Regulated Water · NASDAQ
Current Price
$54.86
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on SJW Group with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
SJW Group, through its subsidiaries, provides water utility services in the United States. It engages in the production, purchase, storage, purification, distribution, wholesale, and retail sale of water and wastewater services. The company also provides non-tariffed services, including water system operations, maintenance agreements, and antenna site leases; contracted services and sewer operations to water utilities; and a Linebacker protection plan for public drinking water customers in Connecticut and Maine. Its water supply consists of groundwater from wells, surface water from watershed run-off and diversion, reclaimed water, and imported water purchased from the Santa Clara Valley Water District. The company offers water service to approximately 231,000 connections that serve approximately one million people residing in portions of the cities of San Jose and Cupertino, as well as in the cities of Campbell, Monte Sereno, Saratoga, and the Town of Los Gatos; and adjacent unincorporated territories in the County of Santa Clara in the State of California. In addition, it provides water service to approximately 140,000 connections, which serve approximately 456,000 people in 81 municipalities with a service area comprising approximately 269 square miles throughout Connecticut and Maine, as well as approximately 24,000 connections that serve approximately 70,000 people in a service area comprising approximately 266 square miles in the region between San Antonio and Austin, Texas; and approximately 3,000 wastewater connections in Southbury, Connecticut. Further, the company owns undeveloped land in California and Tennessee; and owns and operates commercial buildings and warehouse properties in Tennessee. The company was formerly known as SJW Corp. and changed its name to SJW Group in November 2016. SJW Group was incorporated in 1985 and is headquartered in San Jose, California.
ROIC (TTM)
3.1%
ROE (TTM)
6.6%
FCF Yield
1.36%
Based on trailing twelve-month data, SJW shows a free cash flow per share of N/A and a ROIC of 3.1%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 1.36% are important context metrics when evaluating SJW's stock valuation relative to peers.
The intrinsic value of SJW 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 SJW is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $54.86. 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 SJW Group: (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 SJW'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 SJW Group, 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. SJW's ROIC of 3.1% 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 SJW, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
