Black Hills (BKH) AI Stock Analysis

• Market Cap: $4.49B
• Dividend Yield: 4.3%
• Average Volume (3M): 641.35K
• Price to Earnings (P/E): 15.5
• Beta (1Y): 0.32
• Revenue Growth: 5.41%
• EPS Growth: -1.89%
• Country: US
• Employees: 2,841
• Sector: Utilities
• Sector Strength: 84
• Industry: Diversified Utilities
• EPS (TTM): 0.38
• Shares Outstanding: 72,851,740
• 10 Day Avg. Volume: 751,668
• 30 Day Avg. Volume: 641,348
• 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: 1.89
• Enterprise Value/Revenue: 3.79
• Enterprise Value/Gross Profit: 9.78
• Enterprise Value/Ebitda: 10.50
• 1Y Price Target: $63.00
• Price Target Upside: 2.24% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

• Rating: 72 Outperform
• Price Target: $68.00 ▲(10.35% Upside)

Black Hills Corporation's strong earnings call performance and attractive valuation are the most significant factors driving the stock score. While technical indicators suggest potential short-term volatility, the company's solid financial foundation and strategic initiatives support a positive long-term outlook.

Positive Factors

Future Performance

Management expects to deliver toward the upper-end of its 4-6% long-term EPS growth, indicating confidence in future performance.

Investment Opportunity

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

Negative Factors

Balance Sheet Pressure

A larger capital expenditure program would increase pressure on an already tight balance sheet, potentially impacting financial stability.

Equity Issuance

There is an implication of annual EPS dilution of 2.5-3% due to planned equity issuance, which could affect share value.

Financing Costs

Higher financing costs and other expenses are partially offsetting earnings growth.

Black Hills Business Overview & Revenue Model

Company Description

Black Hills Corporation (BKH) is a diversified energy company based in the United States, primarily engaged in providing electric and natural gas services to residential, commercial, and industrial customers. With operations spanning multiple states, the company operates through two main segments: utility operations, which include electric and gas distribution, and non-regulated operations, which encompass power generation and other energy-related services. BKH is committed to delivering reliable energy solutions while also focusing on renewable energy initiatives.

How the Company Makes Money

Black Hills Corporation generates revenue primarily through its utility operations by charging customers for the electricity and natural gas they consume. The company earns a return on investment through regulated rates set by state utility commissions, which allows them to recover costs and earn a profit margin. Additionally, BKH's non-regulated operations contribute to its revenue through the sale of electricity generated from renewable sources and other energy services. Significant partnerships with local governments and energy organizations further enhance its ability to expand its service offerings and optimize operations, thus contributing to its overall earnings.

Black Hills Financial Statement Overview

Summary

Black Hills maintains a sound financial position with stable profitability and reasonable leverage levels. The income statement reflects efficient operations, while the balance sheet is solid but could benefit from increased equity. Cash flow performance is mixed due to substantial capital expenditures, though operating cash flow remains strong. The company appears well-positioned for steady growth, but vigilance is required to manage debt and sustain cash flow amidst industry dynamics.

Income Statement

Black Hills exhibits stable profitability with a consistent gross profit margin around 38.8% in TTM, reflecting efficient cost management. The net profit margin is solid at 12.7%, indicating healthy bottom-line efficiency. Revenue growth is modest, with a 3.7% increase TTM compared to the prior year, suggesting steady demand. However, EBIT and EBITDA margins, at 23.3% and 36.3% respectively, underline strong operational control but highlight limited growth potential in revenues.

Balance Sheet

The balance sheet shows a moderate debt-to-equity ratio of 1.19, indicating a balanced approach to leverage. The return on equity is strong at 7.7%, highlighting effective utilization of shareholder funds. However, the equity ratio is at 36.1%, which suggests room for strengthening the equity base. Overall, the financial position remains stable but could benefit from increased equity to reduce reliance on debt.

Cash Flow

Operating cash flow to net income ratio is robust at 2.55, indicating strong cash conversion capabilities. Despite a negative free cash flow, primarily due to high capital expenditures, the free cash flow to net income ratio is improving. However, the free cash flow growth rate is negative, which could be a concern if it persists, given the need for ongoing investments in the utilities sector.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.24B	2.13B	2.33B	2.55B	1.95B	1.70B
Gross Profit	869.50M	840.40M	796.40M	772.80M	705.50M	709.13M
EBITDA	809.90M	785.30M	738.40M	709.50M	648.50M	645.07M
Net Income	284.30M	273.10M	262.20M	258.40M	236.70M	227.61M
Balance Sheet
Total Assets	10.09B	10.02B	9.62B	9.62B	9.13B	8.09B
Cash, Cash Equivalents and Short-Term Investments	8.10M	16.10M	86.60M	21.43M	8.92M	6.36M
Total Debt	4.38B	4.38B	4.40B	4.67B	4.55B	3.77B
Total Liabilities	6.37B	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	269.90M	-24.90M	388.80M	-19.56M	-742.06M	-225.54M
Operating Cash Flow	671.70M	719.30M	944.40M	584.80M	-64.56M	541.86M
Investing Cash Flow	-405.30M	-746.00M	-536.70M	-603.88M	-664.23M	-761.66M
Financing Cash Flow	-458.30M	-42.90M	-341.70M	32.25M	731.87M	216.88M

Black Hills Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 61.62
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 61.62 is above the 20-day moving average (MA) of 58.53, above the 50-day MA of 57.46, and above the 200-day MA of 58.42, indicating a bullish trend. The MACD of 1.15 indicates Negative momentum. The RSI at 72.44 is Negative, neither overbought nor oversold. The STOCH value of 94.78 is Negative, 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
OTTR	77 Outperform	$3.44B	12.08	17.13%	2.48%	-3.69%	-8.25%
NWE	74 Outperform	$3.44B	15.25	7.93%	4.73%	3.78%	7.48%
BKH	72 Outperform	$4.49B	15.53	8.13%	4.30%	5.41%	-1.89%
AVA	72 Outperform	$3.04B	16.82	6.91%	5.15%	2.41%	-9.85%
MGEE	69 Neutral	$3.09B	23.51	10.75%	2.14%	8.47%	12.76%
Sector *	65 Neutral	€15.46B	-5.96	13.10%	3.15%	-10.76%	32.28%
ALE	62 Neutral	$3.82B	20.77	6.46%	4.40%	-0.44%	-17.46%

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.