Allete (ALE) AI Stock Analysis

• Market Cap: N/A
• Dividend Yield: 4.26%
• Average Volume (3M): N/A
• Price to Earnings (P/E): ―
• Beta (1Y): N/A
• Revenue Growth: -4.30%
• EPS Growth: -8.49%
• Country: US
• Employees: N/A
• Sector: Utilities
• Sector Strength: 65
• Industry: N/A
• EPS (TTM): 0.46
• Shares Outstanding: N/A
• 10 Day Avg. Volume: N/A
• 30 Day Avg. Volume: N/A
• PEG Ratio: -0.75
• Price to Book (P/B): 1.31
• Price to Sales (P/S): 2.44
• P/FCF Ratio: 36.58
• Enterprise Value/Market Cap: 10.00T>
• Enterprise Value/Revenue: 4.34
• Enterprise Value/Gross Profit: 15.65
• Enterprise Value/Ebitda: 13.73
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 68 Neutral
• Price Target: $74.00 ▲(8.98% Upside)

Allete's overall stock score reflects a balance of strengths and challenges. The most significant factor is the positive impact of the approved acquisition, which promises strategic growth and alignment with clean energy goals. Technical analysis supports a bullish trend, while valuation metrics indicate fair pricing with a strong dividend yield. However, financial performance shows areas needing improvement, particularly in revenue growth and cash flow management.

Positive Factors

Strategic Acquisition

The acquisition enhances Allete's investment capabilities in regional transmission infrastructure and renewable energy, aligning with clean energy goals and providing significant benefits to customers and the regional economy.

Renewable Energy Focus

Allete's focus on renewable energy projects positions it well for long-term growth in a sector with increasing demand for sustainable energy solutions, aligning with global environmental goals.

Stable Balance Sheet

A stable balance sheet with a manageable debt-to-equity ratio provides Allete with financial flexibility to invest in growth opportunities and withstand economic fluctuations.

Negative Factors

Declining Revenue Growth

Negative revenue growth indicates challenges in expanding market reach and could impact long-term profitability if not addressed through strategic initiatives.

Negative Free Cash Flow

Negative free cash flow can constrain Allete's ability to invest in new projects and meet financial obligations, potentially impacting its long-term growth and stability.

Profitability Margin Pressure

Decreasing profitability margins suggest operational inefficiencies or increased costs, which could erode shareholder value if not managed effectively.

Allete Business Overview & Revenue Model

Company Description

Allete, Inc. (ALE) is a diversified energy company based in Duluth, Minnesota, primarily involved in the generation, transmission, and distribution of electricity. The company operates through its subsidiaries, including Minnesota Power, which serves customers in northern Minnesota, and other ventures in renewable energy and energy management. Allete is also engaged in various renewable energy projects, focusing on wind and solar power, and aims to provide sustainable energy solutions to its customers.

How the Company Makes Money

Allete generates revenue primarily through the sale of electricity to residential, commercial, and industrial customers. The company's revenue model is built on regulated utility operations, where it earns returns on investments in infrastructure and energy generation. Key revenue streams include electric utility sales, which account for the majority of its earnings, and renewable energy projects that contribute through power purchase agreements and incentives. Additionally, Allete benefits from partnerships with governmental agencies and other organizations focused on environmental sustainability, which support its renewable energy initiatives and enhance its financial performance.

Allete Financial Statement Overview

Summary

Allete's financial statements present a mixed picture. The company maintains a strong gross profit margin and a stable balance sheet, but declining revenue growth and profitability margins are areas of concern. The negative free cash flow and increasing debt levels suggest potential liquidity and leverage risks. Overall, Allete needs to focus on improving operational efficiency and cash flow management to enhance its financial health.

Income Statement

Allete's income statement shows a mixed performance. The TTM (Trailing-Twelve-Months) gross profit margin of 38.73% is strong, indicating efficient cost management. However, the net profit margin has slightly decreased to 11.04% from 11.72% in the previous year, reflecting some pressure on profitability. Revenue growth has been negative recently, with a decline of 2.10% in the TTM period, which is concerning. EBIT and EBITDA margins have also decreased, suggesting challenges in operational efficiency.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.78 in the TTM period, which is manageable for a utility company. Return on equity has slightly decreased to 5.80%, indicating a moderate return on shareholders' investments. The equity ratio remains healthy, suggesting a solid capital structure. However, the increase in total debt over the years could pose a risk if not managed carefully.

Cash Flow

Cash flow analysis reveals some challenges. The operating cash flow to net income ratio of 0.83 in the TTM period indicates adequate cash generation relative to net income. However, the free cash flow is negative, and the free cash flow to net income ratio is -0.94, highlighting potential liquidity issues. The significant growth in free cash flow from the previous period is a positive sign, but the overall cash flow position needs improvement.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.50B	1.53B	1.88B	1.57B	1.42B	1.17B
Gross Profit	416.20M	497.00M	489.90M	446.80M	453.50M	424.80M
EBITDA	474.50M	486.30M	539.40M	417.50M	411.70M	405.50M
Net Income	165.70M	179.30M	247.10M	189.30M	169.20M	174.20M
Balance Sheet
Total Assets	7.15B	7.39B	7.37B	7.61B	7.17B	6.81B
Cash, Cash Equivalents and Short-Term Investments	78.70M	52.70M	77.00M	37.90M	45.40M	45.10M
Total Debt	2.24B	1.81B	1.80B	1.93B	1.99B	1.82B
Total Liabilities	3.81B	4.00B	3.96B	4.26B	4.23B	4.01B
Stockholders Equity	2.85B	2.85B	2.81B	2.69B	2.41B	2.29B
Cash Flow
Free Cash Flow	-322.10M	102.20M	314.10M	800.00K	-209.80M	-418.00M
Operating Cash Flow	342.80M	457.10M	585.30M	221.30M	263.50M	299.80M
Investing Cash Flow	-677.10M	-340.70M	-283.60M	-384.00M	-485.20M	-812.80M
Financing Cash Flow	304.50M	-140.60M	-262.50M	155.20M	204.20M	485.70M

Allete Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 67.90
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALE, the sentiment is Positive. The current price of 67.9 is above the 20-day moving average (MA) of 67.66, above the 50-day MA of 67.49, and above the 200-day MA of 65.11, indicating a bullish trend. The MACD of 0.16 indicates Negative momentum. The RSI at 66.98 is Neutral, neither overbought nor oversold. The STOCH value of 84.21 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ALE.

Allete Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AVA	77 Outperform	$3.12B	16.32	7.31%	5.10%	2.14%	-6.51%
OTTR	77 Outperform	$3.47B	12.48	16.10%	2.54%	-3.18%	-8.62%
NWE	74 Outperform	$3.93B	18.25	7.62%	4.09%	4.90%	-4.42%
BKH	74 Outperform	$5.20B	17.44	7.90%	3.91%	7.03%	6.64%
ALE	68 Neutral	―	―	5.83%	4.26%	-4.30%	-8.49%
MGEE	67 Neutral	$2.86B	21.24	10.80%	2.36%	8.26%	12.47%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%

Allete Corporate Events

Allete’s Acquisition by CPP and Global Partners Approved

On December 11, 2025, ALLETE, Inc. announced that the Minnesota Public Utilities Commission approved its acquisition by CPP Investments and Global Infrastructure Partners, with the merger expected to close around December 15, 2025. This acquisition is set to enhance ALLETE’s ability to invest in regional transmission infrastructure and renewable energy, aligning with Minnesota’s energy goals and providing approximately $200 million in benefits to Minnesota Power customers and the regional economy. The acquisition has received approval from ALLETE shareholders and relevant federal and state agencies, and will result in ALLETE’s common stock ceasing to be listed on the New York Stock Exchange.

Allete Announces Shareholder Record Date for Merger

On October 5, 2025, ALLETE, Inc. announced the record date for determining shareholders eligible for a potential ‘stub period’ dividend, contingent upon a merger agreement with Alloy Parent LLC. The merger involves ALLETE becoming a subsidiary of Alloy Parent LLC, and the dividend’s declaration and payment are subject to the merger’s completion and regulatory approval.

Allete Acquisition Approved by Minnesota Commission

On October 3, 2025, ALLETE, Inc. announced that the Minnesota Public Utilities Commission approved its acquisition by CPP Investments and Global Infrastructure Partners, with the transaction expected to close in late 2025. This strategic partnership aims to support ALLETE’s clean-energy transition, offering approximately $200 million in customer benefits and ensuring continued reliability and affordability of services. The agreement includes commitments to customer affordability, clean energy projects, and local oversight, with ALLETE’s headquarters remaining in Duluth and the current leadership team in place.