Centerpoint Energy (CNP) AI Stock Analysis

• Market Cap: $23.63B
• Dividend Yield: 2.33%
• Average Volume (3M): 5.77M
• Price to Earnings (P/E): 22.9
• Beta (1Y): 0.27
• Revenue Growth: -0.61%
• EPS Growth: 15.54%
• Country: US
• Employees: 8,872
• Sector: Utilities
• Sector Strength: 88
• Industry: Regulated Electric
• EPS (TTM): 1.58
• Shares Outstanding: 651,729,060
• 10 Day Avg. Volume: 7,423,706
• 30 Day Avg. Volume: 5,774,324
• PEG Ratio: 1.47
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.70
• Price to Cash Flow (P/CF): 6.60
• P/FCF Ratio: 6.50
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $35.00
• Price Target Upside: -3.29% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 13

CenterPoint Energy scores strongly due to robust earnings growth and strategic investments in system resiliency, supporting long-term growth. However, challenges such as fluctuating revenues, negative free cash flow, and increased liabilities weigh on the financial performance. The technical analysis reflects a positive trend, while the valuation is fair with a reasonable P/E ratio and dividend yield.

Positive Factors

Earnings Growth

Confidence in the 8.3% EPS growth forecast is supported by CNP’s track record of meeting or exceeding its earnings guidance in recent years.

Regulatory Clarity

CNP's regulatory clarity improves with four constructive rate case settlements and a successful mobile gen asset transfer.

Negative Factors

Equity Layer Implications

Concerns remain about the company's decision to potentially settle on a higher equity layer and the implications for distribution customers.

Revenue Concerns

There is a question about whether the $46m revenue reduction will satisfy the Lt. Governor and his constituents.

Centerpoint Energy Business Overview & Revenue Model

Company Description

CenterPoint Energy, Inc. operates as a public utility holding company in the United States. The company operates through Electric and Natural Gas segments. The Electric segment includes electric transmission and distribution services to electric customers and electric generation assets, as well as assets in the wholesale power market. The Natural Gas segment provides natural gas distribution services, as well as home appliance maintenance and repair services to customers in Minnesota; and home repair protection plans to natural gas customers in Arkansas, Indiana, Mississippi, Ohio, Oklahoma, and Texas and Louisiana through a third party. This segment also engages in the sale of regulated intrastate natural gas, and transportation and storage of natural gas for residential, commercial, industrial, and transportation customers. As of December 31, 2021, it served approximately 2.7 million metered customers; owned 239 substation sites with a total installed rated transformer capacity of 71,241 megavolt amperes; operated approximately 1,00,000 linear miles of natural gas distribution and transmission mains; and owned and operated 285 miles of intrastate pipeline in Louisiana, Texas, and Oklahoma. The company was founded in 1866 and is headquartered in Houston, Texas.

How the Company Makes Money

CenterPoint Energy makes money through its electric and natural gas utility operations. The company earns revenue by charging customers for the distribution of electricity and natural gas, which includes fixed service fees and variable charges based on usage. As a regulated utility, its rates are determined and approved by state regulatory commissions, ensuring a stable revenue stream. Additionally, CenterPoint Energy may generate income from infrastructure investments and energy-related services, such as construction and maintenance of utility infrastructure. Key partnerships with local governments and regulatory bodies, alongside strategic investments in grid modernization and renewable energy initiatives, also contribute to its earnings by enhancing operational efficiency and expanding service offerings.

Centerpoint Energy Financial Statement Overview

Summary

CenterPoint Energy's financial performance shows resilience with strong EBIT margins but faces challenges with inconsistent revenue growth and negative free cash flow. The balance sheet is stable with moderate leverage, but increased liabilities and high capital expenditures need careful management.

Income Statement

The income statement shows a mixed performance. While the company has maintained a strong EBIT margin, the net profit margin has been volatile, with a recent strong recovery from negative profits in 2020. Revenue growth has been inconsistent, showing fluctuations over the years. The gross profit margin is notably missing for the latest period, which impacts the clarity of profitability analysis.

Balance Sheet

The balance sheet reflects a relatively stable financial structure. The debt-to-equity ratio indicates moderate leverage, typical for a regulated utility company. Stockholders' equity has been growing, which is a positive sign. However, the equity ratio is not available for the most recent period, limiting a full analysis. The company's liabilities have increased, which could pose risks if not managed carefully.

Cash Flow

Cash flows reveal some concerns, particularly with negative free cash flow over multiple years due to high capital expenditures. The operating cash flow to net income ratio suggests solid cash generation relative to profits, but the negative free cash flow to net income ratio highlights ongoing cash usage for investments, which could affect liquidity if not balanced with financing activities.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
8.64B	8.70B	9.32B	8.35B	7.42B
	Gross Profit
3.98B	3.69B	3.40B	3.21B	2.93B
	EBIT
1.99B	1.76B	1.57B	1.36B	-168.00M
	EBITDA
3.49B	3.19B	3.23B	2.62B	2.28B
	Net Income Common Stockholders
1.02B	917.00M	1.06B	668.00M	-591.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
585.00M	631.00M	584.00M	1.67B	147.00M
	Total Assets
43.77B	39.72B	38.55B	37.68B	33.47B
	Total Debt
564.00M	18.62B	16.86B	16.10B	13.44B
	Net Debt
564.00M	18.53B	16.78B	15.87B	13.29B
	Total Liabilities
33.10B	30.05B	28.50B	28.26B	25.12B
	Stockholders Equity
10.67B	9.67B	10.04B	9.41B	8.35B
Cash Flow		Free Cash Flow
-2.37B	-524.00M	-2.61B	-3.14B	-601.00M
	Operating Cash Flow
2.14B	3.88B	1.81B	22.00M	2.00B
	Investing Cash Flow
-4.49B	-4.23B	-1.63B	-1.85B	-1.26B
	Financing Cash Flow
2.27B	374.00M	-345.00M	1.92B	-834.00M

Centerpoint Energy Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 36.19
• 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 CNP, the sentiment is Positive. The current price of 36.19 is above the 20-day moving average (MA) of 35.98, above the 50-day MA of 34.45, and above the 200-day MA of 30.63, indicating a bullish trend. The MACD of 0.70 indicates Negative momentum. The RSI at 73.63 is Negative, neither overbought nor oversold. The STOCH value of 81.54 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CNP.

Centerpoint Energy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CMS	78 Outperform	$21.28B	21.37	12.72%	2.93%	0.71%	11.07%
EIX	70 Outperform	$21.58B	16.93	8.83%	5.65%	7.72%	6.49%
FE	70 Outperform	$22.73B	23.23	8.54%	4.32%	4.68%	-11.66%
PPL	68 Neutral	$25.25B	28.53	6.33%	3.06%	1.80%	19.78%
CNP	66 Neutral	$23.63B	22.92	10.02%	2.33%	-0.61%	15.54%
ES	66 Neutral	$20.67B	24.80	5.56%	5.14%	-0.08%	―
Sector *	65 Neutral	$11.78B	15.57	6.20%	4.58%	5.53%	-8.93%

Centerpoint Energy Corporate Events

CenterPoint Energy Releases CEI South’s Audited Financials

CenterPoint Energy has released audited financial statements for its subsidiary, Southern Indiana Gas and Electric Company (CEI South), for the years ended December 31, 2024, and 2023. The financial statements, which include balance sheets, income statements, and cash flow statements, have been audited in accordance with generally accepted auditing standards in the United States. The release of these statements provides stakeholders with a comprehensive view of CEI South’s financial health and operations, although they are not intended to comply with certain regulatory requirements and will not be incorporated into CenterPoint Energy’s registration statements unless specified.

CenterPoint Energy Reports Strong Q4 2024 Earnings Growth

CenterPoint Energy reported its fourth quarter and full-year 2024 financial results, showing a 25% increase in non-GAAP earnings per share for Q4 compared to 2023. The company plans to increase its capital investment to $47.5 billion by 2030 to enhance grid resilience in the Houston region and anticipates a nearly 50% rise in electric load demand by 2031, which supports its growth strategy and positioning in the utility industry.