Companhia de Saneamento Básico do Estado de São Paulo - SABESP Fundamental Analysis
Companhia de Saneamento Básico do Estado de São Paulo - SABESP Fundamental Analysis
Companhia de Saneamento Básico do Estado de São Paulo - SABESP (SBS) shows strong financial fundamentals with a PE ratio of 11.42, profit margin of 22.04%, and ROE of 20.23%. The company generates $37.5B in annual revenue with moderate year-over-year growth of 5.39%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 59.0/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze SBS's fundamental strength across five key dimensions:
Efficiency Score
WeakSBS struggles to generate sufficient returns from assets.
Valuation Score
ExcellentSBS trades at attractive valuation levels.
Growth Score
ModerateSBS shows steady but slowing expansion.
Financial Health Score
ModerateSBS shows balanced financial health with some risks.
Profitability Score
ExcellentSBS achieves industry-leading margins.
Key Financial Metrics
Is SBS Expensive or Cheap?
P/E Ratio
SBS trades at 11.42 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, SBS's PEG of -0.09 indicates potential undervaluation.
Price to Book
The market values Companhia de Saneamento Básico do Estado de São Paulo - SABESP at 2.26 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 3.17 times EBITDA. This is generally considered low.
How Well Does SBS Make Money?
Net Profit Margin
For every $100 in sales, Companhia de Saneamento Básico do Estado de São Paulo - SABESP keeps $22.04 as profit after all expenses.
Operating Margin
Core operations generate 32.36 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $20.23 in profit for every $100 of shareholder equity.
ROA
Companhia de Saneamento Básico do Estado de São Paulo - SABESP generates $7.25 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Companhia de Saneamento Básico do Estado de São Paulo - SABESP produces operating cash flow of $7.78B, showing steady but balanced cash generation.
Free Cash Flow
Companhia de Saneamento Básico do Estado de São Paulo - SABESP generates strong free cash flow of $3.85B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $1.13 in free cash annually.
FCF Yield
SBS converts 4.20% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
11.42
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-0.09
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.26
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.44
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.18
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.74
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.20
vs 25 benchmark
ROA
Return on assets percentage
0.07
vs 25 benchmark
ROCE
Return on capital employed
0.12
vs 25 benchmark
How SBS Stacks Against Its Sector Peers
| Metric | SBS Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 11.42 | 19.45 | Better (Cheaper) |
| ROE | 20.23% | 875.00% | Weak |
| Net Margin | 22.04% | 4119.00% | Weak |
| Debt/Equity | 1.18 | 19.93 | Strong (Low Leverage) |
| Current Ratio | 1.74 | 1.39 | Neutral |
| ROA | 7.25% | -4725.00% (disorted) | Weak |
SBS outperforms its industry in 2 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Companhia de Saneamento Básico do Estado de São Paulo - SABESP's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
113.90%
Industry Style: Defensive, Dividend, Income
High GrowthEPS CAGR
768.89%
Industry Style: Defensive, Dividend, Income
High GrowthFCF CAGR
68.19%
Industry Style: Defensive, Dividend, Income
High Growth