Consolidated Water Benefits From New Technology and Growing Business

Consolidated Water Co. Ltd. CWCO continues to benefit from the use of the most advanced technology to convert seawater to potable water to meet customer needs. The expansion of operations in areas with significant potable water requirements is enhancing the company's performance.However, this Zacks Rank #3 (Hold) company faces risks related to delays in the collection of accounts receivable and weather fluctuations.Factors Acting in Favor of CWCONearly 97% of the Earth’s water is in the ocean. To harness this resource, Consolidated Water utilizes Reverse Osmosis Technology, one of the most advanced technologies, to convert seawater to potable water at all water treatment plants it constructs and operates. This development will bode well for the company’s prospects, given its focus on the development of desalination plants.Consolidated Water operates 10 desalination water production plants with a capacity of 26.2 million gallons per day in four countries. It is looking for opportunities in new markets to further expand drinking water and wastewater services. The company is also working relentlessly to boost existing operations in the Cayman Islands and the Bahamas.CWCO aims to expand its operations in complementary service industries, which will complement its existing business operations. The company will pursue these opportunities either independently or through joint ventures, strategic alliances and acquisitions. It primarily targets businesses that operate advanced water-treatment plants for the government or government agencies, under medium or long-term contracts.Challenges Faced by CWCOConsolidated Water’s Bahamas subsidiary experiences substantial delays in the collection of its accounts receivable. CW-Bahamas’ accounts receivable balances (which include accrued interest) due from the WSC amounted to $25.5 million and $28.4 million as of March 31, 2025, and Dec. 31, 2024, respectively. Approximately 78% and 81% of the accounts receivable balances were delinquent as of those dates. The delay in collecting these accounts receivable has adversely impacted the liquidity of this subsidiary.The demand for water services fluctuates with weather conditions and the level of tourism. A reduction in tourism or greater-than-expected rainfall in the company’s service areas could adversely impact its results of operations and cash flows.CWCO’s Stock Price PerformanceIn the past three months, the stock has returned 26.8% against the industry’s decline of 0.3%. Image Source: Zacks Investment ResearchStocks to ConsiderSome better-ranked stocks from the same industry are Artesian Resources ARTNA, sporting a Zacks Rank #1 (Strong Buy) at present, and American Water Works AWK and California Water Service Group CWT, both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for ARTNA’s 2025 earnings per share (EPS) is pinned at $2.16, indicating year-over-year growth of 9.1%. The company delivered an average earnings surprise of 18.6% in the last four quarters. AWK’s long-term (three to five years) earnings growth rate is 7.4%. The Zacks Consensus Estimate for 2025 EPS is pinned at $5.71, indicating year-over-year growth of 5.9%.CWT’s long-term earnings growth rate is 8.78%. The company delivered an average earnings surprise of 57.9% in the past four quarters.  Higher. Faster. Sooner. Buy These Stocks NowA small number of stocks are primed for a breakout, and you have a chance to get in before they take off.At any given time, there are only 220 Zacks Rank #1 Strong Buys. On average, this list more than doubles the S&P 500. We’ve combed through the latest Strong Buys and selected 7 compelling companies likely to jump sooner and climb higher than any other stock you could buy this month.You'll learn everything you need to know about these exciting trades in our brand-new Special Report, 7 Best Stocks for the Next 30 Days.Download the report free now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report American Water Works Company, Inc. (AWK): Free Stock Analysis Report California Water Service Group (CWT): Free Stock Analysis Report Artesian Resources Corporation (ARTNA): Free Stock Analysis Report Consolidated Water Co. Ltd. (CWCO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks