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

FairStock Score: 61/100 — STEADY

Key Financials

AI Analysis

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

As a Buffett/Graham investor, I start with the business: SABESP is a regulated water and sewage utility serving São Paulo, Brazil. That can be a moat—customers need water, and duplication is impractical—but returns are set by regulators, not by free-market pricing power. In the latest filed quarter, 2026-Q2, the company reported revenue of $10.2B and net income of $1.5B, a 14.34% net margin. FairStock calculates a trailing P/E of 14.02 at the 2026-10-13 close of $6.45, a P/B of 2.59, and an EV/EBITDA of 4.03. FairStock's Graham Number is $11.55, implying a 44.16% margin of safety, which catches my eye. FairStock's ROE is 18.79%, but ROCE is only 7.77%, and debt-to-equity is 1.14, so the balance sheet is not pristine. More troubling: trailing free cash flow is -$8.2B and FCF yield is -32.6%; utilities are capital-intensive, but that is a heavy cash burn. FairStock's Piotroski F-Score is 6/9, and its Altman Z-Score of 0.48 suggests financial stress. The latest quarter showed a healthy net margin, but without more filed history I cannot confirm a durable growth trajectory. At the current price, the stock looks statistically cheap, yet the negative cash flow and regulatory risks demand a margin of safety. I would watch whether cash flow turns positive and debt comes down.

In plain English: Sabesp provides water and sewage services in São Paulo, Brazil. The business looks profitable and has grown, but it also uses a lot of cash and carries meaningful debt. Based on the numbers given, the share price looks inexpensive compared with the company's earnings and assets, though weak cash flow and regulatory risks are real.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data as of 2026-10-13 close · note generated 2026-10-15 · 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