Centerpoint Energy (CNP) AI Stock Analysis

• Market Cap: $24.45B
• Dividend Yield: 2.21%
• Average Volume (3M): 5.51M
• Price to Earnings (P/E): 25.2
• Beta (1Y): 0.27
• Revenue Growth: 4.76%
• EPS Growth: 4.08%
• Country: US
• Employees: 8,872
• Sector: Utilities
• Sector Strength: 83
• Industry: General Utilities
• EPS (TTM): 0.53
• Shares Outstanding: 652,728,400
• 10 Day Avg. Volume: 5,635,516
• 30 Day Avg. Volume: 5,514,182
• PEG Ratio: -4.56
• Price to Book (P/B): 2.28
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -9.25
• 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: $38.89
• Price Target Upside: 4.49% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11

• Rating: 67 Neutral
• Price Target: ―

CenterPoint Energy presents a mixed outlook. The company maintains stable operational performance with strong income margins and low leverage but faces revenue growth and cash flow challenges. Technical analysis signals a positive trend, while valuation metrics are fair. The recent earnings call and corporate events highlight strategic growth plans and robust earnings, contributing positively to the score.

Positive Factors

Capital Plan

The company raised its 10-year capital plan by $1.0bn to $48.5bn and signaled incremental capital increases, showing a commitment to growth and expansion.

Earnings Growth

CNP has transformed into one of the premier utilities with an 8% EPS growth through 2025 and 6-8% long-term EPS growth, making it an attractive option in the utility sector.

Infrastructure Investments

A robust 3Q update is set to showcase significant upsides from infrastructure investments and increasing data-center demand.

Regulatory Clarity

With significant regulatory/political clarity achieved, investors have been able to turn their attention to the company's already robust regulated growth story and visible additional upside opportunities.

Negative Factors

Earnings Decline

The decline in earnings year-over-year is driven by factors such as higher operating and maintenance costs, higher operating expenses, and higher debt balances.

Operational Costs

The ~$0.03 decline year-over-year is driven by higher O&M including storms, higher OpEx, drag from transition bonds rolling off, and higher drag at Parent/Other largely driven by higher debt balances as well as dilution.

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 exhibits a strong income statement with stable margins but faces challenges with declining revenue growth. The balance sheet is stable with low leverage, although asset data is incomplete for TTM. Cash flow issues are notable due to high capital expenditures, impacting free cash flow negatively.

Income Statement

Centerpoint Energy has experienced fluctuating revenues with a recent decline in the TTM period. The gross profit margin is healthy at approximately 47.34% for TTM. Net profit margin is also strong at 16.03% in TTM. However, there is a noticeable drop in revenue and net income compared to the previous year, indicating a potential concern in revenue growth. The EBIT margin and EBITDA margin are stable, reflecting efficient operations.

Balance Sheet

The company's debt-to-equity ratio stands at 0.17 in TTM, indicating a relatively low leverage. Return on equity is modest at 8.82% in TTM, suggesting reasonable profitability. The equity ratio is not calculable due to missing total assets in the TTM period, but historical data shows a steady equity position. Overall, the balance sheet reflects a stable financial structure with manageable debt levels.

Cash Flow

Free cash flow is negative at -$2.695 billion in TTM, marking a concern for cash flow stability. Operating cash flow to net income ratio is 2.08 in TTM, showing strong cash generation relative to net income. However, the significant capital expenditures impact cash reserves negatively. The free cash flow to net income ratio is also negative, highlighting challenges in converting income to cash.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
8.94B	8.64B	8.70B	9.32B	8.35B	7.42B
	Gross Profit
4.02B	3.98B	3.69B	3.40B	3.21B	2.93B
	EBIT
2.02B	1.99B	1.76B	1.57B	1.36B	-168.00M
	EBITDA
3.51B	3.49B	3.19B	3.23B	2.62B	2.28B
	Net Income Common Stockholders
966.00M	1.02B	917.00M	1.06B	668.00M	-591.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
637.00M	585.00M	631.00M	584.00M	1.67B	147.00M
	Total Assets
40.20B	43.77B	39.72B	38.55B	37.68B	33.47B
	Total Debt
19.15B	20.96B	18.62B	16.86B	16.10B	13.44B
	Net Debt
18.99B	20.94B	18.53B	16.78B	15.87B	13.29B
	Total Liabilities
30.20B	33.10B	30.05B	28.50B	28.26B	25.12B
	Stockholders Equity
10.00B	10.67B	9.67B	10.04B	9.41B	8.35B
Cash Flow		Free Cash Flow
-2.69B	-2.37B	-524.00M	-2.61B	-3.14B	-601.00M
	Operating Cash Flow
2.01B	2.14B	3.88B	1.81B	22.00M	2.00B
	Investing Cash Flow
-3.88B	-4.49B	-4.23B	-1.63B	-1.85B	-1.26B
	Financing Cash Flow
2.95B	2.27B	374.00M	-345.00M	1.92B	-834.00M

Centerpoint Energy Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 37.22
• 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 CNP, the sentiment is Positive. The current price of 37.22 is below the 20-day moving average (MA) of 37.75, above the 50-day MA of 36.67, and above the 200-day MA of 31.69, indicating a neutral trend. The MACD of 0.15 indicates Positive momentum. The RSI at 50.05 is Neutral, neither overbought nor oversold. The STOCH value of 53.15 is Neutral, 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
PPL	74 Outperform	$25.79B	26.05	7.00%	3.00%	5.62%	30.02%
CMS	71 Outperform	$21.53B	21.30	12.53%	2.90%	5.87%	3.59%
EIX	71 Outperform	$22.32B	8.23	17.93%	5.51%	5.36%	209.92%
ES	71 Outperform	$24.08B	28.30	5.63%	4.42%	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%	2.21%	4.76%	4.08%
Sector *	63 Neutral	$8.63B	10.24	4.67%	4.35%	3.78%	-12.74%

Centerpoint Energy Corporate Events

CenterPoint Energy Reports Q1 2025 Earnings and Growth Plans

CenterPoint Energy announced its first quarter 2025 earnings, reporting a net income of $297 million, or $0.45 per diluted share on a GAAP basis, and $0.53 per share on a non-GAAP basis. Despite a slight decrease from the previous year due to the sale of its Louisiana and Mississippi gas distribution businesses, the company reiterated its full-year guidance and increased its 10-year capital investment plan by $1 billion to $48.5 billion. The company highlighted significant growth in electric load demand in Houston, supporting its forecast for a 50% load growth by 2031. CenterPoint is committed to expanding its electric infrastructure under the Greater Houston Resiliency Initiative, aiming to build a resilient coastal grid and maintain its financial performance for the benefit of stakeholders.

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.