Is Consolidated Water Co. Ltd. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Consolidated Water Co. Ltd. has moved from fair to very expensive, indicating a significant shift in its valuation outlook. The company appears overvalued, with a P/E ratio of 26, which is notably higher than its peers such as Aris Water Solutions, Inc. at 21.89 and Artesian Resources Corp. at 15.08. Additionally, the EV to EBITDA ratio stands at 14.68, again above the industry average, suggesting that investors are paying a premium for earnings relative to its competitors.
In terms of performance, Consolidated Water Co. Ltd. has shown impressive returns, 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%. These strong returns may attract investor interest, but the elevated valuation ratios indicate that the stock may not be a prudent investment at current levels.