Redeia Corporación (RED) AI Stock Analysis

• Market Cap: €8.35B
• Dividend Yield: 4.27%
• Average Volume (3M): 1.48M
• Price to Earnings (P/E): 16.8
• Beta (1Y): 0.20
• Revenue Growth: -23.15%
• EPS Growth: -39.13%
• Country: ES
• Employees: 1,962
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Electric
• EPS (TTM): 0.22
• Shares Outstanding: 541,080,000
• 10 Day Avg. Volume: 1,572,480
• 30 Day Avg. Volume: 1,475,781
• PEG Ratio: 0.44
• Price to Book (P/B): 1.56
• Price to Sales (P/S): 4.95
• P/FCF Ratio: 0.00
• 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: €16.73
• Price Target Upside: 8.01% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): 0.94
• Revenue Forecast (FY): €1.73B

• Rating: 62 Neutral
• Price Target: €16.50 ▲(6.52% Upside)
• Action: Reiterated Date: 02/28/26
• Date: Action: Reiterated 02/28/26

The score is driven primarily by solid profitability and improved leverage, offset by weak and volatile free cash flow in recent periods. Technicals are neutral with modest near-term support but below the 200-day average. Valuation is supportive due to a reasonable P/E and a ~4.1% dividend yield.

Positive Factors

Regulated transmission and fiber leasing

Redeia's core revenues are anchored in regulated electricity transmission tariffs and recurring fiber leasing agreements. This durable mix creates predictable cash flows and long-term customer contracts, supporting steady utility-like revenue and resilience versus cyclical markets.

Consistent high profitability

The company has delivered robust net margins and operating profitability across the period, with earnings recovering in 2025. Durable margin strength in a regulated framework supports reinvestment, dividend capacity and buffering of cyclical revenue swings over months.

Improved leverage and equity base

Leverage has meaningfully improved from earlier highs and equity has grown, while ROE remained positive. This stronger capital structure increases balance-sheet resilience, reduces refinancing strain and permits continued investment in grid and fiber infrastructure.

Negative Factors

Volatile and weak free cash flow

Operating cash flow is positive but conversion to free cash flow is inconsistent, with recent FCF turning negative then zero. Persistent weak FCF signals heavy capex or working-capital pressure, limiting cash available for debt reduction, dividends or growth initiatives.

Ongoing reliance on debt financing

Although leverage improved, the company still depends on debt to fund infrastructure. Meaningful indebtedness leaves Redeia sensitive to rising interest costs, which can increase financing expenses and constrain capital allocation under tighter market conditions.

Uneven revenue growth and inconsistent margins

Revenue trends have been mixed with declines and rebounds, and reported gross margins include inconsistent figures that reduce confidence in trend assessment. This complicates forecasting cash flow durability and planning for long-term network investment cycles.

Redeia Corporación Business Overview & Revenue Model

Company Description

Redeia Corporación, S.A. engages in the electricity transmission, and system operation and management of the transmission network for the electricity system in Spain and internationally. Its transmission network comprises approximately 45,019 kilometers; and has 94,221 MVA of transformation capacity. The company also provides advisory, engineering, and construction services; and telecommunications, financing, reinsurance, line and substation maintenance, technical consultancy, and satellite telecommunications services. In addition, it manages and constructs energy storage facilities and the water cycle; acquires, holds, manages, and administers equity securities; operates satellite communications system and renders space segment services for the geostationary orbital slots; and sells and leases satellites and spatial capacity. The company was incorporated in 1985 and is based in Alcobendas, Spain.

How the Company Makes Money

Redeia Corporación generates revenue through multiple streams, primarily from the transmission of electricity and the provision of telecommunications services. Its core revenue model is based on regulated tariffs for electricity transmission, which are set by government authorities and adjusted periodically. Additionally, Redeia earns income by leasing its fiber optic infrastructure to telecommunications providers, allowing them to deliver internet and communication services. The company has established significant partnerships with major telecommunications operators, which further enhances its revenue potential. Furthermore, Redeia benefits from the increasing demand for renewable energy solutions, as it positions itself as a key player in facilitating the integration of green energy into the national grid, leading to potential growth in revenue linked to sustainability initiatives.

Redeia Corporación Financial Statement Overview

Summary

Strong, utility-like profitability and improved leverage versus earlier years support the profile, but the score is held back by volatile cash generation: free cash flow turned negative in 2023–2024 and was reported as zero in 2025, indicating weaker cash quality and higher funding needs.

Income Statement

Profitability is a clear strength, with consistently strong net margins (~23%–35%) and solid operating profitability across the period. Revenue growth has been uneven (declines in 2020–2021 and 2024, followed by a rebound to ~11% in 2025), but earnings recovered meaningfully in 2025 versus 2024. A key weakness is inconsistency/quality in the provided gross margin figures (several years above 100%), which reduces confidence in cost-of-revenue detail and makes trend interpretation less clean.

Balance Sheet

Leverage is moderate-to-elevated for a regulated utility profile: debt-to-equity improved from ~2.0x (2020–2021) to ~1.07x–1.29x (2023–2025), but remains meaningful. Equity has grown since 2021, supporting balance-sheet resilience, and return on equity has been positive throughout (roughly ~7%–19%), improving again in 2025 versus 2024. The main risk remains reliance on debt capital and sensitivity to financing costs.

Cash Flow

Cash generation is volatile. Operating cash flow is positive each year, but the cash conversion versus earnings is inconsistent (coverage generally below ~0.55x in 2021–2025, after being stronger in 2020). Free cash flow is a major weak point: strong positive in 2020–2022, then negative in 2023–2024, and reported as zero in 2025, resulting in weak/negative free-cash-flow-to-net-income in multiple years. This pattern suggests heavy investment cycles and/or working-capital swings pressuring cash available to shareholders and debt reduction.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.66B	1.59B	2.06B	2.02B	1.95B
Gross Profit	1.04B	1.63B	2.08B	2.04B	1.99B
EBITDA	1.20B	1.28B	1.52B	1.48B	1.53B
Net Income	505.60M	368.44M	689.64M	664.73M	680.63M
Balance Sheet
Total Assets	15.35B	15.09B	14.48B	14.78B	13.98B
Cash, Cash Equivalents and Short-Term Investments	602.42M	923.26M	714.66M	1.55B	1.60B
Total Debt	6.77B	6.40B	5.80B	6.24B	7.32B
Total Liabilities	8.20B	9.83B	8.96B	9.89B	10.30B
Stockholders Equity	5.25B	5.15B	5.41B	4.79B	3.63B
Cash Flow
Free Cash Flow	0.00	-123.00M	-464.35M	1.03B	1.05B
Operating Cash Flow	1.01B	955.63M	491.90M	1.57B	1.61B
Investing Cash Flow	-717.50M	-947.38M	-66.47M	-1.64B	-537.64M
Financing Cash Flow	-636.80M	324.46M	-547.20M	-708.19M	22.32M

Redeia Corporación Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 15.49
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ES:RED, the sentiment is Neutral. The current price of 15.49 is below the 20-day moving average (MA) of 15.61, above the 50-day MA of 15.17, and below the 200-day MA of 16.12, indicating a neutral trend. The MACD of 0.27 indicates Positive momentum. The RSI at 53.94 is Neutral, neither overbought nor oversold. The STOCH value of 46.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ES:RED.

Redeia Corporación Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NTGY	69 Neutral	€25.65B	12.11	22.84%	6.66%	2.66%	1.26%
ENG	67 Neutral	€4.02B	11.87	3.85%	7.01%	5.35%	―
IBE	67 Neutral	€132.22B	21.48	11.50%	2.92%	0.50%	-19.06%
ANE	66 Neutral	€7.07B	10.95	13.06%	2.02%	2.05%	307.60%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
ELE	63 Neutral	€36.31B	16.65	26.20%	4.32%	-2.54%	103.14%
RED	62 Neutral	€8.35B	16.81	10.14%	4.27%	-23.15%	-39.13%