Value
6.2/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 4.2 |
| P/S | 7.6 |
| EV/EBITDA | 2.0 |
| Fwd P/E | 5.6 |
| PEG | 8.9 |
- ▸Forward P/E: 23.0x
- ▸PEG: 0.69
CWCO · Why this verdict
Why Consolidated Water Co. (CWCO) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictBUY WAIT
Overall score5.5/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Consolidated Water combines a 3-of-4 earnings beat streak and meaningful analyst-implied upside with strong cash conversion and Piotroski quality, but a hard death-cross gate failure, declining revenue, and elevated leverage keep the engine's stance at reducing rather than adding to the position.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Consolidated Water shows a death-cross technical pattern but with MACD improving and RSI at 43, which the engine classifies as a recovery setup, backed by a 3-of-4 earnings beat streak. Chart pattern detection | The stock's momentum score recovers above the 5.5 threshold and the death-cross gate clears within 2 quarters. | →Stable |
| CounterThe death cross remains a hard-block gate failure today, and the 200-day moving-average slope is flat rather than turning up, meaning the recovery read has not yet been technically confirmed. | ||
Consolidated Water shows a 24% analyst-implied upside alongside a 3-of-4 earnings beat streak, and the engine's own risk/reward framework shows 24.2% upside versus just 5.0% downside. Bull case | Price appreciates toward the analyst target, narrowing the upside gap to under 10% within 12 months. | →Stable |
| CounterThe bear case flags weak growth and an 11% revenue decline, meaning the upside case may rely on multiple expansion rather than fundamental improvement. | ||
Consolidated Water converts 128% of net income into free cash flow and holds a strong Piotroski F-Score of 7/9, indicating solid balance-sheet quality despite declining revenue. Quality breakdown | FCF-to-net-income conversion stays above 100% and the Piotroski F-Score remains at 6 or higher over the next fiscal year. | →Stable |
| CounterAn 11% revenue decline combined with no competitive moat raises the risk that current strong cash conversion reflects a shrinking asset base rather than durable operating strength. | ||
A debt-to-equity ratio of 1.2 triggers a leverage penalty of -0.5 points in the engine's scoring, a moderate balance-sheet risk factor for a utility. Bear case | Debt-to-equity ratio stays at or below 1.3 over the next 2 fiscal quarters. | →Stable |
| CounterCombined with declining revenue of -11% and weak growth, elevated leverage increases the risk of the balance sheet becoming stretched if the top-line contraction continues. | ||
Consolidated Water shows a strong recent earnings history, with 3 beats in the last 4 quarters, alongside its dividend metrics, with the next earnings catalyst due in 37 days. Catalyst breakdown | The company beats consensus again at its next report, extending the beat streak. | ↓Deteriorating |
| CounterWeak underlying growth and an 11% revenue decline mean any earnings beat could stem from cost control rather than durable demand, limiting its signal value for a re-rating. | ||
Consolidated Water shows a death-cross technical pattern but with MACD improving and RSI at 43, which the engine classifies as a recovery setup, backed by a 3-of-4 earnings beat streak.
→StableChart pattern detection
- Expectation
- The stock's momentum score recovers above the 5.5 threshold and the death-cross gate clears within 2 quarters.
CounterThe death cross remains a hard-block gate failure today, and the 200-day moving-average slope is flat rather than turning up, meaning the recovery read has not yet been technically confirmed.
Consolidated Water shows a 24% analyst-implied upside alongside a 3-of-4 earnings beat streak, and the engine's own risk/reward framework shows 24.2% upside versus just 5.0% downside.
→StableBull case
- Expectation
- Price appreciates toward the analyst target, narrowing the upside gap to under 10% within 12 months.
CounterThe bear case flags weak growth and an 11% revenue decline, meaning the upside case may rely on multiple expansion rather than fundamental improvement.
Consolidated Water converts 128% of net income into free cash flow and holds a strong Piotroski F-Score of 7/9, indicating solid balance-sheet quality despite declining revenue.
→StableQuality breakdown
- Expectation
- FCF-to-net-income conversion stays above 100% and the Piotroski F-Score remains at 6 or higher over the next fiscal year.
CounterAn 11% revenue decline combined with no competitive moat raises the risk that current strong cash conversion reflects a shrinking asset base rather than durable operating strength.
A debt-to-equity ratio of 1.2 triggers a leverage penalty of -0.5 points in the engine's scoring, a moderate balance-sheet risk factor for a utility.
→StableBear case
- Expectation
- Debt-to-equity ratio stays at or below 1.3 over the next 2 fiscal quarters.
CounterCombined with declining revenue of -11% and weak growth, elevated leverage increases the risk of the balance sheet becoming stretched if the top-line contraction continues.
Consolidated Water shows a strong recent earnings history, with 3 beats in the last 4 quarters, alongside its dividend metrics, with the next earnings catalyst due in 37 days.
↓DeterioratingCatalyst breakdown
- Expectation
- The company beats consensus again at its next report, extending the beat streak.
CounterWeak underlying growth and an 11% revenue decline mean any earnings beat could stem from cost control rather than durable demand, limiting its signal value for a re-rating.
Per-dimension breakdown
Quality
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.5 |
| ROA | 2.5 |
| Gross margin | 3.1 |
| Op margin | 4.5 |
| Net margin | 6.3 |
| Current ratio | 7.1 |
| FCF quality | 9.7 |
| Moat | 5.4 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 142% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 8/9
Growth
5.3/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.0 |
| EPS growth | 8.7 |
- ▸Declining revenue: -2%
Momentum
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.8 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 6.0 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -2.0%/30d — confirmed downtrend
Sentiment
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.0 |
| Analyst rating | 5.0 |
| Price target | 9.1 |
- ▸LLM news sentiment: +0.40 (n=1)
- ▸Analyst upside: 38%
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
3.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.8 |
| quality rank | 1.1 |
| growth rank | 0.0 |
- ▸Conservative debt levels
Technical
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.8 |
| support resistance | 4.9 |
| 52w position | 6.1 |
Risk (lower is worse)
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.7 |
| days to cover | 3.3 |
| volatility | 4.9 |
| put call | 0.0 |
| beta | 9.9 |
| debt equity | 10.0 |
- ▸Elevated put/call: 3.00
- ▸Concentration risks: 2 MED (10-K Item 1A)
Catalyst
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 5.8 |
| news activity | 5.0 |
- ▸Strong earnings: 3B/1M
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more. | News modifier +2 (HOLD_IF_HOLDING → STRONG_BUY_WAIT).
Engine technical detail
verdict_path:
L4:PATH_F_HOLD|L3:NEWS_MOD=+2|ENTRY_STICKY:PRIOR_STILL_VIABLEPassed (6)
- ASYMMETRY:2.1>=1.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:87d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:4.2<4.5
- DEATH_CROSS:HARD_BLOCK
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
2.12
Upside
+17.2%
Downside
8.1%
Sizing output
STARTER
SetupRecovery — Death cross but MACD improving, RSI 62
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $0.5B<$5B
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: ASYMMETRY:2.1>=1.5. Top dim: Insider at 7.3; weakest: Peer rank at 3.2. No conviction either direction.
The strongest dimensions are Insider at 7.3, Sentiment at 6.9, and Value at 6.2; the weakest are Peer rank at 3.2, Momentum at 4.2, and Technical at 4.3. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of 2.12 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Death Cross Recovery Setup
Trip ifThe 200-day moving-average slope falls below 0% over the next 30 days, or the stock fails to reclaim the 200-day moving average within 2 quarters.
- P2Analyst Upside Valuation
Trip ifRevenue growth stays below -5% YoY for 2 more consecutive quarters, undermining the case for price appreciation toward the analyst target.
- P3Cash Conversion Quality Strength
Trip ifFCF-to-net-income conversion falls below 80% or the Piotroski F-Score drops below 5 at the next annual assessment.
- P4Leverage Balance Sheet Risk
Trip ifDebt-to-equity ratio rises above 1.5, or revenue growth stays below -10% YoY for 2 more consecutive quarters.
- P5Dividend Earnings Catalyst
Trip ifConsolidated Water misses consensus EPS estimates by more than 10% at its next earnings report.