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Evergy (EVRG)
NASDAQ:EVRG

Evergy (EVRG) AI Stock Analysis

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Evergy

(NASDAQ:EVRG)

Rating:68Neutral
Price Target:
$72.00
▲(8.71%Upside)
Evergy maintains a solid financial foundation and shows potential for long-term growth through strategic initiatives and regulatory support. However, near-term headwinds from cash flow challenges and weak market momentum may limit immediate upside.
Positive Factors
Growth Prospects
Evergy's growth prospects are now better aligned with its peers, following revisions to its capital plan.
Regulatory Environment
Evergy is expected to benefit from an improving regulatory backdrop in their Missouri jurisdiction.
Total Return Opportunity
Including its above-average 4.1% dividend yield, EVRG shares provide investors with a compelling ~17% total return.
Negative Factors
Financing Challenges
Financing needs could test credit metrics, but junior subordinated notes (JSNs) provide a means to mitigate the pressure on FFO to Debt ratios.
Valuation Concerns
The implied valuation in Kansas appears overly punitive at a ~24% discount.

Evergy (EVRG) vs. SPDR S&P 500 ETF (SPY)

Evergy Business Overview & Revenue Model

Company DescriptionEvergy, Inc., together with its subsidiaries, engages in the generation, transmission, distribution, and sale of electricity in Kansas and Missouri, the United States. It generates electricity through coal, hydroelectric, landfill gas, uranium, and natural gas and oil sources, as well as solar, wind, other renewable sources. The company has approximately 10,100 circuit miles of transmission lines; 39,800 circuit miles of overhead distribution lines; and 13,000 circuit miles of underground distribution lines. It serves approximately 1,620,400 customers, including residences, commercial firms, industrials, municipalities, and other electric utilities. Evergy, Inc. was incorporated in 2017 and is headquartered in Kansas City, Missouri.
How the Company Makes MoneyEvergy makes money primarily through the generation, transmission, and distribution of electricity to a diverse customer base in its service areas. The company's revenue model is centered around charging customers for the electricity consumed, which is measured in kilowatt-hours (kWh). Rates are typically regulated by state public utility commissions, ensuring a balance between affordability for consumers and fair returns for the company. Key revenue streams include residential, commercial, and industrial electricity sales. Additionally, Evergy invests in renewable energy projects and infrastructure upgrades, which may be supported by government incentives or partnerships aimed at fostering sustainable energy development. The company's financial performance is also influenced by factors such as weather conditions, energy demand, and regulatory changes.

Evergy Earnings Call Summary

Earnings Call Date:May 08, 2025
(Q1-2025)
|
% Change Since: -3.92%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
The earnings call demonstrated a mix of stability in earnings and robust growth potential through customer pipeline expansion and legislative support, offset by challenges like lower industrial demand and weather-related impacts. The sentiment balances positive long-term growth with some short-term pressures.
Q1-2025 Updates
Positive Updates
Stable Earnings Year-Over-Year
First quarter adjusted earnings were $0.54 per share, consistent with the same period last year, driven by regulated investments offsetting lower industrial demand.
Reaffirmed Earnings Guidance
Evergy reaffirmed its 2025 adjusted EPS guidance range of $3.92 to $4.12 per share, with a midpoint of $4.02.
Strong Operational Performance
The generation team achieved strong availability and set a new winter peak load record of over 48 gigawatts in the Southwest Power Pool.
Legislative Success
Constructive bills passed in Kansas and Missouri to enhance regulatory frameworks and support infrastructure investment.
Robust Customer Pipeline
Pipeline expanded by 1 gigawatt to 12.2 gigawatts, with 300 megawatts moved from finalizing agreements to actively building.
Integrated Resource Plan Update
The 2025 IRP adds 2.1 gigawatts of new generation from 2025 to 2035, reflecting increased demand growth expectations.
Negative Updates
Lower Industrial Demand
Industrial demand was affected by a large unplanned maintenance shutdown at a major customer's refinery.
Weather-Related Sales Impact
Two heavy snow events limited the business activity in January and February, impacting sales.
Interest and Depreciation Expense Increase
Higher interest and depreciation expenses due to increased infrastructure investments negatively impacted earnings.
Weather-Normalized Demand Decline
Weather-normalized demand decreased by 3%, despite a 2.7% absolute demand growth.
Company Guidance
During the Evergy Q1 2025 Earnings Conference Call, the company reaffirmed its 2025 adjusted EPS guidance range of $3.92 to $4.12, with a midpoint at $4.02 per share. Despite a challenging first quarter, where adjusted earnings remained flat year-over-year at $0.54 per share, Evergy anticipates achieving the midpoint of its EPS target by year-end, supported by operational efficiencies and a rebound in demand growth. Retail demand grew by 2.7% and heating degree days increased by 18%, although the benefits were partially offset by block pricing and industrial outages. The company also maintained its long-term EPS growth target of 4% to 6% through 2029, driven by strong operational performance and strategic regulatory frameworks in Kansas and Missouri. Evergy's robust customer pipeline, which increased by 1 gigawatt to 12.2 gigawatts, underpins its future growth, with major projects anticipated to enhance demand growth significantly post-2026.

Evergy Financial Statement Overview

Summary
Evergy shows strong profitability with a stable balance sheet and efficient cost management, highlighted by an increased net profit margin and a lower debt-to-equity ratio. However, the company faces challenges with negative free cash flow due to high capital expenditures.
Income Statement
75
Positive
Evergy demonstrates strong profitability with a consistent increase in net income and a solid EBIT margin. The net profit margin improved from 13.3% in 2023 to 14.9% in 2024, indicating efficient cost management. However, revenue growth has been inconsistent over the years, with a slight decline from 2022 to 2023 but a rebound in 2024.
Balance Sheet
70
Positive
The balance sheet is healthy with a strong equity base. The debt-to-equity ratio decreased to 0.052 in 2024, showcasing improved leverage management. However, the equity ratio slightly decreased from 29.96% in 2023 to 30.42% in 2024, reflecting a stable capital structure. Return on equity is robust, enhancing shareholder value.
Cash Flow
65
Positive
Operating cash flow remains strong but free cash flow has been negative, primarily due to high capital expenditures. The operating cash flow to net income ratio is healthy, indicating good cash conversion from earnings. However, the negative free cash flow to net income ratio suggests a need for careful capital management.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
5.85B5.51B5.86B5.59B4.91B
Gross Profit
3.03B1.69B2.63B2.63B2.39B
EBIT
1.47B1.28B1.27B1.35B1.14B
EBITDA
2.64B2.42B2.19B2.31B2.04B
Net Income Common Stockholders
873.50M731.30M752.70M879.70M618.30M
Balance SheetCash, Cash Equivalents and Short-Term Investments
22.00M27.70M25.20M26.20M144.90M
Total Assets
32.28B32.24B29.49B28.52B27.11B
Total Debt
14.07B13.27B12.04B11.17B10.32B
Net Debt
14.05B13.25B12.01B11.14B10.18B
Total Liabilities
22.29B22.56B20.00B19.28B18.40B
Stockholders Equity
9.81B9.66B9.48B9.24B8.73B
Cash FlowFree Cash Flow
-352.90M-353.80M-364.60M-620.80M193.50M
Operating Cash Flow
1.98B1.98B1.80B1.35B1.75B
Investing Cash Flow
-2.26B-2.47B-2.15B-1.91B-1.53B
Financing Cash Flow
280.30M494.00M349.30M443.40M-98.40M

Evergy Technical Analysis

Technical Analysis Sentiment
Positive
Last Price66.23
Price Trends
50DMA
66.66
Negative
100DMA
65.16
Positive
200DMA
62.29
Positive
Market Momentum
MACD
-0.30
Positive
RSI
49.67
Neutral
STOCH
52.95
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EVRG, the sentiment is Positive. The current price of 66.23 is below the 20-day moving average (MA) of 66.53, below the 50-day MA of 66.66, and above the 200-day MA of 62.29, indicating a neutral trend. The MACD of -0.30 indicates Positive momentum. The RSI at 49.67 is Neutral, neither overbought nor oversold. The STOCH value of 52.95 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EVRG.

Evergy Risk Analysis

Evergy disclosed 26 risk factors in its most recent earnings report. Evergy reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 2 New Risks
1.
Artificial intelligence (AI) is an emerging area of technology that has the potential to impact various aspects of the Evergy Companies' business operations and customer interactions. Q4, 2024
2.
Evergy is subject to wildfire risk. Q4, 2024

Evergy Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
LNLNT
78
Outperform
$15.99B21.4810.71%3.20%2.46%5.66%
CMCMS
71
Outperform
$20.88B20.6612.53%3.00%5.87%3.59%
FEFE
70
Neutral
$24.30B22.408.69%4.04%7.92%1.54%
EIEIX
69
Neutral
$21.79B8.0417.93%5.68%5.36%209.92%
68
Neutral
$15.24B17.458.95%3.98%5.53%23.00%
PNPNW
65
Neutral
$10.93B18.199.08%3.91%10.69%12.37%
64
Neutral
$8.54B10.244.67%4.36%4.12%-13.19%
* Utilities Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
EVRG
Evergy
66.23
15.81
31.36%
LNT
Alliant Energy
61.36
13.63
28.56%
CMS
CMS Energy
69.81
11.18
19.07%
EIX
Edison International
57.10
-12.97
-18.51%
FE
FirstEnergy
42.10
5.13
13.88%
PNW
Pinnacle West Capital
91.56
18.85
25.92%

Evergy Corporate Events

Private Placements and FinancingBusiness Operations and Strategy
Evergy Enters Equity Distribution Agreement for $1.2 Billion
Positive
May 9, 2025

On May 8, 2025, Evergy, Inc. entered into an equity distribution agreement with several financial institutions, including Barclays, BofA Securities, Citigroup, and others, to facilitate the offering and sale of up to $1.2 billion in common stock. The agreement allows for sales through ordinary brokers’ transactions on the Nasdaq Stock Market and includes provisions for forward sale agreements. The company intends to use any net proceeds for general corporate purposes, potentially investing in its subsidiaries. This strategic move could enhance Evergy’s financial flexibility and support its growth initiatives, impacting its market positioning and stakeholder interests.

DividendsFinancial Disclosures
Evergy Announces Q1 2025 Financial Results and Dividend
Neutral
May 8, 2025

On May 8, 2025, Evergy announced its first quarter 2025 financial results, reporting GAAP earnings of $125.0 million, or $0.54 per share, a slight increase from $122.7 million, or $0.53 per share, in the same period of 2024. The company reaffirmed its 2025 earnings guidance and declared a quarterly dividend of $0.6675 per share. Evergy’s performance was influenced by the recovery of regulated investments, though partially offset by lower demand due to an unplanned customer maintenance shutdown and other factors. The company also highlighted legislative advancements in Missouri and Kansas that support infrastructure investment and its efforts to gain approval for new generation projects.

Executive/Board Changes
Evergy Promotes Matt Gummig to Chief Accounting Officer
Positive
Mar 27, 2025

Evergy has announced the promotion of Matt Gummig to Vice President, Chief Accounting Officer, and principal accounting officer, effective April 2, 2025. This follows his interim appointment in December 2024. Mr. Gummig’s new role includes a comprehensive compensation package, participation in incentive plans, and eligibility for severance benefits, reflecting Evergy’s commitment to strengthening its leadership team.

DividendsBusiness Operations and StrategyFinancial Disclosures
Evergy Reports Strong 2024 Financial Results and Future Plans
Positive
Feb 27, 2025

Evergy reported its 2024 financial results, showing an increase in GAAP earnings per share to $3.79 from $3.17 in 2023, and adjusted earnings per share to $3.81 from $3.54. The company declared a quarterly dividend of $0.6675 per share and raised its capital investment plan for 2025-2029 to $17.5 billion. Evergy reaffirmed its 2025 earnings guidance and highlighted the positive impact of new retail rates and infrastructure investments, despite challenges such as mild weather and increased expenses. The passage of House Bill 2527 in Kansas and a settlement agreement in Missouri reflect strong regulatory support and stakeholder relationships, positioning Evergy for future growth.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.