CMS Energy (CMS) AI Stock Analysis

• Market Cap: $21.41B
• Dividend Yield: 2.99%
• Average Volume (3M): 2.27M
• Price to Earnings (P/E): 21.1
• Beta (1Y): 0.05
• Revenue Growth: 8.25%
• EPS Growth: 4.37%
• Country: US
• Employees: 8,324
• Sector: Utilities
• Sector Strength: 63
• Industry: Regulated Electric
• EPS (TTM): 0.71
• Shares Outstanding: 299,335,450
• 10 Day Avg. Volume: 1,957,946
• 30 Day Avg. Volume: 2,269,493
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.80
• Enterprise Value/Revenue: 4.82
• Enterprise Value/Gross Profit: 11.45
• Enterprise Value/Ebitda: 11.99
• 1Y Price Target: $78.14
• Price Target Upside: 9.23% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8

• Rating: 66 Neutral
• Price Target: $77.00 ▲(7.63% Upside)

CMS Energy's overall score reflects strong earnings call insights and solid financial performance, tempered by high leverage and mixed technical indicators. The company's positive outlook and strategic agreements support its growth potential, but attention to debt management and cash flow improvement is crucial.

Positive Factors

Growth Potential

CMS is well positioned to weather IRA and tariff risks, with a 9 GW load growth pipeline providing potential to mitigate evolving risks.

Regulatory Environment

The Michigan PSC approved a final order in CMS’s electric rate case proceeding, which is viewed as a constructive outcome for CMS Energy.

Valuation

CMS Energy's price objective has been raised to $80 from $73, reflecting a positive valuation outlook.

Negative Factors

Affordability Concerns

Higher customer costs could increase regulatory pressure on affordability at the utility, impacting earnings.

Investor Preference

Northstar ITC and debt tender gains are viewed as lower quality, and investors prefer traditional utility rate base investments.

Tax Credit Exposure

CMS has roughly $700 million of tax credit transferability exposure, which could impact financial stability if reforms occur.

CMS Energy Business Overview & Revenue Model

Company Description

CMS Energy Corporation operates as an energy company primarily in Michigan. The company operates through three segments: Electric Utility; Gas Utility; and Enterprises. The Electric Utility segment is involved in the generation, purchase, transmission, distribution, and sale of electricity. This segment generates electricity through coal, wind, gas, renewable energy, oil, and nuclear sources. Its distribution system comprises 208 miles of high-voltage distribution overhead lines; 4 miles of high-voltage distribution underground lines; 4,428 miles of high-voltage distribution overhead lines; 19 miles of high-voltage distribution underground lines; 82,474 miles of electric distribution overhead lines; 9,395 miles of underground distribution lines; 1,093 substations; and 3 battery facilities. The Gas Utility segment engages in the purchase, transmission, storage, distribution, and sale of natural gas, which includes 2,392 miles of transmission lines; 15 gas storage fields; 28,065 miles of distribution mains; and 8 compressor stations. The Enterprises segment is involved in the independent power production and marketing, including the development and operation of renewable generation. It serves 1.9 million electric and 1.8 million gas customers, including residential, commercial, and diversified industrial customers. The company was incorporated in 1987 and is headquartered in Jackson, Michigan.

How the Company Makes Money

CMS Energy generates revenue primarily through the sale of electricity and natural gas to residential, commercial, and industrial customers within its service territories. The company's revenue model is supported by regulated rates set by the Michigan Public Service Commission, which allows it to recover costs and earn a regulated return on its investments in infrastructure. Key revenue streams include residential and commercial electricity sales, natural gas distribution, and ancillary services such as energy efficiency programs. Additionally, CMS Enterprises contributes to revenue through investments in power generation projects and partnerships that enhance its portfolio in renewable energy. Factors such as regulatory approvals, energy demand, and operational efficiencies also play significant roles in driving the company's earnings.

CMS Energy Financial Statement Overview

Summary

CMS Energy demonstrates strong profitability and revenue growth, supported by efficient operations. However, high leverage and challenges in free cash flow generation present potential risks. The company should focus on managing its debt levels and enhancing cash flow to ensure long-term financial stability.

Income Statement

CMS Energy shows a stable revenue growth rate of 2.97% in the TTM, indicating a positive trajectory compared to previous periods. The company maintains healthy margins with a gross profit margin of 38.49% and a net profit margin of 12.76% in the TTM. However, the gross profit margin has slightly decreased from the previous year. The EBIT and EBITDA margins remain strong, reflecting efficient operational management. Overall, the income statement suggests solid profitability and growth potential.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 2.15 in the TTM, indicating significant leverage, which could pose financial risks. However, the return on equity is robust at 12.37%, showcasing effective use of equity to generate profits. The equity ratio is moderate, suggesting a balanced asset structure. While the company is leveraging debt effectively, the high debt levels warrant cautious monitoring.

Cash Flow

CMS Energy's cash flow statement indicates challenges with free cash flow, which has seen negative growth and remains low relative to net income. The operating cash flow to net income ratio is 0.89, suggesting adequate cash generation from operations. However, the free cash flow to net income ratio is only 0.38, highlighting potential liquidity constraints. The company needs to improve its free cash flow generation to strengthen its financial flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	8.02B	7.51B	7.46B	8.60B	7.33B	6.42B
Gross Profit	3.37B	3.21B	2.86B	2.76B	2.65B	2.63B
EBITDA	3.22B	3.07B	2.78B	2.55B	2.44B	2.36B
Net Income	1.02B	1.00B	887.00M	837.00M	1.35B	755.00M
Balance Sheet
Total Assets	37.70B	35.92B	33.52B	31.35B	28.75B	29.67B
Cash, Cash Equivalents and Short-Term Investments	844.00M	103.00M	227.00M	164.00M	452.00M	32.00M
Total Debt	18.05B	16.59B	15.67B	14.34B	12.50B	12.42B
Total Liabilities	28.73B	27.17B	25.39B	23.76B	21.57B	23.59B
Stockholders Equity	8.39B	8.23B	7.54B	7.01B	6.63B	5.50B
Cash Flow
Free Cash Flow	1.09B	-808.00M	-265.00M	-1.63B	-390.00M	-1.17B
Operating Cash Flow	2.85B	2.37B	2.31B	855.00M	1.82B	1.28B
Investing Cash Flow	-3.75B	-3.05B	-3.39B	-2.48B	-1.23B	-2.87B
Financing Cash Flow	1.74B	614.00M	1.14B	1.32B	-295.00M	1.62B

CMS Energy Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 71.54
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CMS, the sentiment is Neutral. The current price of 71.54 is below the 20-day moving average (MA) of 72.45, above the 50-day MA of 71.49, and above the 200-day MA of 69.52, indicating a neutral trend. The MACD of -0.13 indicates Positive momentum. The RSI at 45.53 is Neutral, neither overbought nor oversold. The STOCH value of 20.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CMS.

CMS Energy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AEE	75 Outperform	$26.97B	21.90	10.29%	2.74%	17.32%	3.35%
FE	73 Outperform	$25.10B	19.19	10.33%	4.00%	6.44%	49.07%
EIX	72 Outperform	$21.47B	8.20	17.37%	5.97%	4.26%	173.18%
DTE	71 Outperform	$28.16B	19.52	12.61%	3.14%	14.35%	3.62%
Sector *	66 Neutral	$17.25B	17.87	5.54%	3.65%	6.63%	11.55%
CMS	66 Neutral	$21.41B	21.11	12.48%	2.99%	8.25%	4.37%
ES	66 Neutral	$23.64B	27.42	5.63%	4.63%	14.44%	―

CMS Energy Corporate Events

CMS Energy Reports Strong Q2 2025 Financial Results

On July 31, 2025, CMS Energy announced strong financial results for the second quarter of 2025, with reported earnings per share of $0.66, slightly up from $0.65 in 2024, and adjusted earnings per share of $0.71, compared to $0.66 in the previous year. The company reaffirmed its 2025 adjusted earnings guidance and expressed confidence in achieving the high end of its long-term adjusted EPS growth target of 6 to 8 percent. Additionally, CMS Energy reached an agreement with a new data center, expected to add significant load growth and economic benefits in Michigan.

CMS Energy Upsizes Cash Tender Offer for Bonds

On June 18, 2025, CMS Energy announced the early results and upsizing of its cash tender offer for certain outstanding debt securities. The company increased the Aggregate Tender Cap from $125 million to $147.095 million for its 2.50% First Mortgage Bonds due 2060. The early settlement date for these securities is expected to be June 23, 2025. CMS Energy does not anticipate purchasing additional securities after this date, as the amount tendered exceeded the Aggregate Tender Cap.

CMS Energy Director Kurt Darrow Announces Retirement

On June 5, 2025, Kurt Darrow announced his retirement from the Boards of Directors of CMS Energy Corporation and Consumers Energy Company, effective July 1, 2025. His departure is based on personal reasons and not due to any disagreements with the companies. The Boards and management expressed their gratitude for his service and contributions.

CMS Energy Announces $125M Debt Tender Offer

On June 4, 2025, CMS Energy announced a cash tender offer to purchase up to $125 million of outstanding debt securities issued by Consumers Energy Company. This move is part of a strategic financial maneuver to manage its debt portfolio, potentially impacting its financial stability and market perception. The tender offer, set to expire on July 3, 2025, is structured to prioritize certain bonds based on acceptance priority levels, allowing CMS Energy to optimize its debt structure.