AES (AES) AI Stock Analysis

• Market Cap: $7.75B
• Dividend Yield: 6.4%
• Average Volume (3M): 17.49M
• Price to Earnings (P/E): 5.9
• Beta (1Y): 1.03
• Revenue Growth: -3.22%
• EPS Growth: 141.11%
• Country: US
• Employees: 9,100
• Sector: Utilities
• Sector Strength: 77
• Industry: Diversified Utilities
• EPS (TTM): 0.27
• Shares Outstanding: 711,922,800
• 10 Day Avg. Volume: 12,214,784
• 30 Day Avg. Volume: 17,493,830
• PEG Ratio: -0.28
• Price to Book (P/B): 2.28
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -2.27
• Enterprise Value/Market Cap: 4.74
• Enterprise Value/Revenue: 1.21
• Enterprise Value/Gross Profit: 17.21
• Enterprise Value/Ebitda: 4.53
• 1Y Price Target: $13.38
• Price Target Upside: 22.87% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

• Rating: 54 Neutral
• Price Target: $11.00 ▲(1.01%Upside)

AES's overall score reflects a challenging financial landscape with high leverage and negative cash flows. Valuation is attractive with a low P/E ratio and high dividend yield, but technical analysis indicates neutral market sentiment. The earnings call and corporate events add mixed signals, with strategic achievements countered by financial challenges.

Positive Factors

Asset Sales

The $450M monetization of a 17.5% stake in its captive insurer, AGIC, was a surprising and creative move that helps de-risk its 2025 asset sale target.

Financial Performance

Management reaffirmed all of financial targets for '25 and '27.

Negative Factors

Regulatory Risk

Macroeconomic trends including tariffs, and potential adverse changes to the IRA with an increasingly likely phase-out of tax credits are all negative data points looming over the sector and the stock.

Renewable Energy

Renewable PPA bookings of 443 MW came in below expectations.

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
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
12.12B	12.28B	12.67B	12.62B	11.14B	9.66B
	Gross Profit
2.13B	2.31B	2.50B	2.55B	2.71B	2.69B
	EBIT
1.84B	2.03B	2.25B	2.35B	2.57B	2.53B
	EBITDA
2.76B	3.67B	2.53B	3.40B	903.00M	3.60B
	Net Income Common Stockholders
1.22B	1.68B	249.00M	-546.00M	-409.00M	46.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.82B	1.60B	1.82B	2.10B	1.18B	1.42B
	Total Assets
48.62B	47.41B	44.80B	38.36B	32.96B	34.60B
	Total Debt
30.58B	29.02B	26.88B	23.50B	18.70B	19.88B
	Net Debt
28.82B	27.49B	25.45B	22.12B	17.76B	18.79B
	Total Liabilities
40.89B	38.76B	37.35B	33.86B	28.40B	29.88B
	Stockholders Equity
3.47B	3.64B	2.49B	2.44B	2.80B	2.63B
Cash Flow		Free Cash Flow
-3.49B	-4.64B	-4.69B	-1.84B	-214.00M	855.00M
	Operating Cash Flow
3.01B	2.75B	3.03B	2.71B	1.90B	2.75B
	Investing Cash Flow
-6.60B	-7.70B	-8.19B	-5.84B	-3.05B	-2.29B
	Financing Cash Flow
3.67B	4.96B	5.41B	3.76B	797.00M	-78.00M

AES Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 10.89
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 10.89 is above the 20-day moving average (MA) of 10.86, above the 50-day MA of 10.76, and below the 200-day MA of 13.20, indicating a neutral trend. The MACD of -0.15 indicates Negative momentum. The RSI at 53.70 is Neutral, neither overbought nor oversold. The STOCH value of 88.58 is Negative, 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
CIG	82 Outperform	$6.21B	4.17	26.38%	15.35%	-4.14%	13.02%
ELP	78 Outperform	$6.47B	12.63	9.22%	4.95%	-7.02%	17.33%
ELPC	77 Outperform	$6.47B	11.60	9.22%	4.90%	-7.02%	17.33%
SRE	72 Outperform	$50.12B	16.91	9.76%	3.26%	-0.39%	0.75%
BIP	64 Neutral	$21.84B	2,867.59	0.47%	4.98%	12.40%	-108.27%
Sector *	64 Neutral	$8.54B	10.30	4.24%	4.37%	4.14%	-13.04%
AES	54 Neutral	$7.75B	5.95	29.79%	6.40%	-3.22%	141.11%

AES Corporate Events

AES Approves 2025 Equity and Incentive Plan

On May 9, 2025, AES Corporation held its Annual Meeting of Stockholders, where several key proposals were approved, including the 2025 Equity and Incentive Compensation Plan. This plan authorizes the issuance of 14,000,000 shares of common stock and includes various performance and incentive awards for employees and directors, aiming to align their interests with company growth and shareholder value. Additionally, the meeting saw the election of eleven directors and the ratification of Ernst & Young LLP as the independent auditor for fiscal year 2025.

AES Reports Q1 2025 Financial Results with Net Loss

On May 1, 2025, AES Corporation announced its financial results for the first quarter of 2025, reporting a net loss of $73 million compared to a net income of $278 million in the same quarter of 2024. Despite the decrease in net income, AES reaffirmed its 2025 guidance and long-term growth targets, highlighting strategic accomplishments such as completing 643 MW of energy storage and solar projects, signing new PPAs, and achieving asset sale proceeds targets. The company also noted higher contributions from its Utilities and Renewables SBUs, offset by lower contributions from the Energy Infrastructure SBU due to prior year revenue factors.