AES (AES) AI Stock Analysis

• Market Cap: $9.63B
• Dividend Yield: 5.06%
• Average Volume (3M): 7.11M
• Price to Earnings (P/E): 8.2
• Beta (1Y): 0.88
• Revenue Growth: -1.55%
• EPS Growth: 12.83%
• Country: US
• Employees: 9,100
• Sector: Utilities
• Sector Strength: 65
• Industry: Diversified Utilities
• EPS (TTM): 0.75
• Shares Outstanding: 712,121,000
• 10 Day Avg. Volume: 7,588,712
• 30 Day Avg. Volume: 7,111,713
• PEG Ratio: <0.01
• Price to Book (P/B): 2.49
• Price to Sales (P/S): 0.74
• P/FCF Ratio: -1.96
• Enterprise Value/Market Cap: 4.61
• Enterprise Value/Revenue: 3.68
• Enterprise Value/Gross Profit: 21.70
• Enterprise Value/Ebitda: 11.60
• 1Y Price Target: $16.67
• Price Target Upside: 20.27% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10
• EPS Forecast (FY): 2.16
• Revenue Forecast (FY): $12.02B

• Rating: 65 Neutral
• Price Target: $15.00 ▲(8.23% Upside)

AES's overall stock score is driven by a strong earnings call that highlights growth in renewables and strategic progress, alongside an attractive valuation with a low P/E ratio and high dividend yield. However, financial performance concerns, including high leverage and negative free cash flow, weigh on the score. Technical analysis indicates a neutral trend, contributing moderately to the overall assessment.

Positive Factors

Renewable Energy Growth

Significant growth in renewables demonstrates AES's successful transition towards sustainable energy, enhancing its competitive position in the evolving energy market.

Strategic Partnerships and PPAs

The signing of new PPAs ensures stable, long-term revenue streams and strengthens AES's market presence, supporting sustained financial performance.

Robust Construction Pipeline

A strong construction pipeline indicates AES's capacity to expand its operational footprint, driving future growth and reinforcing its market leadership.

Negative Factors

High Leverage

High leverage poses risks to financial stability, potentially limiting AES's ability to invest in growth opportunities and manage economic downturns.

Negative Free Cash Flow

Negative free cash flow can strain AES's financial flexibility, affecting its ability to fund operations and invest in strategic initiatives.

Declining Profit Margins

Declining profit margins indicate potential cost management issues, which could impact AES's long-term profitability and competitive edge.

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 generates revenue primarily through the sale of electricity from its power generation facilities. The company operates a mix of renewable energy sources, such as wind and solar, alongside traditional fossil fuel plants, allowing it to serve various markets and adapt to changing energy demands. Key revenue streams include long-term power purchase agreements (PPAs) with utilities and other entities, which provide stable cash flows. Additionally, AES benefits from energy trading and ancillary services, which enhance its revenue potential. Strategic partnerships with governments and other energy companies further bolster its earnings by expanding its operational footprint and facilitating renewable energy projects. The company also pursues opportunities in energy storage and technology solutions, contributing to its growth in the evolving energy landscape.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	12.09B	12.28B	12.68B	12.62B	11.14B	9.66B
Gross Profit	2.05B	2.32B	2.52B	2.55B	2.71B	2.69B
EBITDA	3.83B	3.67B	2.53B	1.94B	818.00M	2.53B
Net Income	1.14B	1.69B	242.00M	-546.00M	-413.00M	43.00M
Balance Sheet
Total Assets	50.78B	47.41B	44.80B	38.36B	32.96B	34.60B
Cash, Cash Equivalents and Short-Term Investments	1.82B	1.60B	1.82B	2.10B	1.18B	1.42B
Total Debt	30.85B	29.02B	26.88B	23.50B	18.70B	19.88B
Total Liabilities	40.25B	39.70B	38.81B	33.86B	28.40B	29.88B
Stockholders Equity	3.87B	3.64B	2.49B	2.44B	2.80B	2.63B
Cash Flow
Free Cash Flow	-2.21B	-4.64B	-4.69B	-1.84B	-214.00M	855.00M
Operating Cash Flow	3.91B	2.75B	3.03B	2.71B	1.90B	2.75B
Investing Cash Flow	-4.28B	-6.23B	-6.28B	-5.70B	-3.00B	-2.00B
Financing Cash Flow	83.00M	3.49B	3.49B	3.62B	741.00M	-372.00M

AES Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 13.86
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• 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 Positive. The current price of 13.86 is above the 20-day moving average (MA) of 13.83, below the 50-day MA of 13.97, and above the 200-day MA of 12.32, indicating a neutral trend. The MACD of -0.06 indicates Positive momentum. The RSI at 51.01 is Neutral, neither overbought nor oversold. The STOCH value of 41.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AES.

AES Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ELPC	75 Outperform	$7.05B	18.50	8.00%	5.43%	1.96%	-35.00%
ELP	75 Outperform	$7.05B	18.70	8.00%	5.35%	1.96%	-35.00%
CIG	70 Outperform	$6.19B	8.05	13.35%	12.98%	-0.38%	-53.94%
BIP	69 Neutral	$16.11B	54.72	6.28%	4.92%	8.14%	―
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
AES	65 Neutral	$9.63B	8.24	23.02%	5.06%	-1.55%	12.83%
SRE	61 Neutral	$56.74B	26.77	7.10%	2.93%	9.07%	-28.58%

AES Corporate Events

AES Reports Strong Q3 2025 Financial Results

On November 4, 2025, AES Corporation announced its financial results for the third quarter of 2025, reporting significant increases in net income and adjusted EBITDA compared to the previous year. The company reaffirmed its 2025 financial guidance and long-term growth targets, highlighting strategic accomplishments such as the addition of 3.2 GW of new projects and a backlog of 11.1 GW in signed PPAs. AES also noted progress in its US utilities sector with settlements and filings that support future growth. The company’s strong performance and strategic initiatives indicate continued profitable growth and a solid position in the renewable energy market.