Centerpoint Energy (CNP) AI Stock Analysis

• Market Cap: $24.67B
• Dividend Yield: 2.33%
• Average Volume (3M): 5.09M
• Price to Earnings (P/E): 26.3
• Beta (1Y): 0.24
• Revenue Growth: 4.84%
• EPS Growth: -11.24%
• Country: US
• Employees: 8,872
• Sector: Utilities
• Sector Strength: 56
• Industry: General Utilities
• EPS (TTM): 0.29
• Shares Outstanding: 652,864,870
• 10 Day Avg. Volume: 4,991,365
• 30 Day Avg. Volume: 5,090,009
• PEG Ratio: 1.31
• Price to Book (P/B): 1.91
• Price to Sales (P/S): 2.36
• P/FCF Ratio: -8.60
• Enterprise Value/Market Cap: 1.85
• Enterprise Value/Revenue: 5.08
• Enterprise Value/Gross Profit: 11.54
• Enterprise Value/Ebitda: 13.30
• 1Y Price Target: $40.33
• Price Target Upside: 7.43% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10

• Rating: 67 Neutral
• Price Target: $41.00 ▲(9.22% Upside)

Centerpoint Energy's overall stock score reflects strong financial performance and strategic growth initiatives, particularly in the Houston Electric service territory. However, high leverage and cash flow challenges pose risks. The technical indicators suggest a positive trend, while the valuation indicates potential overvaluation. The earnings call provided positive guidance, supporting future growth prospects.

Positive Factors

Capital Expenditure Plans

Centerpoint Energy Inc is poised to detail at least $2Bn of incremental electric-transmission capex, indicating potential growth opportunities.

Financial Growth Prospects

CNP's 8% NT EPS growth through 2025 and 6-8% LT EPS growth biased to the top end and lack of external financing make it attractive in the utility sector.

Regulatory Approvals

A major regulatory milestone with the approval of three 765kV import paths in Texas supports Centerpoint Energy Inc's upside capex assumption, positioning the company to benefit significantly.

Negative Factors

Balance Sheet Weakness

Valuation keeps us on the sidelines.

Equity Issuance Uncertainty

Management alluded to the potential to avoid incremental equity issuance through 2030, depending on capex and transaction price of the Ohio gas LDC.

Valuation Concerns

Analyst maintains a Neutral rating on CNP given leading valuation and comparatively weak balance sheet, despite attractive organic growth.

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 generates revenue through multiple streams, primarily by providing utility services. The main revenue sources include regulated electric and natural gas distribution, where the company charges customers based on usage and rates set by public utility commissions. Additionally, CenterPoint earns money from the sale of electric generation and transmission services, as well as natural gas procurement and transportation. The company also participates in infrastructure projects, such as the development of renewable energy sources, which can provide additional revenue through long-term contracts and partnerships. Key partnerships with energy suppliers and investments in technology for smart grids further enhance its revenue potential. Regulatory approvals and rate adjustments are critical factors that influence its financial performance.

Centerpoint Energy Financial Statement Overview

Summary

Centerpoint Energy shows strong revenue growth and solid operational efficiency with healthy EBIT and EBITDA margins. However, declining profit margins and high leverage pose potential risks. The balance sheet reflects significant debt levels, necessitating careful management to maintain financial stability. Cash flow challenges persist, with negative free cash flow and reduced operating cash flow coverage, indicating a need for strategic improvements in cash management.

Income Statement

Centerpoint Energy shows a strong revenue growth rate of 43.6% in the TTM, indicating robust top-line expansion. However, the gross profit margin has decreased from 46% in 2024 to 33.7% in the TTM, suggesting increased cost pressures. The net profit margin also declined slightly from 11.8% to 10.4%, reflecting some challenges in maintaining profitability. Despite these pressures, the EBIT and EBITDA margins remain healthy at 22.7% and 38.5%, respectively, indicating efficient operational management.

Balance Sheet

The company's debt-to-equity ratio is relatively high at 1.96, indicating significant leverage, which could pose risks if not managed carefully. Return on equity has decreased from 9.5% in 2024 to 8.7% in the TTM, showing a slight decline in shareholder returns. The equity ratio stands at 25%, suggesting a moderate level of financial stability. Overall, the balance sheet reflects a need for cautious debt management to ensure long-term financial health.

Cash Flow

Operating cash flow has decreased significantly in the TTM, with a coverage ratio of 0.46, down from 0.53 in 2024, indicating reduced cash generation relative to net income. Free cash flow remains negative, with a concerning free cash flow to net income ratio of -1.84, highlighting ongoing cash flow challenges. While there was a 15.7% growth in free cash flow, the overall cash flow position requires improvement to support sustainable operations.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	8.98B	8.64B	8.70B	9.32B	8.35B	7.42B
Gross Profit	3.95B	3.98B	3.69B	3.40B	3.21B	2.93B
EBITDA	3.43B	3.49B	3.19B	3.23B	2.62B	2.28B
Net Income	936.00M	1.02B	917.00M	1.06B	1.49B	-773.00M
Balance Sheet
Total Assets	44.10B	43.77B	39.72B	38.55B	37.68B	33.47B
Cash, Cash Equivalents and Short-Term Investments	776.00M	585.00M	631.00M	584.00M	1.67B	1.02B
Total Debt	21.62B	20.96B	18.62B	16.86B	16.10B	13.44B
Total Liabilities	33.08B	33.10B	30.05B	28.50B	28.26B	25.12B
Stockholders Equity	11.02B	10.67B	9.67B	10.04B	9.41B	8.35B
Cash Flow
Free Cash Flow	-3.03B	-2.37B	-524.00M	-2.61B	-3.14B	-601.00M
Operating Cash Flow	2.00B	2.14B	3.88B	1.81B	22.00M	2.00B
Investing Cash Flow	-4.23B	-4.49B	-4.23B	-1.63B	-1.85B	-1.26B
Financing Cash Flow	2.25B	2.27B	374.00M	-345.00M	1.92B	-834.00M

Centerpoint Energy Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 37.54
• 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 CNP, the sentiment is Neutral. The current price of 37.54 is below the 20-day moving average (MA) of 37.87, above the 50-day MA of 37.39, and above the 200-day MA of 34.98, indicating a neutral trend. The MACD of -0.03 indicates Positive momentum. The RSI at 44.26 is Neutral, neither overbought nor oversold. The STOCH value of 57.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CNP.

Centerpoint Energy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AEE	75 Outperform	$27.21B	22.10	10.29%	2.80%	17.32%	3.35%
FE	73 Outperform	$25.11B	19.19	10.33%	4.02%	6.44%	49.07%
PPL	71 Outperform	$26.59B	27.03	6.96%	2.97%	6.62%	17.35%
CMS	68 Neutral	$21.42B	21.11	12.48%	3.03%	8.25%	4.37%
CNP	67 Neutral	$24.67B	26.33	8.76%	2.33%	4.84%	-11.24%
Sector *	66 Neutral	$17.24B	17.99	5.60%	3.67%	6.63%	11.55%
ES	60 Neutral	$23.58B	27.34	5.63%	4.67%	14.44%	―

Centerpoint Energy Corporate Events

CenterPoint Energy Completes $1 Billion Convertible Notes Sale

On July 31, 2025, CenterPoint Energy, Inc. completed the sale of $1 billion in 3.00% Convertible Senior Notes due 2028. The Notes were sold in a private offering and are convertible under certain conditions, with a conversion rate initially set at 21.4477 shares of common stock per $1,000 principal amount of Notes. The Notes will mature on August 1, 2028, unless converted or repurchased earlier.

CenterPoint Energy Reports Q2 2025 Earnings

On July 24, 2025, CenterPoint Energy reported its second quarter 2025 earnings, highlighting a net income of $198 million, or $0.30 per diluted share on a GAAP basis, compared to $0.36 in the same period of 2024. The company increased its 10-year capital investment plan by $500 million, reaching a total of $53 billion through 2030, and reiterated its 2025 non-GAAP EPS guidance. CenterPoint also accomplished all commitments related to Phase II of the Greater Houston Resiliency Initiative ahead of schedule, resulting in a significant reduction in outage minutes for customers.

Centerpoint Energy Invests in Renewable Energy Projects

Centerpoint Energy announced a strategic initiative to enhance its infrastructure by investing in renewable energy projects. This move is expected to bolster the company’s commitment to sustainability and improve its competitive position in the energy market.