Black Hills (BKH) AI Stock Analysis

• Market Cap: $5.51B
• Dividend Yield: 3.91%
• Average Volume (3M): 825.49K
• Price to Earnings (P/E): 18.4
• Beta (1Y): 0.20
• Revenue Growth: 7.03%
• EPS Growth: 6.64%
• Country: US
• Employees: 2,841
• Sector: Utilities
• Sector Strength: 65
• Industry: Diversified Utilities
• EPS (TTM): 0.45
• Shares Outstanding: 75,473,390
• 10 Day Avg. Volume: 824,038
• 30 Day Avg. Volume: 825,494
• PEG Ratio: 0.00
• Price to Book (P/B): 1.17
• Price to Sales (P/S): 1.92
• P/FCF Ratio: -164.04
• Enterprise Value/Market Cap: 1.79
• Enterprise Value/Revenue: 4.34
• Enterprise Value/Gross Profit: 11.26
• Enterprise Value/Ebitda: 12.17
• 1Y Price Target: $77.33
• Price Target Upside: 6.21% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 68 Neutral
• Price Target: $78.00 ▲(7.13% Upside)

The score is driven primarily by stable utility profitability and improving leverage, offset by negative and volatile free cash flow. Technicals are moderately supportive with price above major moving averages and positive MACD. Valuation is reasonable with a ~3.8% dividend yield, and the latest earnings call was constructive with reaffirmed guidance and visible project/capex progress despite cost and financing headwinds.

Positive Factors

Renewable Energy Expansion

The expansion into renewable energy positions Black Hills to benefit from the growing demand for sustainable energy solutions, enhancing long-term growth prospects.

Merger with NorthWestern Energy

The merger could enhance market positioning and operational synergies, providing a stronger competitive edge in the utilities sector.

Capital Projects Progress

Successful completion of key capital projects like the transmission expansion can improve infrastructure reliability and support future growth.

Negative Factors

Revenue Consistency Challenges

Inconsistent revenue growth poses a risk to financial stability, potentially affecting long-term planning and investment strategies.

Free Cash Flow Volatility

Volatile free cash flow can hinder the company's ability to invest in growth opportunities and manage debt, impacting financial flexibility.

Increased O&M Costs

Rising operational and maintenance costs can pressure profit margins, reducing the company's ability to invest in strategic initiatives.

Black Hills Business Overview & Revenue Model

Company Description

Black Hills Corporation, through its subsidiaries, operates as an electric and natural gas utility company in the United States. It operates in two segments, Electric Utilities and Gas Utilities. The Electric Utilities segment generates, transmits, and distributes electricity to approximately 218,000 electric utility customers in Colorado, Montana, South Dakota, and Wyoming; and owns and operates 1,481.5 megawatts of generation capacity and 8,892 miles of electric transmission and distribution lines. The Gas Utilities segment distributes natural gas to approximately 1,094,000 natural gas utility customers in Arkansas, Colorado, Iowa, Kansas, Nebraska, and Wyoming; owns and operates 4,732 miles of intrastate gas transmission pipelines; 41,644 miles of gas distribution mains and service lines; six natural gas storage sites; and approximately 50,000 horsepower of compression and 515 miles of gathering lines. The company also constructs and maintains gas infrastructure facilities for gas transportation customers; and provides appliance repair services to residential utility customers, as well as electrical system construction services to large industrial customers. In addition, it produces electric power through wind, natural gas, and coal-fired generating plants; and coal at its coal mine located near Gillette, Wyoming. The company was incorporated in 1941 and is headquartered in Rapid City, South Dakota.

How the Company Makes Money

Black Hills Corporation generates revenue primarily through its utility operations, which include the sale of electricity and natural gas to consumers. The regulated utility subsidiaries earn income by providing reliable energy services, with rates set by state regulatory commissions. In addition to utility revenues, BKH has significant income from its non-utility operations, which include the generation of electricity from various sources, including coal, natural gas, and renewable energy. The company also engages in the sale of coal and the development of energy projects, which contribute to its revenue. Key partnerships with local governments and regulatory bodies facilitate infrastructure investments and energy projects, enhancing its revenue streams. Additionally, BKH's focus on expanding its renewable energy portfolio positions the company to benefit from growing demand for sustainable energy solutions.

Black Hills Financial Statement Overview

Summary

Profitability is steady for a regulated utility (TTM net margin ~12.7%, EBIT margin ~23.8%) and leverage has improved (TTM debt-to-equity ~1.20x vs ~1.63x in 2021). The main drag is cash-flow quality: despite solid operating cash flow (~$659M TTM), free cash flow is negative (~-$105M TTM) and has been volatile, implying continued external funding needs.

Income Statement

Profitability is steady for a regulated utility profile, with TTM (Trailing-Twelve-Months) net margin around 12.7% and EBIT margin near 23.8%. Revenue has re-accelerated in TTM (Trailing-Twelve-Months) (+1.3%) after two years of declines in 2023–2024, suggesting improving top-line momentum. A key watch item is data consistency in earlier periods (2021–2022 show unusually high/negative margin figures), which reduces confidence in trend comparisons across the full history, but 2023–TTM margins appear comparatively stable.

Balance Sheet

Leverage is meaningful but typical for utilities: TTM (Trailing-Twelve-Months) debt-to-equity is ~1.20x (improved from ~1.63x in 2021), indicating a gradual strengthening of the capital structure. Equity has grown over time (supporting balance-sheet resilience), while returns on equity are steady around ~8%, consistent with a regulated earnings model. The main weakness is the still-elevated absolute debt load, which can pressure financial flexibility if rates or capital spending needs rise.

Cash Flow

Cash generation is mixed. Operating cash flow is solid in TTM (Trailing-Twelve-Months) (~$659M), but free cash flow is negative in TTM (Trailing-Twelve-Months) (about -$105M), indicating capital spending is outrunning internally generated cash. Free cash flow has been volatile (strongly positive in 2023, negative in multiple other years), which increases funding reliance on debt/equity markets. A positive is that operating cash flow generally tracks earnings over time, but the repeated free-cash-flow deficits are the central concern.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.27B	2.13B	2.33B	2.55B	1.95B	1.70B
Gross Profit	875.40M	840.40M	796.40M	772.80M	705.50M	709.13M
EBITDA	809.80M	785.30M	738.40M	709.50M	648.50M	645.07M
Net Income	284.80M	273.10M	262.20M	258.40M	236.70M	227.61M
Balance Sheet
Total Assets	10.33B	10.02B	9.62B	9.62B	9.13B	8.09B
Cash, Cash Equivalents and Short-Term Investments	29.10M	16.10M	86.60M	21.40M	8.92M	6.36M
Total Debt	4.38B	4.38B	4.40B	4.67B	4.55B	3.77B
Total Liabilities	6.48B	6.44B	6.31B	6.53B	6.24B	5.43B
Stockholders Equity	3.77B	3.50B	3.22B	2.99B	2.79B	2.56B
Cash Flow
Free Cash Flow	-105.40M	-24.90M	388.80M	-19.60M	-742.06M	-225.54M
Operating Cash Flow	658.50M	719.30M	944.40M	584.80M	-64.56M	541.86M
Investing Cash Flow	-770.40M	-746.00M	-536.70M	-603.90M	-664.23M	-761.66M
Financing Cash Flow	121.40M	-42.90M	-341.70M	32.30M	731.87M	216.88M

Black Hills Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 72.81
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BKH, the sentiment is Positive. The current price of 72.81 is above the 20-day moving average (MA) of 71.81, above the 50-day MA of 71.06, and above the 200-day MA of 62.44, indicating a bullish trend. The MACD of 0.74 indicates Negative momentum. The RSI at 57.15 is Neutral, neither overbought nor oversold. The STOCH value of 49.20 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BKH.

Black Hills Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AVA	77 Outperform	$3.36B	17.34	7.31%	5.10%	2.14%	-6.51%
OTTR	77 Outperform	$3.74B	13.31	16.10%	2.54%	-3.18%	-8.62%
NWE	74 Outperform	$4.17B	19.14	7.62%	4.09%	4.90%	-4.42%
MGEE	69 Neutral	$2.92B	21.42	10.80%	2.36%	8.26%	12.47%
BKH	68 Neutral	$5.51B	18.38	7.90%	3.91%	7.03%	6.64%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%