Black Hills (BKH) AI Stock Analysis

• Market Cap: $4.12B
• Dividend Yield: 4.76%
• Average Volume (3M): 432.46K
• Price to Earnings (P/E): 14.5
• Beta (1Y): 0.36
• Revenue Growth: 3.28%
• EPS Growth: -3.49%
• Country: US
• Employees: 2,841
• Sector: Utilities
• Sector Strength: 84
• Industry: Diversified Utilities
• EPS (TTM): 1.87
• Shares Outstanding: 72,509,380
• 10 Day Avg. Volume: 424,097
• 30 Day Avg. Volume: 432,459
• PEG Ratio: 2.75
• Price to Book (P/B): 1.52
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -233.19
• Enterprise Value/Market Cap: 2.00
• Enterprise Value/Revenue: 0.96
• Enterprise Value/Gross Profit: 9.64
• Enterprise Value/Ebitda: 2.64
• 1Y Price Target: $63.50
• Price Target Upside: 11.74% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 2

• Rating: 68 Neutral
• Price Target: $63.00 ▲(10.86%Upside)

The overall stock score for Black Hills Corporation is driven by positive earnings call insights and a solid financial performance with a stable valuation. However, technical analysis indicates bearish trends, and concerns about free cash flow and regulatory challenges are notable.

Positive Factors

Earnings and Guidance

Black Hills reaffirmed its annual EPS guidance and long-term growth targets, indicating confidence in future performance.

Growth Strategy

The company has a strong balance sheet and a regulated focused growth strategy, which are expected to drive outperformance.

Valuation

Black Hills shares are excessively discounted at a 20-21% discount compared to peers, offering an attractive investment opportunity.

Negative Factors

Earnings Performance

Analyst maintains an Underperform rating on Black Hills due to weaker earnings performance.

Financing Costs

Financing costs still pose a headwind, with potential pressure to BKH’s EPS CAGR from incremental equity issuance and debt refinancing.

Interest Expenses

Higher interest expenses negatively impacted the company's year-over-year financial performance.

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. The company's main revenue streams include electric utility services and natural gas utility services. In the electric utility segment, BKH makes money by generating, transmitting, and distributing electricity to residential, commercial, and industrial customers. Revenue is primarily derived from customer usage, which is regulated by state public utility commissions that approve the rates charged to customers. In the natural gas utility segment, the company earns revenue by distributing natural gas to its customers and through its natural gas transmission and storage services. Like its electric services, the rates and services are regulated, ensuring a stable revenue stream. Additionally, Black Hills Corporation engages in non-regulated energy services, including power generation from renewable sources and energy marketing, which provide supplementary income. Strategic partnerships and investments in infrastructure also contribute to the company's financial performance by enhancing operational efficiency and expanding its service capabilities.

Black Hills Financial Statement Overview

Summary

Black Hills Corporation shows financial stability with consistent revenue and good operational efficiency. The balance sheet is solid with moderate leverage, though high liabilities could impact flexibility. Strong cash flow generation is noted, but capital expenditures affect free cash flow, which is a concern.

Income Statement

The income statement shows a stable revenue base with a modest revenue growth from $2.127 billion to $2.331 billion. The gross profit margin remains high, reflecting the regulated nature of the industry, but net profit margin is relatively lower. The EBIT margin is healthy and the EBITDA margin is robust, indicating good operational efficiency. However, the net income has seen fluctuations, indicating some volatility in earnings.

Balance Sheet

The balance sheet reflects a solid equity base with a consistent increase in stockholders' equity over the years. The debt-to-equity ratio is moderate, showing a balanced use of leverage, but the high total liabilities compared to equity could be a concern. The equity ratio is relatively stable, indicating a decent proportion of assets financed by equity.

Cash Flow

Cash flow analysis indicates strong operating cash flow with consistent generation over the years. However, free cash flow has been negative at times due to high capital expenditures, typical for the utilities industry. The operating cash flow to net income ratio suggests good cash conversion efficiency, but the free cash flow to net income ratio is a concern due to negative free cash flows.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.21B	2.13B	2.33B	2.55B	1.95B	1.70B
	Gross Profit
855.90M	840.40M	796.40M	772.80M	705.50M	709.13M
	EBIT
514.70M	503.10M	472.70M	455.20M	409.40M	428.30M
	EBITDA
800.30M	785.30M	738.40M	709.50M	648.50M	645.07M
	Net Income Common Stockholders
279.60M	273.10M	262.20M	258.40M	236.70M	227.61M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
0.00	16.10M	86.60M	21.43M	8.92M	6.36M
	Total Assets
0.00	10.39B	9.62B	9.62B	9.13B	8.09B
	Total Debt
359.90M	4.38B	4.40B	4.67B	4.55B	3.77B
	Net Debt
359.90M	4.37B	4.31B	4.65B	4.54B	3.76B
	Total Liabilities
6.34B	6.44B	6.31B	6.53B	6.24B	5.43B
	Stockholders Equity
3.64B	3.50B	3.22B	2.99B	2.79B	2.56B
Cash Flow		Free Cash Flow
-7.20M	-24.90M	388.80M	-19.56M	-742.06M	-225.54M
	Operating Cash Flow
713.70M	719.30M	944.40M	584.80M	-64.56M	541.86M
	Investing Cash Flow
-724.30M	-746.00M	-536.70M	-603.88M	-664.23M	-761.66M
	Financing Cash Flow
-105.00M	-42.90M	-341.70M	32.25M	731.87M	216.88M

Black Hills Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 56.83
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BKH, the sentiment is Negative. The current price of 56.83 is below the 20-day moving average (MA) of 57.95, below the 50-day MA of 58.53, and below the 200-day MA of 58.59, indicating a bearish trend. The MACD of -0.41 indicates Positive momentum. The RSI at 39.79 is Neutral, neither overbought nor oversold. The STOCH value of 27.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BKH.

Black Hills Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OTTR	74 Outperform	$3.25B	11.05	18.38%	2.71%	-2.68%	-3.73%
BKH	68 Neutral	$4.12B	14.51	8.02%	4.76%	3.28%	-3.49%
NWE	68 Neutral	$3.17B	13.43	8.27%	5.11%	4.31%	19.33%
ALE	67 Neutral	$3.75B	20.31	6.49%	4.51%	-11.15%	-23.41%
AVA	67 Neutral	$3.01B	15.89	7.25%	5.25%	3.14%	-2.66%
Sector *	64 Neutral	$8.59B	10.39	4.24%	4.64%	4.07%	-13.04%
MGEE	62 Neutral	$3.21B	24.89	10.62%	2.05%	6.03%	6.15%

Black Hills Corporate Events

Black Hills Amends Equity Distribution Agreement

On May 8, 2025, Black Hills Corporation amended its Equity Distribution Sales Agreement to continue its at-the-market equity offering program, maintaining an aggregate gross sales price of up to $400 million. This amendment allows the company to utilize its existing shelf registration statement, ensuring the continuation of its strategic financial operations and potentially impacting its financial advisory and investment banking relationships.