American Water Works Receives Mixed Ratings from Gurus

A recent report highlights mixed performance for American Water Works Company Inc, as the firm scores 54% in the Growth Investor model by Martin Zweig. This indicates some strengths but also notable weaknesses in earnings growth metrics that could influence investor sentiment.

Date: 18-11-2024

AI Rating: 5

The report provides a comprehensive analysis of American Water Works Company Inc (AWK), highlighting both its strengths and weaknesses based on the Growth Investor model by Martin Zweig.

Earnings Per Share (EPS): While the stock passed the test for current quarter EPS growth being greater than prior quarters, it failed several key tests related to long-term EPS growth, historical growth comparisons, and earnings persistence. These failures indicate potential concerns regarding the sustainability of earnings growth, which could negatively impact investor confidence.

Revenue Growth: The report reveals that although there is sales growth, American Water Works fails to maintain its revenue growth in relation to EPS growth. This discrepancy raises red flags for investors, suggesting that while the company may be increasing sales, it is not translating this into stronger earnings growth. This could potentially lead to questions about profitability.

Overall Financial Health: The P/E ratio and total debt/equity ratio pass the respective tests, indicating reasonable valuations and low debt levels. However, the mixed signals from EPS and revenue growth metrics highlight the need for further evaluation by investors.

Conclusion: Overall, the report grades American Water Works at 54%, reflecting a moderate approval based on its fundamentals. The presence of both significant weaknesses and some strengths suggests a cautious approach for potential investors, closely monitoring future earnings and revenue trends.

Stocks: AWK