolidated Water Co. Ltd. overvalued or undervalued?

As of 13 August 2025, the valuation grade for Consolidated Water Co. Ltd. has moved from expensive to very expensive, indicating a significant shift in its perceived value. The company is currently overvalued, as evidenced by its P/E ratio of 26, which is notably higher than its peers such as Aris Water Solutions, Inc. with a P/E of 21.89 and The York Water Co. at 22.13. Additionally, the EV to EBITDA ratio stands at 14.68, further highlighting the premium valuation compared to Artesian Resources Corp., which has a fair valuation with an EV to EBITDA of 10.58.
The company's return performance has been strong, with a year-to-date return of 33.29%, significantly outpacing the S&P 500's 12.22% during the same period. However, given the high valuation ratios and the recent grade change, it suggests that investors may be pricing in excessive growth expectations, making Consolidated Water Co. Ltd. a less attractive investment at its current price of 34.51.