The girls were walking in the Seascape Village neighborhood, near Seascape Boulevard and Racquet Landing Road, when a man in a black Toyota sedan drove past them slowly while masturbating, sheriff's officials said.
The victims were able to get to a safe location and call 911.
The suspect was described as a white man in his late 20s with brown hair and a short beard. He was wearing a black T-shirt, according to the sheriff's office.
Investigators worked with the victims to create a sketch of the suspect.
Similar indecent exposure cases have been reported to the Santa Cruz Sheriff's Office and Watsonville police. Those agencies are working together to see if the incidents are related.
Anyone with information about the incidents is asked to contact the Santa Cruz Sheriff's Office at (831) 471-1121.