SJW (SJW, Financial) announced a significant increase in its first-quarter revenue, reaching $167.6 million compared to $149.4 million in the same period last year. This growth highlights the effectiveness of the company's local water operations and strategic business execution. Key developments include the approval of new rates at San Jose Water set to begin January 1, 2025, the implementation of a Water Infrastructure and Conservation Charge increase, and the authorization to recover additional revenues by meeting performance standards at Connecticut Water.
In addition, SJW invested $78.2 million in enhancing its water supply and infrastructure nationwide, aligning with its 2025 and five-year capital expenditure objectives. The company has also initiated capital projects aimed at achieving sustainable operational efficiencies that will benefit its customers. Looking forward, SJW plans to maintain its momentum by continuing its capital investment strategy and fostering key stakeholder relationships to support its culture of service.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 5 analysts, the average target price for SJW Group (SJW, Financial) is $66.00 with a high estimate of $73.00 and a low estimate of $61.00. The average target implies an upside of 23.34% from the current price of $53.51. More detailed estimate data can be found on the SJW Group (SJW) Forecast page.
Based on the consensus recommendation from 6 brokerage firms, SJW Group's (SJW, Financial) average brokerage recommendation is currently 2.5, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for SJW Group (SJW, Financial) in one year is $71.57, suggesting a upside of 33.75% from the current price of $53.51. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the SJW Group (SJW) Summary page.
SJW Key Business Developments
Release Date: February 27, 2025
- Revenue: $748.4 million in 2024, a 12% increase over 2023.
- Net Income: GAAP net income of $94 million, an 11% increase over 2023.
- Adjusted Net Income: $96.8 million, a 15% increase over the prior year.
- Diluted Earnings Per Share: $2.87 in 2024, compared to $2.68 in 2023.
- Adjusted Diluted Earnings Per Share: $2.95 in 2024.
- Water Production Expense: Increased 14% in 2024.
- Other Operating Expenses: Increased 8% in 2024.
- Capital Expenditures: $353 million invested in water and wastewater utility infrastructure in 2024.
- Five-Year Capital Plan: Increased 25% to approximately $2 billion.
- 2025 Guidance: Earnings per share range of $2.90 to $3.00.
- Equity Issuance: $87 million generated in 2024 through the ATM program.
- Interest Expense: Average borrowing rate of 6.44% in 2024.
- Effective Income Tax Rate: Approximately 9% in 2024.
- Infrastructure Investment in Texas: $133 million planned for 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- SJW Group (SJW, Financial) reported a nearly 11% increase in net income from 2023 on a GAAP basis, reflecting strong financial performance.
- The company secured approval for increases in infrastructure recovery mechanisms in Maine and filed a petition to unify rate districts under a single tariff, streamlining operations.
- SJW Group (SJW) was recognized by Newsweek as one of America's Most Responsible Companies 2025, highlighting its commitment to sustainability and governance.
- The company invested $353 million in water and wastewater utility infrastructure across four states in 2024, demonstrating a strong commitment to infrastructure improvement.
- SJW Group (SJW) announced a 25% increase in its five-year capital plan to approximately $2 billion, indicating a robust growth strategy and commitment to long-term investments.
Negative Points
- The company experienced a significant increase in water production expenses, driven by rate increases from water wholesalers and higher customer usage.
- SJW Group (SJW) faced higher operating expenses, including a $9.9 million increase in administrative and general costs and a $7 million increase in depreciation and amortization.
- The effective consolidated income tax rate increased from 7% in 2023 to 9% in 2024, impacting overall profitability.
- The company incurred $3.4 million in costs related to a potential acquisition, which were added back to adjusted net income and earnings per share.
- SJW Group (SJW) is dealing with the impacts of extreme drought in its Texas service area, highlighting the need for greater system resiliency and redundancy.
