Equatorial Energia SA (EQUEY) AI Stock Analysis

• Market Cap: $8.57B
• Dividend Yield: 4.94%
• Average Volume (3M): 339.00
• Price to Earnings (P/E): 14.8
• Beta (1Y): 0.03
• Revenue Growth: 5.98%
• EPS Growth: 27.35%
• Country: US
• Employees: 11,123
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Electric
• EPS (TTM): 0.07
• Shares Outstanding: 1,259,019,800
• 10 Day Avg. Volume: 236
• 30 Day Avg. Volume: 339
• PEG Ratio: 0.44
• Price to Book (P/B): 1.19
• Price to Sales (P/S): 0.72
• P/FCF Ratio: 7.40
• Enterprise Value/Market Cap: 12.45
• Enterprise Value/Revenue: 2.20
• Enterprise Value/Gross Profit: 9.85
• Enterprise Value/Ebitda: 8.49
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 76 Outperform
• Price Target: $8.00 ▲(12.99% Upside)

Equatorial Energia SA's overall stock score is driven by strong technical indicators and a positive earnings call, highlighting robust financial performance and strategic achievements. While the financial performance shows solid revenue growth, concerns about high leverage and declining cash flow growth slightly temper the outlook. The valuation remains attractive with a reasonable P/E ratio and a solid dividend yield.

Positive Factors

Consistent margins and revenue growth

Stable revenue growth and persistent EBIT/EBITDA margins indicate durable operational efficiency across regulated and generation businesses. This supports predictable cash generation from tariffed distribution revenues and underpins the company's ability to fund investments and meet obligations over the next several quarters.

Strong liquidity and extended debt maturity

Significant cash balances and longer average debt maturity materially reduce near-term refinancing risk and give management flexibility to fund capex, weather volatility, or strategic moves. This structural liquidity cushion supports stability in capital allocation and covenant management for months ahead.

Value-accretive transmission divestment

Realizing high multiple proceeds from transmission disposals demonstrates strong execution and portfolio optimization. Monetization of non-core assets improves capital allocation optionality, can accelerate deleveraging or fund higher-return investments, and permanently enhances balance sheet flexibility.

Negative Factors

High leverage

A debt-to-equity ratio above 2x signals elevated financial leverage that constrains strategic flexibility and raises interest and covenant sensitivity. Even with decent earnings, high gearing increases risk from operational setbacks or rate/tariff changes over the medium term, limiting resilience.

Declining free cash flow generation

A sharp drop in free cash flow growth and low operating-cash-to-income conversion reduce the firm's ability to self-fund capex, dividends, or deleveraging. This structural weakening of cash conversion may force recurring asset sales or additional financing over the coming quarters.

Renewables curtailment and weather exposure

Curtailment-driven renewable underperformance and region-specific weather disruptions create persistent volatility in generation and distribution earnings. This structural exposure can depress returns, raise maintenance and capex needs, and complicate medium-term planning and cash flow predictability.

Equatorial Energia SA Business Overview & Revenue Model

Company Description

Equatorial 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 Money

Equatorial Energia generates revenue through multiple streams, primarily from the distribution and sale of electricity. The company operates a network of electricity distribution companies, serving millions of consumers in Brazil. Revenue is largely derived from tariffs set by regulatory bodies, which allow the company to charge customers for the electricity consumed. Additionally, Equatorial Energia engages in power generation, selling electricity produced from its facilities to the national grid or directly to large consumers and other distributors. Significant partnerships with local governments and energy regulators also play a crucial role in ensuring stable revenue flows, as they help secure long-term contracts and favorable operating conditions. The company's investments in renewable energy projects further enhance its revenue potential while aligning with global trends toward sustainable energy solutions.

Equatorial Energia SA Financial Statement Overview

Summary

Equatorial Energia SA demonstrates solid revenue growth and profitability, with stable EBIT and EBITDA margins. However, the high debt-to-equity ratio and declining free cash flow growth pose potential risks. The company needs to focus on improving cash flow generation and managing leverage to enhance financial stability.

Income Statement

Equatorial Energia SA shows a solid revenue growth rate of 3.35% TTM, with consistent EBIT and EBITDA margins around 19.47% and 25.92% respectively. However, the gross profit margin has slightly decreased over time, indicating potential cost pressures. The net profit margin of 6.94% TTM is stable but shows room for improvement compared to historical highs.

Balance Sheet

The company maintains a high debt-to-equity ratio of 2.19 TTM, which is a potential risk factor. However, the return on equity is improving, reaching 12.29% TTM, indicating effective use of equity. The equity ratio remains moderate, suggesting balanced asset financing.

Cash Flow

Free cash flow growth has significantly declined by 69.43% TTM, raising concerns about cash generation. The operating cash flow to net income ratio is low at 0.19, indicating less cash generation relative to net income. However, the free cash flow to net income ratio is reasonable at 0.38, showing some ability to convert income into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	48.44B	43.17B	40.99B	26.22B	23.61B	17.37B
Gross Profit	10.83B	10.86B	10.23B	7.65B	6.27B	5.47B
EBITDA	12.56B	11.00B	9.72B	7.17B	6.21B	5.92B
Net Income	3.36B	2.81B	2.08B	1.37B	3.69B	2.98B
Balance Sheet
Total Assets	126.17B	116.41B	103.64B	90.62B	61.71B	44.12B
Cash, Cash Equivalents and Short-Term Investments	14.96B	13.04B	12.24B	7.88B	10.37B	7.62B
Total Debt	62.50B	55.93B	46.56B	41.30B	25.46B	17.82B
Total Liabilities	93.37B	86.52B	78.36B	72.05B	47.11B	31.85B
Stockholders Equity	28.55B	26.11B	21.09B	16.61B	12.76B	10.46B
Cash Flow
Free Cash Flow	1.55B	4.21B	-6.01B	3.23B	330.16M	3.47B
Operating Cash Flow	4.05B	4.25B	3.14B	3.47B	1.30B	3.48B
Investing Cash Flow	-9.83B	-14.19B	-7.49B	-8.74B	-4.74B	-2.44B
Financing Cash Flow	8.41B	8.63B	5.80B	5.44B	4.21B	-608.28M

Equatorial Energia SA Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 7.08
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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 7.08 is above the 20-day moving average (MA) of 7.00, above the 50-day MA of 7.08, and above the 200-day MA of 6.46, indicating a neutral trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 47.25 is Neutral, neither overbought nor oversold. The STOCH value of 14.88 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EQUEY	76 Outperform	$8.57B	14.80	13.91%	4.94%	5.98%	27.35%
CEPU	76 Outperform	$2.51B	10.10	13.07%	2.00%	-4.16%	-40.47%
EDN	73 Outperform	$1.26B	6.39	13.91%	―	2.98%	―
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
ENIC	56 Neutral	$5.98B	88.24	1.30%	5.63%	-25.78%	-91.93%