Is Consolidated Water Co. Ltd. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Consolidated Water Co. Ltd. moved from fair to very expensive, indicating a significant shift in its perceived value. The company appears overvalued based on its current metrics, which include a P/E ratio of 26, a Price to Book Value of 2.03, and an EV to EBITDA ratio of 14.68. In comparison, peers such as Aris Water Solutions, Inc. have a P/E of 21.89, and Artesian Resources Corp. has a more favorable EV to EBITDA of 10.58, highlighting that Consolidated Water is trading at a premium relative to its industry.
Despite this overvaluation, Consolidated Water has demonstrated strong recent performance, with a year-to-date return of 39.98% compared to the S&P 500's 13.30%, and a remarkable 5-year return of 227.96% against the S&P 500's 91.29%. This strong performance may attract investor interest, but the high valuation ratios suggest caution for potential investors.