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ZYBERNO

Stock Report

Updated Aug 31, 2026

H2O AMERICA (HTO)

Utilities • NASDAQ

$63.55

Professional Investment Analysis

ZYBERNO SCORE →

Is it a great business? Is it getting better?

35.0/100

WEAK BUSINESS

H2O AMERICA (HTO) scores 35/100 — weak fundamentals with mixed indicators requiring careful analysis before acting.

📊 How is the Zyberno Score calculated? +

The Zyberno Score answers one question: "Is this a quality business worth owning?" It's a 0-100 investment grade that evaluates business fundamentals across four critical dimensions, based on principles from Warren Buffett, Benjamin Graham, Peter Lynch, and Charlie Munger.

The 4 Core Categories (25 points each):

1. PROFITABILITY (25 pts)

Metrics: ROE, ROIC, Net Margin, Operating Margin
Thresholds: ROE >20% excellent • ROIC >20% excellent • Net Margin >20% excellent • Operating Margin >25% excellent

2. FINANCIAL STRENGTH (25 pts)

Metrics: Debt-to-Equity, Current Ratio, Interest Coverage, Altman Z-Score
Thresholds: D/E <0.3 excellent • Current Ratio >2.5 excellent • Interest Coverage >10x excellent • Altman Z >3.0 safe

3. CASH FLOW QUALITY (25 pts)

Metrics: Free Cash Flow, OCF vs Net Income, FCF Margin
Thresholds: Positive & growing FCF excellent • OCF/NI >1.2x excellent (cash earnings exceed accounting)

4. GROWTH & CONSISTENCY (25 pts)

Metrics: Revenue Growth, Net Income Growth, FCF Growth, Piotroski F-Score
Thresholds: Growth via log-linear regression • Piotroski 8-9 excellent, 6-7 good

Score Interpretation:

75-100

GREAT BUSINESS

65-74

GOOD BUSINESS

50-64

AVERAGE BUSINESS

30-49

WEAK BUSINESS

0-29

POOR BUSINESS

→ View full HTO quality analysis & detailed breakdown

VALUATION SIGNAL

MARGIN OF SAFETY

Is this stock cheap or expensive relative to what the business has historically generated for owners?

Margin of Safety unavailable — insufficient data for the owner-earnings DCF.

BRINA GAP ↗

Is the market underestimating or overestimating what this business is capable of going forward?

-15.0%

Market Overestimates

💰 How is Margin of Safety calculated? +

Margin of Safety measures how much discount or premium you're paying relative to a stock's intrinsic value. It's Benjamin Graham's core principle: the larger the margin, the lower your downside risk.

Formula: (Intrinsic Value − Current Price) ÷ Intrinsic Value × 100%

How We Calculate Intrinsic Value (DCF Method):

Step 1: Calculate current Owner Earnings (OCF − Maintenance CapEx)

Step 2: Calculate company-specific growth rate using log-linear regression on 16 quarters of Owner Earnings

Step 3: Project 10 years forward using the calculated growth rate

Step 4: Discount each year's cash flow to present value using 10% discount rate

Step 5: Calculate terminal value using 3% perpetual growth rate

Step 6: Sum all discounted cash flows = Intrinsic Value

What The Percentages Mean:

+50% or more

EXCELLENT — Very undervalued

+25% to +50%

GOOD — Attractive discount

0% to +25%

FAIR — Reasonable value

0% to -25%

CAUTION — Slight premium

-25% or worse

POOR — Overvalued

"Price is what you pay, value is what you get." — Warren Buffett

→ View full HTO valuation analysis · → View full HTO Brina Gap analysis

📈 How is Brina Gap calculated? +

Brina Gap measures the difference between the growth a business can fundamentally sustain and the growth the market is already pricing in.

Formula: Fundamental Growth Rate − Market-Implied Growth Rate

The Two Components:

Fundamental Growth Rate = ROIC × Reinvestment Rate

What the business can sustainably grow at based on how much it reinvests and what return it earns on that capital. Grounded in historical financials.

Market-Implied Growth Rate = Reverse DCF

The growth rate the current Enterprise Value implicitly assumes. Calculated by back-solving a 10-year DCF model (10% WACC, 3% terminal growth) until the present value of projected cash flows equals EV.

What The Gap Means:

Gap > +5% Market Underestimates — potential upside

+2% to +5% Slight Underestimate

-2% to +2% Fairly Priced — market consensus matches fundamentals

-5% to -2% Slight Overestimate

Gap < -5% Market Overestimates — price embeds optimism fundamentals don't support

A positive gap (market underestimates) combined with a positive Margin of Safety is the strongest combined signal — the business is both cheap historically and forward economics are stronger than the price suggests.

Critical Financial Health Indicators

Return on Equity (Profitability):POOR (6.6%)

Debt-to-Equity (Solvency Risk):AVERAGE (0.86x)

Operating Margin (Operational Efficiency):GOOD (21.9%)

Return on Capital (Capital Efficiency):CRITICAL (4.3%)

📊 Valuation Trilogy

Three interconnected metrics for complete valuation analysis

Click any metric for full methodology and detailed analysis

Zyberno's Verdict

H2O AMERICA (HTO) stock report — Zyberno Score 35/100 (WEAK BUSINESS). Full financial analysis on Zyberno.

According to Zyberno's DCF model, H2O AMERICA (HTO) shows a Brina Gap of -15.0%, which weakens the case: based on the company's ROIC (4.3%) and reinvestment rate (-79.3%), the business can fundamentally grow at -3.4% — but the current enterprise value implies the market expects 11.6%.

DIVISION I: EXECUTIVE SUMMARY

A. Market Valuation

Market Price & Capitalization (2)

Current Price:63.55

Market Cap:$2.41B

Valuation Multiples (4)

P/E Ratio:

21.76x

📊 Click to view full HTO P/E analysis →

P/B Ratio:1.31x

P/S Ratio:2.95x

Peg Ratio:-999.00x

Enterprise Metrics (2)

Enterprise Value:$4.15B

Ev Ebitda Ratio:13.66x

Price Action & Momentum (3)

12-1 Momentum:

+35.7% (64th pctile)

📈 Click to view full HTO Momentum analysis →

Momentum Percentile:64 / 100

% of 52-Week High:94.7%

B. Profitability Assessment

Return Metrics (7)

ROE:

6.6%

📊 Click to view full HTO ROE analysis →

ROA:2.1%

Roic:

4.3%

📊 Click to view full HTO ROIC analysis →

Reinvestment Rate:-79.3%

Fundamental Growth Rate (g):-3.4%

Market-Implied Growth Rate:11.6%

Brina Gap:

-15.0%

☷ Click to view full HTO Brina Gap analysis →

Margin Analysis (3)

Operating Margin Ttm:21.9%

Net Margin Ttm:12.9%

Ebitda Margin:37.2%

TTM Performance (2)

Operating Margin Ttm:21.9%

Net Margin Ttm:12.9%

Yield Metrics (2)

Earnings Yield:$4.59

Dividend Yield:2.5%

C. Log-Linear Regression Growth Trends

Earnings Surprise (SUE) (3)

Earnings Surprise (SUE):

-0.23

📊 Click to view full HTO Earnings Surprise analysis →

EPS Surprise vs Expected:-10.2%

Latest Earnings Filed:2026-04-29

Revenue Growth (Linear) (1)

Revenue Growth Rate (Linear):7.8%

Earnings Growth (Linear) (1)

Net Income Growth Rate (Linear):7.1%

Cash Flow Growth (Linear) (1)

Operating Cash Flow Growth Rate (Linear):9.2%

Operating Growth (Linear) (1)

Operating Income Growth Rate (Linear):7.8%

D. Financial Stability

Liquidity Ratios (3)

Current Ratio:2.02x

Quick Ratio:2.02x

Cash Ratio:0.96x

Leverage Analysis (3)

Debt To Equity Ttm:0.86x

Debt-to-Equity Ratio:0.86x

Debt To Ebitda:6.23x

Coverage Ratios (2)

Interest Coverage Ratio:2.43x

Times Interest Earned:2.43

Capital Structure (4)

Working Capital:163,366,000.00

Cash And Cash Equivalents:153,008,000.00

Long Term Debt:$1.87B

Net Debt:$1.74B

DIVISION II: FINANCIAL STATEMENTS ANALYSIS

A. Income Statement Analysis

Revenue Components (2)

Revenue TTM: $816.28M

Linear Growth: 7.8%

📊 Click to view full HTO Revenue analysis & methodology →

Cost Of Revenue Ttm:$0.00

Profitability Breakdown (2)

$0.00

Operating income TTM: $179.06M

Linear Growth: 7.8%

📊 Click to view full HTO Operating Income analysis & methodology →

Bottom Line Performance (3)

Net income TTM: $105.04M

Linear Growth: 7.1%

📊 Click to view full HTO Net Income analysis & methodology →

Income Before Tax:$117.32M

Ebitda Ttm:303,682,000.00

Operating Expenses (5)

Operating Expenses:0.00

R And D Expense:0.00

Sga Expense:128,045,000.00

Income Tax Expense:$20.42M

Interest Expense:73,141,000.00

Expense Ratios (3)

R And D To Revenue Percentage:0.0%

Sga To Revenue Percentage:69.9%

Ebitda Margin:37.2%

B. Balance Sheet Analysis

Asset Composition (5)

Total Assets:$5.35B

Current Assets:$323.41M

Ppe Net:2,062,000.00

Goodwill:640,311,000.00

Intangible Assets:$0.00

Liability Structure (4)

Total Liabilities:3,519,222,000.00

Current Liabilities:160,048,000.00

Long Term Debt:$1.87B

Short Term Debt:$26.09M

Equity & Capital (3)

Equity:$1.83B

Retained Earnings:$584.17M

Common Stock:70,000,000.00

Working Capital Items (3)

Accounts Receivable:62,069,000.00

Inventory:0.00

Accounts Payable:62,880,000.00

Special Items (2)

Contract Liabilities:0.00

Stock Based Compensation:1,212,000.00

C. Cash Flow Analysis

Operating Activities (2)

Operating cash flow TTM: $245.33M

Linear Growth: 9.2%

$0.00

Investment Activities (1)

Investing Cash Flow:-$92.93M

Financing Activities (3)

Financing Cash Flow:$181.55M

Dividends Paid Ttm:60,415,000.00

Stock Repurchase:0.00

Capital Transactions (3)

Common Stock Issuance:288,601,000.00

Long Term Debt Issuance:$214.00K

Long Term Debt Repayments:$16.26M

Non-Cash Items (1)

Depreciation Amortization Ttm:124,625,000.00

DIVISION III: OPERATIONAL METRICS

A. Per Share Analysis

Earnings Per Share (3)

EPS (Basic TTM):2.94

Eps diluted TTM: $2.92

Linear Growth: 1.4%

📊 Click to view full HTO EPS analysis & methodology →

Earnings Per Share Ttm:$2.77

Revenue & Cash Per Share (2)

Sales Per Share Ttm:21.52

Operating Cash Flow Per Share:$6.45

Book Value & Capital (2)

Book Value Per Share:$48.35

Cash Per Share:4.03

Dividend Policy (1)

Dividend Payout Ratio:59.48x

B. Operational Efficiency

Asset Utilization (2)

Asset Turnover Ttm:0.16x

Working Capital Turnover Ttm:5.00x

Receivables Management (2)

Receivables Turnover Ttm:13.15x

Days Sales Outstanding Ttm:27.75

Inventory Management (2)

Inventory Turnover Ttm:-999.00x

Days Inventory Outstanding Ttm:-999.00

Payables & Cash Cycle (2)

Days Payable Outstanding:28.12

Cash Conversion Cycle:-999.36

C. Quality & Risk Metrics

Financial Quality Scores (2)

Financial Strength Score:40.00

Quality Score:85.00

Market Metrics (2)

Beta:0.00x

Volatility Category:unknown

DIVISION IV: INVESTMENT ANALYSIS

A. Value Investment Framework

Damodaran Growth Analysis (4)

Reinvestment Rate:-79.3%

Fundamental Growth Rate (g):-3.4%

Market-Implied Growth Rate:11.6%

Brina Gap:

-15.0%

☷ Click to view full HTO Brina Gap analysis →

B. Log-Linear Regression Growth Analysis

Growth Rates (Log-Linear Regression) (3)

Revenue Growth Rate (Linear):7.8%

Net Income Growth Rate (Linear):7.1%

Operating Income Growth Rate (Linear):7.8%

Cash Flow Growth Rates (1)

Operating Cash Flow Growth Rate (Linear):9.2%

Other Growth Rates (1)

Book Value Growth Rate (Linear):12.5%

C. Company Profile & Context

Corporate Information (6)

Symbol:HTO

Company Name:H2O AMERICA

Sector:Utilities

Industry:Water Supply

Exchange:NASDAQ

Country:United States

Market Classification (3)

Market Cap Category:N/A

Price Category:high

Volume Category:N/A

Share Structure (3)

Shares Outstanding:37.93M

Shares Outstanding Basic:37.93M

Shares Outstanding Diluted:38.55M

Data Processing Info (3)

Processing Version:v3.0

Last Updated:2026-08-31 02:42:29 UTC

Data Timestamp:2026-08-31T02:42:29.882737