Regulated Water · NYSE
Current Price
$131.97
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on American Water Works Company, Inc. with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
Open DCF Calculator for AWKAmerican Water Works Company, Inc., through its subsidiaries, provides water and wastewater services in the United States. It offers water and wastewater services to approximately 1,700 communities in 14 states serving approximately 3.4 million active customers. The company serves residential customers; commercial customers, including food and beverage providers, commercial property developers and proprietors, and energy suppliers; fire service and private fire customers; industrial customers, such as large-scale manufacturers, mining, and production operations; public authorities comprising government buildings and other public sector facilities, such as schools and universities; and other utilities and community water and wastewater systems. It also provides water and wastewater services on various military installations; and undertakes contracts with municipal customers, primarily to operate and manage water and wastewater facilities, as well as offers other related services. In addition, the company operates approximately 80 surface water treatment plants; 480 groundwater treatment plants; 160 wastewater treatment plants; 52,500 miles of transmission, distribution, and collection mains and pipes; 1,100 groundwater wells; 1,700 water and wastewater pumping stations; 1,300 treated water storage facilities; and 76 dams. It serves approximately 14 million people with drinking water, wastewater, and other related services in 24 states. American Water Works Company, Inc. was founded in 1886 and is headquartered in Camden, New Jersey.
ROIC (TTM)
-117.9%
ROE (TTM)
10.1%
FCF Yield
-4.67%
Based on trailing twelve-month data, AWK shows a free cash flow per share of N/A and a ROIC of -117.9%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of -4.67% are important context metrics when evaluating AWK's stock valuation relative to peers.
The intrinsic value of AWK depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether AWK is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $131.97. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on American Water Works Company, Inc.: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Regulated Water industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting AWK's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For American Water Works Company, Inc., this means projecting how much free cash flow the Regulated Water will produce over the next 5-10 years, then discounting those amounts to today's dollars. AWK's ROIC of -117.9% suggests the company may face challenges generating returns above its cost of capital.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For AWK, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
