AES (AES) AI Stock Analysis

• Market Cap: $7.33B
• Dividend Yield: 6.73%
• Average Volume (3M): 14.83M
• Price to Earnings (P/E): 4.4
• Beta (1Y): 0.93
• Revenue Growth: -3.14%
• EPS Growth: 563.59%
• Country: US
• Employees: 9,100
• Sector: Utilities
• Sector Strength: 90
• Industry: Diversified Utilities
• EPS (TTM): 2.37
• Shares Outstanding: 711,900,600
• 10 Day Avg. Volume: 15,021,743
• 30 Day Avg. Volume: 14,829,547
• PEG Ratio: 0.00773
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.76
• Price to Cash Flow (P/CF): 2.10
• P/FCF Ratio: 1.60
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $15.11
• Price Target Upside: 46.70% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

AES is positioned with a moderate overall score reflecting a combination of strengths and challenges. Financial performance shows improved profitability, but issues with leverage and cash flow remain. Technical analysis indicates some short-term strength, while valuation metrics are favorable, suggesting the stock is potentially undervalued. Positive guidance from the earnings call supports future growth prospects, particularly in renewables, but stock price underperformance and weather-related impacts are notable risks.

Positive Factors

Cost Savings

Management came with a thoughtful, credible plan to manage a challenging set of near-term circumstances, boosting cash flow and EBITDA by cutting costs, prioritizing higher margin projects, and keeping some coal plants online for longer.

Financial Performance

Management presented a thoughtful, credible plan to manage significant policy uncertainty and high cost of equity capital.

Negative Factors

Debt and Growth

Despite an 11% cut in growth capex and extended operations of cash-rich coal plants, net debt estimates increased by $3.7B on average.

Investor Sentiment

Investor sentiment has been bearish with uncertainty of tax credits, asset sales, and coal asset retirements weighing on the adjusted EBITDA expectations and the dividend.

AES Business Overview & Revenue Model

Company Description

The AES Corporation operates as a diversified power generation and utility company. It owns and/or operates power plants to generate and sell power to customers, such as utilities, industrial users, and other intermediaries. The company also owns and/or operates utilities to generate or purchase, distribute, transmit, and sell electricity to end-user customers in the residential, commercial, industrial, and governmental sectors; and generates and sells electricity on the wholesale market. It uses a range of fuels and technologies to generate electricity, including coal, gas, hydro, wind, solar, and biomass; and renewables, such as energy storage and landfill gas. The company owns and/or operates a generation portfolio of approximately 31,459 megawatts. It has operations in the United States, Puerto Rico, El Salvador, Chile, Colombia, Argentina, Brazil, Mexico, Central America, the Caribbean, Europe, and Asia. The company was formerly known as Applied Energy Services, Inc. and changed its name to The AES Corporation in April 2000. The AES Corporation was incorporated in 1981 and is headquartered in Arlington, Virginia.

How the Company Makes Money

AES Corporation makes money primarily through the generation and sale of electricity. The company's key revenue streams include its regulated utilities and the sale of power through long-term contracts, power purchase agreements (PPAs), and wholesale markets. AES operates power plants and sells electricity to residential, commercial, and industrial customers. The company also generates revenue from renewable energy projects, including wind, solar, and battery storage, which are often supported by government incentives and contracts with utility companies. Significant partnerships with other energy companies and investments in energy infrastructure assets also contribute to AES's earnings by enhancing its market reach and operational efficiency.

AES Financial Statement Overview

Summary

AES shows mixed financial performance with notable strengths in profitability and ROE improvement. However, declining revenue, high leverage, and negative free cash flow present significant concerns. The company needs to manage its capital expenditures and leverage to ensure sustainable growth and stability.

Income Statement

The company's revenue has shown a declining trend recently, with a 3.08% decrease from 2023 to 2024. Gross profit margin is high at 100% for 2024, indicating effective cost management relative to revenue, but this is likely due to misclassification of data. The net profit margin improved significantly from 1.97% in 2023 to 6.92% in 2024, showcasing improved profitability. However, the EBIT and EBITDA margins have fallen, pointing to operational challenges.

Balance Sheet

The debt-to-equity ratio is high at 1.70 in 2024, indicating significant leverage, which can pose financial risks. The equity ratio is relatively stable at 34.23%, suggesting a moderate reliance on equity financing. Return on equity improved to 23.30% in 2024, demonstrating effective use of equity to generate profits, though it fluctuates due to varying net income.

Cash Flow

The company experienced negative free cash flow, worsening from -$469M in 2023 to -$464M in 2024, indicating substantial capital expenditures surpassing operating cash flow. The operating cash flow to net income ratio improved to 3.24 in 2024, suggesting better cash generation relative to net income. However, the cash flow situation remains challenging with high capital expenditure needs.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
12.28B	12.67B	12.62B	11.14B	9.66B
	Gross Profit
2.31B	2.50B	2.55B	2.71B	2.69B
	EBIT
705.00M	2.25B	2.35B	2.57B	2.53B
	EBITDA
3.64B	2.53B	3.40B	903.00M	3.60B
	Net Income Common Stockholders
849.00M	249.00M	-546.00M	-409.00M	46.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
265.00M	1.82B	2.10B	1.18B	1.42B
	Total Assets
10.64B	44.80B	38.36B	32.96B	34.60B
	Total Debt
6.20B	26.88B	23.50B	18.70B	19.88B
	Net Debt
5.94B	25.45B	22.12B	17.76B	18.79B
	Total Liabilities
5.58B	37.35B	33.86B	28.40B	29.88B
	Stockholders Equity
3.64B	2.49B	2.44B	2.80B	2.63B
Cash Flow		Free Cash Flow
-4.64B	-4.69B	-1.84B	-214.00M	855.00M
	Operating Cash Flow
2.75B	3.03B	2.71B	1.90B	2.75B
	Investing Cash Flow
-7.70B	-8.19B	-5.84B	-3.05B	-2.29B
	Financing Cash Flow
4.96B	5.41B	3.76B	797.00M	-78.00M

AES Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 10.30
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AES, the sentiment is Negative. The current price of 10.3 is below the 20-day moving average (MA) of 12.03, below the 50-day MA of 11.35, and below the 200-day MA of 14.40, indicating a bearish trend. The MACD of 0.33 indicates Positive momentum. The RSI at 55.32 is Neutral, neither overbought nor oversold. The STOCH value of 22.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AES.

AES Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CIG	80 Outperform	$5.61B	3.68	28.91%	11.26%	3.39%	46.79%
ELP	77 Outperform	$5.20B	2.29	9.47%	3.02%	-4.45%	―
ELPC	77 Outperform	$5.20B	9.31	9.47%	3.08%	-4.45%	9.86%
Sector *	65 Neutral	$11.90B	15.77	6.20%	4.52%	5.53%	-8.93%
SRE	64 Neutral	$44.53B	15.47	9.55%	3.67%	-18.00%	-7.54%
AES	59 Neutral	$7.33B	4.36	39.65%	6.73%	-3.14%	563.59%
BIP	54 Neutral	$18.42B	2,616.67	0.96%	5.82%	17.33%	-92.62%

AES Corporate Events

AES Reports Strong 2024 Financial Results and Growth Outlook

On February 28, 2025, AES Corporation announced its financial results for the year ending December 31, 2024, highlighting significant achievements in strategic and financial goals. The company reported a net income of $698 million, a substantial increase from the previous year’s loss, driven by contributions from renewables projects and favorable currency gains. AES achieved strategic milestones by signing 6.8 GW of new contracts, including 4.4 GW of renewables under long-term PPAs, and completed 3.0 GW of renewable projects. The company also initiated guidance for 2025, expecting continued growth in renewables and reaffirming long-term growth targets. AES’s strategic focus on clean energy and efficiency positions it well to meet growing demands from AI data centers and manufacturing plants, while its de-risked growth plan through 2027 ensures stability and continued operational optimization.