Equatorial Energia SA (EQUEY) AI Stock Analysis

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Equatorial Energia SA

(OTC:EQUEY)

Rating:73Outperform

Price Target:

$7.50

▲(16.46%Upside)

Equatorial Energia SA's strong financial performance is the most significant factor, supported by solid revenue and cash flow growth. Technical analysis shows positive momentum, while valuation metrics indicate the stock is fairly valued. The overall score reflects these strengths, despite lacking specific earnings call insights.

Equatorial Energia SA (EQUEY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$7.89B

Dividend Yield2.9%

Average Volume (3M)1.78K

Price to Earnings (P/E)14.3

Beta (1Y)-0.02

Revenue Growth1.89%

EPS Growth15.15%

CountryUS

Employees11,123

SectorUtilities

Sector Strength74

IndustryRegulated Electric

Share Statistics

EPS (TTM)0.08

Shares Outstanding1,254,548,100

10 Day Avg. Volume4,147

30 Day Avg. Volume1,783

Financial Highlights & Ratios

PEG Ratio0.55

Price to Book (P/B)1.60

Price to Sales (P/S)0.00

P/FCF Ratio10.81

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Equatorial Energia SA Business Overview & Revenue Model

Company DescriptionEquatorial Energia S.A., through its subsidiaries, generates, transmits, and distributes electricity in Brazil. It operates through Energy Distribution, Transmission, Renewables, Distributed Generation, Sanitation, Energy Trading, Telecommunications, and Services segments. The company distributes electric energy in the 217 municipalities of Maranhão State with a concession area of approximately 332,000 square kilometers serving approximately 2.5 million consumers; 144 municipalities of Pará State with a concession area covering 1,248,000 square kilometers serving approximately 2.6 million consumers; 224 municipalities of Piauí State with a concession area covering 251,000 square kilometers serving approximately 1.3 million consumers; 102 municipalities of Alagoas State with a concession area covering 27,848 square kilometers serving approximately 1.2 million consumers; 16 municipalities of Amapá State serving approximately 209,000 consumers; and 72 municipalities of Rio de Janeiro State serving approximately 1.8 million consumers. It is also involved in the electricity trading business, as well as telecommunication, services, energy, and sanitation business. The company was founded in 1958 and is based in Brasília, Brazil.

How the Company Makes MoneyEquatorial Energia SA generates revenue primarily through the distribution, generation, and transmission of electricity. The company earns money by supplying electricity to residential, commercial, and industrial customers across several regions in Brazil. Revenue is generated from the sale of electricity to these end-users, as well as tariffs and fees associated with the transmission and distribution of power across the grid. Additionally, Equatorial Energia may engage in partnerships or projects aimed at expanding its energy infrastructure, thereby increasing its capacity for electricity generation and distribution, which can contribute to its earnings.

Equatorial Energia SA Earnings Call Summary

Earnings Call Date:May 14, 2025

(Q3-2024)

% Change Since: 0.31%|

Next Earnings Date:Aug 13, 2025

Earnings Call Sentiment Positive

The earnings call presented a strong financial and operational performance with significant growth in various segments, particularly in energy distribution and renewables. However, there are challenges with increased debt due to recent acquisitions and some impact on the transmission segment. The positive aspects, including robust EBITDA growth and successful capital raising, outweigh the negatives.

Q3-2024 Updates

Positive Updates

Capital Increase and Subscription Success

Approved a capital increase via private subscription totaling BRL 2.5 billion, successfully completed with 100% subscription in the first round.

Strong Operating Performance in Energy Distribution

Distributed energy showed significant growth, up 6.7% above Q3 '23, maintaining good collection levels and cost discipline.

Adjusted EBITDA Growth

Achieved an adjusted EBITDA of BRL 2.9 billion, up 16% compared to the same quarter last year.

Improvement in Distribution Segment

Gross margin for distribution grew by 15.3%, with adjusted EBITDA increasing by 20.8%.

Renewables Segment Growth

Adjusted EBITDA grew by 11.7% due to the start-up of new solar farms and surplus generation from wind farms.

Sanitation Segment Progress

Positive EBITDA of BRL 1.3 million with a significant increase in billed sewage savings and water coverage index.

Negative Updates

Debt Increase Due to SABESP Acquisition

Company's net debt increased by about BRL 4.4 billion due to the acquisition of a 15% stake in SABESP.

Transmission Segment Challenges

Adjusted regulatory EBITDA fell by 2.6%, although it would have grown by 2.4% after adjusting for a complementary AVC effect.

Renewables Curtailment Impact

Constraint of impact of 318-megawatt average, 36.2% of total generation, affecting the Serra do Mel wind farm complex.

Company Guidance

In the Q3 2024 earnings call for Equatorial (EQTL3.SA), the company reported a range of financial metrics and strategic developments. They announced a successful capital increase of BRL 2.5 billion, priced at BRL 32.50 per share, with full subscription in the first round. The company utilized these funds for partial repayment of commercial notes and issued incentivized debentures amounting to BRL 2.07 billion, optimizing their debt profile. Operating metrics included a 6.7% year-over-year growth in distributed energy and a fourth consecutive quarter with distribution volumes below the regulatory loss limit. Financially, Equatorial achieved a 16% increase in adjusted EBITDA, reaching BRL 2.9 billion, and a 25.4% rise in adjusted net profit compared to Q3 2023. Their net debt EBITDA ratio was maintained at 3.2x, with cash and cash equivalents totaling BRL 10.8 billion, offering a cash to short-term debt ratio of 2x. The company also highlighted a 20% reduction in investments due to the start-up of solar parks, while projecting continued financial discipline and strategic investment opportunities.

Equatorial Energia SA Financial Statement Overview

Summary

Equatorial Energia SA shows strong financial health with consistent revenue and net income growth. The balance sheet is stable with effective leverage management, and cash flow generation has improved significantly. The absence of EBIT data is a minor concern.

Income Statement

Very Positive

Equatorial Energia SA has demonstrated strong revenue growth with a 5.33% increase from 2023 to 2024. The gross profit margin stands at 25.16% for 2024, indicating solid profitability. However, the absence of EBIT data for 2024 prevents a complete analysis of operating efficiency. The net profit margin improved to 6.51% in 2024, reflecting enhanced bottom-line performance.

Balance Sheet

Positive

The company has a moderate debt-to-equity ratio of 2.14 in 2024, indicating a balanced leverage position. The equity ratio is 22.44%, showing a reasonable proportion of assets financed by equity, which suggests financial stability. Return on equity improved to 10.77%, highlighting effective use of equity capital.

Cash Flow

Very Positive

Free cash flow turned positive in 2024, reaching 4.21 billion, a significant turnaround from negative figures in previous years. The operating cash flow to net income ratio of 1.51 suggests strong cash generation relative to earnings. Free cash flow to net income ratio at 1.50 further supports robust cash flow management.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	43.17B	40.99B	26.22B	23.61B	17.37B
Gross Profit	10.86B	10.23B	7.65B	6.27B	5.47B
EBITDA	11.00B	9.72B	7.17B	6.21B	5.92B
Net Income	2.81B	2.08B	1.37B	3.69B	2.98B
Balance Sheet
Total Assets	116.41B	103.64B	90.62B	61.71B	44.12B
Cash, Cash Equivalents and Short-Term Investments	13.04B	12.24B	7.88B	10.37B	7.62B
Total Debt	55.93B	46.56B	41.30B	25.46B	17.82B
Total Liabilities	86.52B	78.36B	72.05B	47.11B	31.85B
Stockholders Equity	26.11B	21.09B	16.61B	12.76B	10.46B
Cash Flow
Free Cash Flow	4.21B	-6.01B	3.23B	330.16M	3.47B
Operating Cash Flow	4.25B	3.14B	3.47B	1.30B	3.48B
Investing Cash Flow	-14.19B	-7.49B	-8.74B	-4.74B	-2.44B
Financing Cash Flow	8.63B	5.80B	5.44B	4.21B	-608.28M

Equatorial Energia SA Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price6.44

Price Trends

50DMA

6.44

Negative

100DMA

5.92

Positive

200DMA

5.62

Positive

Market Momentum

MACD

0.04

Positive

RSI

46.75

Neutral

STOCH

17.36

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EQUEY, the sentiment is Neutral. The current price of 6.44 is below the 20-day moving average (MA) of 6.67, below the 50-day MA of 6.44, and above the 200-day MA of 5.62, indicating a neutral trend. The MACD of 0.04 indicates Positive momentum. The RSI at 46.75 is Neutral, neither overbought nor oversold. The STOCH value of 17.36 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for EQUEY.

Equatorial Energia SA Peers Comparison

Overall Rating

UnderperformOutperform

Sector (67)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EBR	75 Outperform	$16.89B	9.29	8.58%	7.67%	0.18%	99.46%
EQUEY	73 Outperform	$7.89B	14.25	12.20%	2.90%	1.89%	15.15%
EBR.B	73 Outperform	$16.89B	10.19	8.58%	0.98%	0.18%	99.46%
TXNM	70 Outperform	$5.21B	25.02	8.37%	2.90%	10.10%	149.78%
KEP	69 Neutral	$18.47B	4.86	13.42%	0.34%	0.21%	628.34%
ENIC	69 Neutral	$5.08B	27.64	3.67%	0.55%	-12.73%	-74.65%
Sector *	67 Neutral	$16.41B	16.95	4.63%	3.59%	4.77%	6.10%

* Utilities Sector Average

Performance Comparison

EQUEY

Equatorial Energia SA

6.44

0.75

13.18%

EBR.B

Centrais Elc Braz Pfb B Elbras

7.94

1.14

16.76%

KEP

Korea Electric Power

14.16

7.09

100.28%

TXNM

TXNM Energy

56.26

21.20

60.47%

EBR

Centrais Eletricas Brasileiras SA - Eletrobras

7.24

1.01

16.21%

ENIC

Enel Chile SA

3.61

1.02

39.38%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jun 06, 2025