Companhia de saneamento Basico Do Estado De Sao Paulo - Sabesp American Depositary Shares (Each repstg 250 Common Shares) (SBS)

FairStock Score: 69/100 — STEADY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I look for essential businesses with durable economics and a price that leaves room for error. Sabesp fits the first part: it provides water and sewage services in São Paulo, an essential regulated utility with high barriers to entry. The latest filed quarter — fiscal Q2 2026, the quarter labeled 2026-Q2 — showed revenue of $10.2B, net income of $1.5B, and a 14.34% margin. That is a real business, not a concept. Returns are mixed: FairStock’s calculations show ROE of 18.79% but ROCE of only 7.77%, and D/E of 1.14. The bigger red flag is financial health: trailing free cash flow is -$8.2B, FCF yield -32.6%, and Altman Z-score 0.48, while Piotroski is 6/9. Profit growth is -31.46% (period not specified in the data), even as revenue growth is 13.87% — a reminder that regulated utilities can earn revenue without converting it into profit or cash. On valuation, at the 2026-10-26 close of $4.73, FairStock calculates P/E 10.28, P/B 1.90, EV/EBITDA 4.03, and a Graham Number of $11.55, a 44.59% margin of safety. The stock sits near the low end of its 52-week range of $4.45–$35.79, with beta 0.07. So the price looks statistically cheap, but negative free cash flow and weak profit growth mean I would demand more evidence before calling it a margin-of-safety bargain.

In plain English: Sabesp supplies water and sewage services in São Paulo, Brazil. The business serves an essential need and earns good profits on the money shareholders have put in, but it has a lot of debt and is using more cash than it brings in. At the 2026-10-26 closing price of $4.73, the shares look inexpensive compared with the company’s profits and what the books say it is worth, though falling profits mean they are not clearly a bargain.

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Data as of 2026-10-26 close · note generated 2026-10-28 · model deepseek-flash

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer