Pinnacle West Capital (PNW) AI Stock Analysis

• Market Cap: $11.04B
• Dividend Yield: 3.87%
• Average Volume (3M): 1.14M
• Price to Earnings (P/E): 19.1
• Beta (1Y): 0.14
• Revenue Growth: 7.47%
• EPS Growth: -8.53%
• Country: US
• Employees: 6,400
• Sector: Utilities
• Sector Strength: 88
• Industry: Regulated Electric
• EPS (TTM): 1.58
• Shares Outstanding: 119,427,246
• 10 Day Avg. Volume: 1,285,178
• 30 Day Avg. Volume: 1,142,999
• PEG Ratio: 0.75
• Price to Book (P/B): 1.43
• Price to Sales (P/S): 1.88
• P/FCF Ratio: -15.09
• Enterprise Value/Market Cap: 2.26
• Enterprise Value/Revenue: 4.75
• Enterprise Value/Gross Profit: 16.08
• Enterprise Value/Ebitda: 12.19
• 1Y Price Target: $97.25
• Price Target Upside: 5.16% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

• Rating: 65 Neutral
• Price Target: $100.00 ▲(8.13% Upside)

Pinnacle West Capital's overall score is driven by strong financial performance and strategic growth initiatives. However, high debt levels, negative free cash flow, and regulatory challenges weigh on the score. The valuation is fair, supported by a reasonable P/E ratio and attractive dividend yield.

Positive Factors

Demand Growth

TSMC's plans are expected to have a significant positive impact on Pinnacle West Capital's long-term growth with over 500MW of demand projected.

Regulatory Environment

An improving regulatory environment bolstered by the implementation of alternative ratemaking parameters has the potential to improve the company’s earned ROEs and linearize EPS growth.

Negative Factors

Regulatory Risk

Regulatory execution is critical over the next 12-18 months, which will likely limit multiple expansion in the interim.

Risk/Reward Skew

Regulatory proceeding, especially in a jurisdiction with a historically noisy commission, asymmetrically skews risk/reward to the downside in the near-term.

Pinnacle West Capital Business Overview & Revenue Model

Company Description

Pinnacle West Capital Corporation, through its subsidiary, Arizona Public Service Company, provides retail and wholesale electric services primarily in the state of Arizona. The company engages in the generation, transmission, and distribution of electricity using coal, nuclear, gas, oil, and solar generating facilities. Its transmission facilities include approximately 5,814 pole miles of overhead lines and approximately 74 miles of underground lines; and distribution facilities comprise approximately 11,258 miles of overhead lines and approximately 22,821 miles of underground primary cable, as well as owns and maintains 475 transmission and distribution substations. The company also owns or leases approximately 6,323 megawatts of regulated generation capacity. It serves approximately 1.3 million customers. Pinnacle West Capital Corporation was incorporated in 1985 and is headquartered in Phoenix, Arizona.

How the Company Makes Money

Pinnacle West Capital generates revenue primarily through its regulated utility operations, specifically from the sale of electricity to its customers. The company's revenue model is based on a cost-plus pricing structure, where it earns a regulated return on the investments made in infrastructure and capital improvements. Key revenue streams include residential, commercial, and industrial electricity sales, as well as fees from ancillary services. Furthermore, the company benefits from partnerships with renewable energy developers and government incentives for clean energy initiatives, contributing to its earnings through renewable energy credits and lower operational costs associated with sustainable practices.

Pinnacle West Capital Financial Statement Overview

Summary

Pinnacle West Capital shows strong revenue growth and operational efficiency, with solid margins. However, high debt levels and negative free cash flow pose risks to financial flexibility.

Income Statement

Pinnacle West Capital's revenue has shown a consistent upward trend, growing from $3.8 billion in 2021 to $5.2 billion in TTM (Trailing-Twelve-Months) 2025. The gross profit margin is robust at approximately 37.1% for TTM 2025, indicating effective cost management. The net profit margin for TTM 2025 is around 11.3%, demonstrating stable profitability. The EBIT margin is strong at 19.3%, and EBITDA margin is even stronger at 39.2%, reflecting efficient operations. However, the net income has slightly declined from the previous year, indicating potential challenges in maintaining net profitability.

Balance Sheet

The debt-to-equity ratio for TTM 2025 is approximately 1.8, suggesting a higher reliance on debt financing, which could pose risks if not managed carefully. The return on equity (ROE) is around 8.7%, indicating moderate efficiency in generating profits from shareholders' equity. The equity ratio is about 24.7%, reflecting a moderate level of equity financing relative to total assets. While the company maintains a stable financial structure, the high debt level warrants caution.

Cash Flow

Operating cash flow has increased to $1.66 billion in TTM 2025, indicating good cash generation from operations. However, the free cash flow remains negative at -$689.6 million, primarily due to substantial capital expenditures, which might impact liquidity. The operating cash flow to net income ratio is approximately 2.8, reflecting strong cash flow relative to net income. The negative free cash flow to net income ratio highlights the need for careful management of capital investments.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.26B	5.12B	4.70B	4.32B	3.80B	3.59B
Gross Profit	1.55B	2.14B	1.84B	1.71B	1.70B	1.63B
EBITDA	2.05B	2.07B	1.72B	1.65B	1.64B	1.53B
Net Income	576.06M	608.81M	501.56M	483.60M	618.72M	550.56M
Balance Sheet
Total Assets	0.00	26.10B	24.66B	22.72B	22.00B	20.02B
Cash, Cash Equivalents and Short-Term Investments	0.00	3.84M	4.96M	4.83M	9.97M	59.97M
Total Debt	5.15B	11.05B	10.30B	8.88B	8.18B	6.92B
Total Liabilities	22.41B	19.25B	18.38B	16.56B	15.98B	14.27B
Stockholders Equity	6.73B	6.75B	6.18B	6.05B	5.91B	5.63B
Cash Flow
Free Cash Flow	-759.25M	-639.37M	-638.67M	-466.05M	-613.46M	-360.22M
Operating Cash Flow	1.77B	1.61B	1.21B	1.24B	860.01M	966.37M
Investing Cash Flow	-2.29B	-1.93B	-1.69B	-1.62B	-1.39B	-1.28B
Financing Cash Flow	534.63M	322.69M	486.68M	371.47M	476.92M	361.14M

Pinnacle West Capital Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 92.48
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PNW, the sentiment is Positive. The current price of 92.48 is above the 20-day moving average (MA) of 91.10, above the 50-day MA of 89.80, and above the 200-day MA of 88.47, indicating a bullish trend. The MACD of 0.77 indicates Negative momentum. The RSI at 57.12 is Neutral, neither overbought nor oversold. The STOCH value of 75.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PNW.

Pinnacle West Capital Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LNT	80 Outperform	$16.78B	20.19	11.94%	3.07%	4.62%	32.23%
EVRG	75 Outperform	$16.67B	19.93	8.55%	3.65%	3.28%	13.56%
AEE	74 Outperform	$27.41B	22.26	10.29%	2.72%	17.32%	3.35%
OGE	72 Outperform	$9.14B	18.63	10.76%	3.73%	16.01%	19.05%
CNP	67 Neutral	$25.18B	26.88	8.76%	2.20%	4.84%	-11.24%
PNW	65 Neutral	$11.04B	19.05	8.90%	3.87%	7.47%	-8.53%
Sector *	56 Neutral	AU$1.96B	7.00	12.22%	3.98%	24.17%	-114.27%

Pinnacle West Capital Corporate Events

Pinnacle West Capital Highlights Strategic Growth Initiatives

In August 2025, Pinnacle West Capital Corporation will engage with securities analysts and investors, highlighting its strategic initiatives and growth outlook. The company is focusing on expanding its capacity to meet customer needs, improving regulatory environments, and enhancing infrastructure to support Arizona’s economic development. These efforts aim to sustain customer growth and align with the company’s clean energy goals, positioning Pinnacle West as a key player in the region’s energy market.

The most recent analyst rating on (PNW) stock is a Hold with a $95.00 price target. To see the full list of analyst forecasts on Pinnacle West Capital stock, see the PNW Stock Forecast page.

Pinnacle West Capital Reports Q2 2025 Income Decline

Pinnacle West Capital Corp. reported a decrease in net income for the second quarter of 2025 compared to the previous year, primarily due to milder weather, increased operational costs, and higher taxes. Despite the financial dip, the company experienced robust customer and sales growth, setting a new peak demand record. The company continues to prioritize reliability and affordability, updating its clean energy goals to a carbon-neutral approach by 2050. Pinnacle West also offers various customer assistance programs to manage energy costs and provides critical heat relief services in partnership with local organizations.

The most recent analyst rating on (PNW) stock is a Hold with a $95.00 price target. To see the full list of analyst forecasts on Pinnacle West Capital stock, see the PNW Stock Forecast page.

Pinnacle West Capital Highlights Strategic Initiatives for Growth

In July 2025, Pinnacle West Capital Corporation plans to engage with securities analysts and investors, highlighting its strategic initiatives and financial outlook. The company is focusing on infrastructure development, regulatory improvements, and expanding its generation capacity to support customer growth and enhance system reliability. Arizona’s favorable business environment and Pinnacle West’s commitment to clean energy and customer service are expected to drive continued growth and stakeholder value.

The most recent analyst rating on (PNW) stock is a Hold with a $95.00 price target. To see the full list of analyst forecasts on Pinnacle West Capital stock, see the PNW Stock Forecast page.

Pinnacle West Capital Seeks Major Rate Increase Approval

On June 13, 2025, Arizona Public Service (APS) filed a request with the Arizona Corporation Commission (ACC) for a net base rate increase of $579.52 million, which represents a 13.99% increase. This adjustment aims to address a revenue deficiency and support infrastructure upgrades, system reliability, and customer support programs. The proposed rate changes, if approved, would not take effect until the second half of 2026, and are designed to ensure that customers pay their fair share while maintaining service quality. APS is committed to assisting customers with various support programs and aims to keep costs manageable while meeting Arizona’s growing energy demands.

The most recent analyst rating on (PNW) stock is a Hold with a $95.00 price target. To see the full list of analyst forecasts on Pinnacle West Capital stock, see the PNW Stock Forecast page.

Pinnacle West Capital Engages with Analysts on Growth

Pinnacle West Capital Corporation is set to engage with securities analysts and investors in May 2025, focusing on its growth outlook and energy future. The company highlights its improved regulatory environment, progress in clean energy commitments, and opportunities in transmission growth, which are expected to enhance customer affordability and maintain a customer-centric strategy. Arizona’s robust economy and Pinnacle West’s strategic positioning in the region are projected to drive significant growth and development, benefiting stakeholders through increased sales and improved cost recovery mechanisms.

The most recent analyst rating on (PNW) stock is a Hold with a $95.00 price target. To see the full list of analyst forecasts on Pinnacle West Capital stock, see the PNW Stock Forecast page.

Pinnacle West Capital Shareholders Approve Key Proposals

On May 21, 2025, Pinnacle West Capital Corporation held its Annual Meeting of Shareholders, where five key proposals were voted on. The shareholders elected eleven directors for one-year terms, approved executive compensation, ratified Deloitte & Touche LLP as the independent accountant for 2025, and agreed to amend the company’s articles to increase authorized common stock. However, a proposal to improve special shareholder meetings was rejected.

The most recent analyst rating on (PNW) stock is a Hold with a $95.00 price target. To see the full list of analyst forecasts on Pinnacle West Capital stock, see the PNW Stock Forecast page.