MGE Energy (MGEE) AI Stock Analysis

• Market Cap: $3.02B
• Dividend Yield: 2.36%
• Average Volume (3M): 135.28K
• Price to Earnings (P/E): 22.1
• Beta (1Y): 0.28
• Revenue Growth: 8.26%
• EPS Growth: 12.47%
• Country: US
• Employees: 717
• Sector: Utilities
• Sector Strength: 65
• Industry: Diversified Utilities
• EPS (TTM): 0.64
• Shares Outstanding: 36,541,847
• 10 Day Avg. Volume: 172,661
• 30 Day Avg. Volume: 135,282
• PEG Ratio: 1.80
• Price to Book (P/B): 2.73
• Price to Sales (P/S): 3.85
• P/FCF Ratio: -35.82
• Enterprise Value/Market Cap: 1.28
• Enterprise Value/Revenue: 5.30
• Enterprise Value/Gross Profit: 9.45
• Enterprise Value/Ebitda: 12.82
• 1Y Price Target: $77.00
• Price Target Upside: -6.73% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 66 Neutral
• Price Target: $89.00 ▲(7.80% Upside)
• Action: Reiterated Date: 02/25/26
• Date: Action: Reiterated 02/25/26

The score is primarily driven by steady profitability but weakened cash flow quality in 2025 and slightly rising leverage. Technicals are supportive and help offset a somewhat full valuation, while recent financing/capital structure actions are broadly constructive but the ATM program adds dilution risk.

Positive Factors

Regulated utility business model

A regulated rate base model gives MGE predictable, long-duration revenue and cost recovery mechanisms. That stability supports steady cash flow generation, underpins capital spending on grid and renewables, and reduces operational volatility versus merchant energy peers over the medium term.

Improving profitability and ROE

Firm-wide margins and an improved ROE indicate stronger operating efficiency and profitable deployment of capital. Sustained mid-to-high teen margins provide buffer against cost pressure and support internally funded investments and dividend coverage over the next several quarters.

Simplified capital structure and protected funding

Retiring first mortgage bonds removes liens on utility assets and simplifies debt security layers, while new senior notes include covenants capping indebtedness and limiting secured borrowing. Together these steps improve funding flexibility and preserve creditor protections, aiding long-term credit stability.

Negative Factors

Rising leverage

An upward drift in leverage reduces financial flexibility and raises interest burden sensitivity. Even if moderate for utilities, rising leverage narrows the cushion for adverse shocks, can constrain future investment choices, and could pressure credit metrics or borrowing costs over the medium term.

Weak free cash flow conversion

A meaningful swing to negative free cash flow and OCF covering less than 1x of net income indicate earnings are less cash-backed. That undermines internal funding for capex and dividends, increasing reliance on external financing and elevating dilution or leverage risks over the coming quarters.

ATM program dilution risk

A $100M ATM provides convenient capital access but creates a recurring dilution option if used heavily. Persistent equity issuance to fund operations or capex would depress EPS and ROE over time, potentially offsetting benefits from improved liquidity and weakening per-share returns for long-term holders.

MGE Energy Business Overview & Revenue Model

Company Description

MGE Energy, Inc., through its subsidiaries, operates as a public utility holding company primarily in Wisconsin. It operates through Regulated Electric Utility Operations; Regulated Gas Utility Operations; Nonregulated Energy Operations; Transmission Investments; and All Other. The company generates, purchases, and distributes electricity; owns or leases electric generation facilities located in Wisconsin and Iowa; and plans, constructs, operates, maintains, and expands transmission facilities to provide transmission services. It also generates electricity from coal-fired, gas-fired, and renewable energy sources, as well as purchases power under short and long-term commitments. As of December 31, 2021, the company generated and distributed electricity to 159,000 customers in Dane County, Wisconsin; and purchased and distributed natural gas to 169,000 customers in seven Wisconsin counties. MGE Energy, Inc.is headquartered in Madison, Wisconsin.

How the Company Makes Money

MGE Energy generates revenue primarily through the sale of electricity and natural gas to its customers. The company earns money by charging customers for energy consumption based on regulated rates set by the Public Service Commission of Wisconsin. Additionally, MGE Energy has diversified its revenue streams by investing in renewable energy projects, such as solar and wind, which not only help in reducing costs but also align with regulatory incentives for cleaner energy. The company may also receive supplemental income from energy efficiency programs and initiatives designed to reduce overall energy demand. Partnerships with local governments and organizations for community solar projects further enhance revenue opportunities by attracting more customers interested in renewable options.

MGE Energy Financial Statement Overview

Summary

Solid utility profitability with improving net margin (~18%) and ROE (~13%) in 2025, but the profile is held back by uneven revenue trends, rising leverage (debt/equity drifting higher), and a notable deterioration in 2025 free cash flow and cash-to-earnings support.

Income Statement

Profitability is solid for a utility, with net margins consistently in the mid-to-high teens and improving to ~18% in 2025. Revenue growth has been uneven (declines in 2023–2024 followed by a rebound in 2025), which tempers the quality of the earnings trajectory. Reported gross margin jumps sharply in 2025 versus prior years, suggesting a change in cost presentation or one-time effects that reduces comparability.

Balance Sheet

Leverage is moderate and typical for the sector, with debt running at roughly two-thirds to three-quarters of equity (rising to ~0.77 in 2025 from ~0.64 in 2024). Returns on equity are steady and improved to ~13% in 2025, indicating reasonable profitability on the capital base. The main watch item is the upward drift in leverage alongside a decline in equity in 2025 versus 2024.

Cash Flow

Cash generation from operations is generally supportive, but conversion into free cash flow is inconsistent. Free cash flow was positive in 2023–2024 but turned meaningfully negative in 2025, which is a key weakness (likely higher capital spending needs). Operating cash flow covered net income well in 2023–2024, but coverage fell below 1x in 2025, indicating earnings were less cash-backed in the most recent year.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	725.52M	743.65M	676.94M	690.43M	714.52M	606.58M
Gross Profit	407.22M	723.65M	278.83M	269.04M	243.92M	213.55M
EBITDA	300.05M	195.65M	272.68M	276.28M	249.37M	210.97M
Net Income	134.61M	135.89M	120.57M	117.70M	110.95M	105.76M
Balance Sheet
Total Assets	2.99B	3.02B	2.83B	2.68B	2.52B	2.37B
Cash, Cash Equivalents and Short-Term Investments	10.81M	2.25M	21.30M	11.14M	11.60M	17.44M
Total Debt	841.44M	813.84M	787.45M	780.01M	727.17M	641.92M
Total Liabilities	1.69B	1.97B	1.60B	1.54B	1.44B	1.34B
Stockholders Equity	1.30B	1.05B	1.23B	1.14B	1.08B	1.03B
Cash Flow
Free Cash Flow	-31.77M	-79.99M	40.86M	15.49M	-21.30M	-15.64M
Operating Cash Flow	296.72M	263.23M	277.78M	237.56M	153.74M	137.53M
Investing Cash Flow	-335.72M	-350.56M	-241.49M	-230.02M	-180.15M	-156.97M
Financing Cash Flow	34.62M	71.57M	-26.83M	-10.48M	25.54M	-8.76M

MGE Energy Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 82.56
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MGEE, the sentiment is Positive. The current price of 82.56 is above the 20-day moving average (MA) of 80.26, above the 50-day MA of 79.61, and below the 200-day MA of 83.54, indicating a neutral trend. The MACD of 0.59 indicates Negative momentum. The RSI at 60.18 is Neutral, neither overbought nor oversold. The STOCH value of 63.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MGEE.

MGE Energy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AVA	77 Outperform	$3.47B	18.14	7.31%	5.10%	2.14%	-6.51%
OTTR	72 Outperform	$3.61B	13.05	16.10%	2.54%	-3.18%	-8.62%
MGEE	66 Neutral	$3.02B	22.11	10.80%	2.36%	8.26%	12.47%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
BKH	64 Neutral	$5.56B	18.45	7.96%	3.91%	7.03%	6.64%
NWE	64 Neutral	$4.27B	23.52	―	4.09%	4.90%	-4.42%

MGE Energy Corporate Events

MGE Energy Launches New $100 Million ATM Program

On February 24, 2026, MGE Energy, Inc. entered into an Equity Distribution Agreement with Guggenheim Securities and Morgan Stanley to sell up to $100 million of common stock through at-the-market offerings on Nasdaq and other permitted transaction types. The managers will act as sales agents or principals, receive up to a 2% commission, and the shares will be issued under an existing shelf registration and related prospectus filings made the same day.

The company’s management will retain broad discretion over the use of net proceeds, which are currently expected to support general corporate purposes such as repaying short-term debt, refinancing other securities, funding capital expenditures, and investing in subsidiaries. The program provides MGE Energy with flexible, incremental access to equity capital that can support its balance sheet and ongoing investment needs without committing to a single large, underwritten offering at one point in time.

The most recent analyst rating on (MGEE) stock is a Sell with a $77.00 price target. To see the full list of analyst forecasts on MGE Energy stock, see the MGEE Stock Forecast page.

MGE Energy Retires Final First Mortgage Bonds, Ends Indenture

On January 27, 2026, Madison Gas and Electric Company (MGE) redeemed the remaining $1.2 million of its outstanding 7.70% First Mortgage Bonds due 2028, which were the last series of first mortgage bonds issued under its longstanding 1946 Indenture of Mortgage and Deed of Trust. With no first mortgage bonds remaining, MGE satisfied and discharged the Indenture, is recording the discharge to remove the related lien from its utility plant assets in the relevant jurisdictions, and will no longer issue additional first mortgage bonds under that Indenture, simplifying its capital structure and releasing those assets from mortgage security.

The most recent analyst rating on (MGEE) stock is a Buy with a $87.00 price target. To see the full list of analyst forecasts on MGE Energy stock, see the MGEE Stock Forecast page.

MGE Energy Issues New Senior Notes Under Purchase Agreement

On January 22, 2026, MGE issued an aggregate $90 million of unsecured senior notes in three tranches—a $30 million 5.05% Series A due January 31, 2036, a $30 million 5.25% Series B due January 31, 2041, and a $30 million 5.79% Series C due January 31, 2056—under a new Note Purchase Agreement with institutional purchasers. The notes, which are outside MGE’s existing 1998 indenture, carry semiannual interest payments starting July 31, 2026, are optionally redeemable with a make-whole premium (subject to limited maturity-window exceptions), and must be prepaid at par plus accrued interest, but without a premium, following certain change-of-control events tied to ownership of MGE Energy and the company’s investment-grade ratings. The agreement imposes leverage and structural protections, including a cap on the ratio of consolidated indebtedness to total capitalization at 65% and restrictions on issuing priority debt above 20% of consolidated assets, effectively limiting additional secured borrowing and requiring equal and ratable security for these notes if the principal bank credit facilities are ever secured, thereby preserving noteholder protections while providing MGE funding flexibility for capital spending and other corporate obligations.

The most recent analyst rating on (MGEE) stock is a Sell with a $74.00 price target. To see the full list of analyst forecasts on MGE Energy stock, see the MGEE Stock Forecast page.