CMS Energy (CMS) AI Stock Analysis

• Market Cap: $21.53B
• Dividend Yield: 2.95%
• Average Volume (3M): 2.82M
• Price to Earnings (P/E): 21.3
• Beta (1Y): 0.07
• Revenue Growth: 5.87%
• EPS Growth: 3.59%
• Country: US
• Employees: 8,324
• Sector: Utilities
• Sector Strength: 82
• Industry: Regulated Electric
• EPS (TTM): 1.02
• Shares Outstanding: 299,123,750
• 10 Day Avg. Volume: 2,404,373
• 30 Day Avg. Volume: 2,824,804
• PEG Ratio: 13.99
• Price to Book (P/B): 2.59
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -25.62
• Enterprise Value/Market Cap: 1.79
• Enterprise Value/Revenue: 1.28
• Enterprise Value/Gross Profit: 12.67
• Enterprise Value/Ebitda: 3.19
• 1Y Price Target: $78.78
• Price Target Upside: 13.58% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10

• Rating: 71 Outperform
• Price Target: $79.00 ▲( 13.90% Upside)

CMS Energy's overall score reflects strong financial performance with solid profitability and revenue growth. Technical analysis suggests potential short-term weakness, while valuation remains moderate. The earnings call and corporate events provide positive long-term guidance but highlight potential risks from operational and storm-related costs.

Positive Factors

Capital Investment

The company's 5-year capital plan increased by 18% to $20bn, driven by investments in clean energy generation and distribution.

Growth Outlook

Significant long-term capital investment opportunities not in the current 5-year plan strengthen and lengthen its growth outlook.

Regulatory Approval

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

Negative Factors

Financial Stability

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

Regulatory Pressure

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

Tax Credit Risk

There is a sizable tax credit transferability risk if the IRA is fully repealed, particularly affecting NorthStar.

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 its utility operations, with Consumers Energy being the main driver. The company earns money by charging customers for electricity and natural gas services based on regulated rates established by state utility commissions. These rates are designed to cover the costs of providing energy services and to allow for a reasonable return on investment. Revenue streams include the sale of electricity generated from a diversified portfolio of power plants, and the distribution and transportation of natural gas. In addition, CMS Energy may engage in strategic partnerships and initiatives aimed at enhancing energy efficiency and expanding renewable energy sources, which can contribute to its earnings. Regulatory factors and the company's ability to manage operational costs and investments in infrastructure play a significant role in its profitability.

CMS Energy Financial Statement Overview

Summary

CMS Energy exhibits strong revenue growth and profitability with a robust balance sheet. However, cash flow management presents challenges due to high capital expenditures affecting free cash flow.

Income Statement

CMS Energy shows a strong financial performance with consistent revenue growth, demonstrated by a 4% increase in TTM revenue compared to the previous year. The company maintains a healthy gross profit margin at 57.14% and an improved net profit margin standing at 13.10% for TTM. However, EBIT and EBITDA margins have shown slight fluctuations, indicating potential operational challenges.

Balance Sheet

The balance sheet reflects a stable financial position with a noteworthy equity growth, reaching $11.6 billion in TTM. The debt-to-equity ratio is moderate at 0.97, suggesting a balanced capital structure. Return on Equity (ROE) has improved to 8.77%, indicating efficient use of equity to generate profits. However, the equity ratio stands at 32.34%, showing room for improvement in asset financing.

Cash Flow

CMS Energy's cash flow position is mixed. The operating cash flow to net income ratio is robust at 2.37, indicating strong cash generation capabilities. However, the free cash flow is negative at -$75 million for TTM, primarily due to high capital expenditures, suggesting potential liquidity challenges if not addressed.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
7.79B	7.51B	7.46B	8.60B	7.33B	6.68B
	Gross Profit
3.04B	3.21B	2.86B	2.76B	2.65B	2.77B
	EBIT
1.57B	1.49B	1.24B	295.00M	209.00M	398.00M
	EBITDA
3.15B	3.07B	2.78B	2.55B	2.44B	2.36B
	Net Income Common Stockholders
1.02B	1.00B	887.00M	837.00M	728.00M	755.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
465.00M	103.00M	227.00M	164.00M	452.00M	168.00M
	Total Assets
36.30B	36.51B	33.52B	31.35B	28.75B	29.67B
	Total Debt
16.97B	16.57B	15.64B	15.43B	12.47B	15.20B
	Net Debt
16.50B	16.46B	15.42B	15.26B	12.02B	15.03B
	Total Liabilities
27.37B	27.17B	25.39B	23.76B	21.57B	23.59B
	Stockholders Equity
8.34B	8.23B	7.54B	7.01B	6.63B	5.50B
Cash Flow		Free Cash Flow
-844.00M	-808.00M	-265.00M	-1.63B	-390.00M	-1.17B
	Operating Cash Flow
2.41B	2.37B	2.31B	855.00M	1.82B	1.28B
	Investing Cash Flow
-3.33B	-3.05B	-3.39B	-2.48B	-1.23B	-2.87B
	Financing Cash Flow
586.00M	614.00M	1.14B	1.32B	-295.00M	1.62B

CMS Energy Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 69.36
• 50DMA: Negative
• 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 Negative. The current price of 69.36 is below the 20-day moving average (MA) of 71.82, below the 50-day MA of 72.17, and above the 200-day MA of 68.58, indicating a neutral trend. The MACD of -0.31 indicates Positive momentum. The RSI at 45.62 is Neutral, neither overbought nor oversold. The STOCH value of 65.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CMS.

CMS Energy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PPL	74 Outperform	$25.79B	26.05	7.00%	3.02%	5.62%	30.02%
CMS	71 Outperform	$21.53B	21.30	12.53%	2.95%	5.87%	3.59%
EIX	71 Outperform	$22.44B	8.27	17.93%	5.65%	5.36%	209.92%
ES	71 Outperform	$23.17B	27.23	5.63%	4.53%	10.82%	―
FE	70 Neutral	$24.66B	22.73	8.69%	3.98%	7.92%	1.54%
CNP	67 Neutral	$24.45B	25.18	9.22%	2.23%	4.76%	4.08%
Sector *	63 Neutral	$8.47B	10.31	4.67%	4.37%	4.05%	-12.96%

CMS Energy Corporate Events

CMS Energy Announces New Corporate Structure

On May 15, 2025, CMS Energy announced a new corporate organizational structure aimed at supporting its operational transformation and long-term strategy, effective July 1, 2025. The restructuring includes new leadership roles and business units, with a focus on enhancing customer service and operational success. This strategic move is expected to enable CMS Energy to deliver consistent results across its triple bottom line of people, planet, and prosperity, positioning the company for future growth and sustainability.

The most recent analyst rating on (CMS) stock is a Hold with a $73.00 price target. To see the full list of analyst forecasts on CMS Energy stock, see the CMS Stock Forecast page.

CMS Energy Shareholders Approve Key Proposals at Annual Meeting

At the CMS Energy 2025 annual meeting of shareholders on May 2, 2025, all board nominees were elected, and key proposals, including executive compensation and the appointment of PricewaterhouseCoopers LLP as the auditor, were approved. Additionally, a shareholder proposal supporting the ability to call special meetings received majority support. Concurrently, at the Consumers Energy 2025 annual meeting, all board nominees were also elected, and similar proposals regarding executive compensation and auditor appointment were approved, reflecting strong shareholder engagement and support.

CMS Energy Reports Q1 2025 Earnings Increase

On April 24, 2025, CMS Energy announced its first-quarter earnings for 2025, reporting an earnings per share of $1.01, up from $0.96 in 2024. The company reaffirmed its 2025 adjusted earnings guidance and expressed confidence in achieving high-end growth targets, supported by favorable outcomes in its electric rate case and ongoing customer investment projects.