Companhia de Saneamento Básico do Estado de São Paulo - SABESP(SBS)

$5.79▲0.16 (2.84%)

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Companhia de Saneamento Básico do Estado de São Paulo - SABESP(SBS)

NYSE

$5.79▲0.16 (2.84%)

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SBS(SBS)

SBS

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6/28/26

COMPANHIA DE SANEAMENTO BÁSICO DO ESTADO DE SÃO PAULO - SABESP (SBS)

Sunday

3:09 PM

Thesis: Companhia de Saneamento Básico do Estado de São Paulo - SABESP: the story is balanced — Tariff adjustment decisions by ARSESP - annual inflation pass-through (IPCA) plus productivity factors directly impact…

Revenue Outlook

Metric	FY2025	FY2026E	FY2027E
Revenue	$37.3B	$26.3B	$31.4B
Rev. Growth	+3.3%	-29.4%	+19.0%
EPS	$2.42	$2.18	$2.78
EPS Growth	-13.6%	-10.0%	+27.9%
P/E (fwd)	2.4×	2.7×	2.1×

★ Analysts see FY2027 revenue reaching $31.4B — +19.0% growth in a single year.

What Moves the Stock

1Tariff adjustment decisions by ARSESP - annual inflation pass-through (IPCA) plus productivity factors directly impact revenue trajectory
2Non-revenue water (NRW) reduction progress - every 1% reduction in water losses (currently ~27-30%) flows through at high incremental margins
3Brazilian real exchange rate volatility - ADR trades in USD while operations are BRL-denominated, creating FX translation effects
4Regulatory compliance with universal sewage treatment targets - concession requires 90% sewage collection and treatment by 2029, driving mandatory capex
5Privatization execution milestones - management changes, governance improvements, and operational efficiency gains post-state divestment
6Residential water and sewage services (~65-70% of revenue) - metered consumption with regulated tariffs
7Commercial and industrial water/sewage (~25-30%) - higher margin customers with larger consumption volumes
8Wholesale water supply and other services (~5%) - bulk water sales to neighboring municipalities

FY2025 Snapshot

Revenue: $37.3B
Rev. Growth: +3.3%
Gross Margin: 36.6%
Op. Margin: 32.2%
Net Margin: 22.2%
Net Income: $8.3B
NI Growth: -13.4%
EPS: $2.42
1Y Return: +45.1%

SBS Chart

My Notes

value and dividend - Post-privatization story attracts value investors seeking margin expansion, governance improvements…
Moderate sensitivity through two channels: (1) Valuation multiple compression when Brazilian real rates (Selic) or US Treasury yields rise…
Watch on earnings: Brazilian IPCA inflation rate - directly drives annual tariff adjustments and revenue growth, USD/BRL exchange rate (DEXBZUS) - impacts ADR valuation and USD-translated earnings for international investors, São Paulo state GDP growth and industrial production - influences commercial/industrial water demand.

One Sentence Summary:

Companhia de Saneamento Básico do Estado de São Paulo - SABESP: the story is balanced — tariff adjustment decisions by arsesp - annual inflation pass-through (ipca) plus productivity factors directly impact revenue trajectory.

Auto-composed from Stock Alarm intelligence, financial statements, and analyst estimates. Not investment advice.

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Metric

FY2025

FY2026E

FY2027E

P/E (fwd)

2.4×

2.7×

2.1×

What Moves the Stock

1Tariff adjustment decisions by ARSESP - annual inflation pass-through (IPCA) plus productivity factors directly impact revenue trajectory

2Non-revenue water (NRW) reduction progress - every 1% reduction in water losses (currently ~27-30%) flows through at high incremental margins

3Brazilian real exchange rate volatility - ADR trades in USD while operations are BRL-denominated, creating FX translation effects

4Regulatory compliance with universal sewage treatment targets - concession requires 90% sewage collection and treatment by 2029, driving mandatory capex

5Privatization execution milestones - management changes, governance improvements, and operational efficiency gains post-state divestment

6Residential water and sewage services (~65-70% of revenue) - metered consumption with regulated tariffs

7Commercial and industrial water/sewage (~25-30%) - higher margin customers with larger consumption volumes

8Wholesale water supply and other services (~5%) - bulk water sales to neighboring municipalities

My Notes

value and dividend - Post-privatization story attracts value investors seeking margin expansion, governance improvements…

Moderate sensitivity through two channels: (1) Valuation multiple compression when Brazilian real rates (Selic) or US Treasury yields rise…

Watch on earnings: Brazilian IPCA inflation rate - directly drives annual tariff adjustments and revenue growth, USD/BRL exchange rate (DEXBZUS) - impacts ADR valuation and USD-translated earnings for international investors, São Paulo state GDP growth and industrial production - influences commercial/industrial water demand.