Allete (ALE) AI Stock Analysis

• Market Cap: $3.91B
• Dividend Yield: 4.29%
• Average Volume (3M): 685.31K
• Price to Earnings (P/E): 23.6
• Beta (1Y): -0.03
• Revenue Growth: -4.30%
• EPS Growth: -8.49%
• Country: US
• Employees: 1,595
• Sector: Utilities
• Sector Strength: 65
• Industry: Diversified Utilities
• EPS (TTM): 0.46
• Shares Outstanding: 58,098,400
• 10 Day Avg. Volume: 585,779
• 30 Day Avg. Volume: 685,308
• 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: 1.66
• Enterprise Value/Revenue: 4.34
• Enterprise Value/Gross Profit: 15.65
• Enterprise Value/Ebitda: 13.73
• 1Y Price Target: $67.00
• Price Target Upside: -0.80% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): 3.86
• Revenue Forecast (FY): $1.59B

• Rating: 68 Neutral
• Price Target: $73.00 ▲(8.08% Upside)

Allete's overall stock score is primarily driven by its strong technical analysis, indicating positive market momentum. The financial performance presents a mixed picture with strong gross profit margins but concerns over declining revenue growth and profitability. The valuation is slightly high, but the attractive dividend yield provides a counterbalance. The absence of earnings call and corporate events data means these factors did not influence the score.

Allete Business Overview & Revenue Model

Company Description

Allete, Inc. (ticker: ALE) is a diversified energy company based in the United States, primarily operating in the electric utility sector through its subsidiary, Minnesota Power. Allete provides electric service to approximately 145,000 customers in northern Minnesota and is engaged in renewable energy development, focusing on wind and solar energy projects. The company also has interests in real estate and an energy services division, which enhances its portfolio by expanding into various energy-related ventures.

How the Company Makes Money

Allete generates revenue primarily through the sale of electricity to its residential, commercial, and industrial customers. The utility operations, particularly through Minnesota Power, account for a significant portion of its revenue, driven by regulated rates set by state utility commissions. Additionally, Allete earns money from its renewable energy initiatives, including wind and solar projects, which contribute to both energy sales and potential tax credits or incentives. The company also generates revenue from its real estate operations and energy services, diversifying its income streams. Strategic partnerships with renewable energy developers and investments in infrastructure projects further bolster Allete's earnings, aligning with the growing demand for sustainable energy solutions.

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: 67.54
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Negative
• STOCH: Neutral

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 67.54 is above the 20-day moving average (MA) of 67.37, above the 50-day MA of 66.03, and above the 200-day MA of 64.63, indicating a bullish trend. The MACD of 0.29 indicates Positive momentum. The RSI at 71.75 is Negative, neither overbought nor oversold. The STOCH value of 73.97 is Neutral, 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
NWE	78 Outperform	$3.99B	18.41	7.62%	4.38%	4.90%	-4.42%
BKH	76 Outperform	$5.37B	17.95	7.90%	4.20%	7.03%	6.64%
OTTR	72 Outperform	$3.55B	12.78	16.10%	2.49%	-3.18%	-8.62%
ALE	68 Neutral	$3.91B	23.60	5.83%	4.29%	-4.30%	-8.49%
AVA	68 Neutral	$3.35B	17.48	7.31%	4.65%	2.14%	-6.51%
MGEE	67 Neutral	$3.04B	22.59	10.80%	2.17%	8.26%	12.47%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%

Allete Corporate Events

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.

The most recent analyst rating on (ALE) stock is a Hold with a $70.00 price target. To see the full list of analyst forecasts on Allete stock, see the ALE Stock Forecast page.

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.

The most recent analyst rating on (ALE) stock is a Hold with a $70.00 price target. To see the full list of analyst forecasts on Allete stock, see the ALE Stock Forecast page.

Allete Inc. Reports Steady Revenue Growth in Q2 2025

Allete Inc., a company based in Minnesota, operates primarily in the energy sector, focusing on providing electricity and energy services through its various subsidiaries. The company is known for its commitment to clean energy and sustainability initiatives.