Pinnacle West Capital (PNW) AI Stock Analysis

• Market Cap: $10.66B
• Dividend Yield: 4.02%
• Average Volume (3M): 1.14M
• Price to Earnings (P/E): 18.3
• Beta (1Y): 0.17
• Revenue Growth: 7.47%
• EPS Growth: -8.53%
• Country: US
• Employees: 6,400
• Sector: Utilities
• Sector Strength: 62
• Industry: Regulated Electric
• EPS (TTM): 1.58
• Shares Outstanding: 119,427,246
• 10 Day Avg. Volume: 907,675
• 30 Day Avg. Volume: 1,136,892
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 2.34
• Enterprise Value/Revenue: 4.75
• Enterprise Value/Gross Profit: 11.63
• Enterprise Value/Ebitda: 12.07
• 1Y Price Target: $98.33
• Price Target Upside: 10.48% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 65 Neutral
• Price Target: $96.00 ▲(7.87% Upside)

Pinnacle West Capital's overall stock score reflects a stable financial performance with some cost pressures and cash flow challenges. The technical analysis indicates a bearish trend, but the valuation is supported by a strong dividend yield. The earnings call and corporate events provide a positive long-term outlook, although immediate financial performance is mixed. The company's strategic initiatives and growth focus position it well for future opportunities.

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.

Financial Performance

PNW reported Q4/FY'24 operating EPS of -$0.06/$5.24 vs. $0.00/$4.41 in the prior year periods, which were above both Consensus and BofA estimates.

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 Proceedings

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

Regulatory Risk

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

Pinnacle West Capital Business Overview & Revenue Model

Company Description

Pinnacle West Capital Corporation (PNW) is a Phoenix-based utility holding company primarily engaged in the generation, transmission, and distribution of electricity through its principal subsidiary, Arizona Public Service Company (APS). The company operates in the utility sector, providing reliable energy services to residential, commercial, and industrial customers across Arizona. Pinnacle West is also involved in renewable energy initiatives, emphasizing sustainable practices and innovative solutions to meet the growing demand for clean energy.

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 demonstrates solid revenue growth and stable profitability, though cost pressures are evident. The balance sheet shows increased leverage, which could pose risks if not managed carefully. Cash flow generation is a concern, with negative free cash flow, but there are signs of improvement. Overall, the company maintains a stable financial position with areas for improvement in cost management and cash flow efficiency.

Income Statement

Pinnacle West Capital shows a steady revenue growth trajectory with a TTM revenue growth rate of 9.56%. The gross profit margin has decreased from 41.7% in 2024 to 35.08% in TTM, indicating some pressure on cost management. The net profit margin has slightly decreased to 10.96% in TTM from 11.88% in 2024, suggesting stable profitability despite rising costs. EBIT and EBITDA margins remain healthy, although slightly lower than previous years, reflecting consistent operational efficiency.

Balance Sheet

The company's debt-to-equity ratio has increased to 2.08 in TTM from 1.64 in 2024, indicating higher leverage and potential risk. Return on equity has slightly decreased to 8.59% in TTM from 9.01% in 2024, showing a slight decline in profitability relative to equity. The equity ratio remains stable, reflecting a balanced asset structure despite increased debt levels.

Cash Flow

Operating cash flow remains strong, but the free cash flow is negative, with a TTM free cash flow to net income ratio of -0.46, indicating challenges in converting earnings into free cash flow. The operating cash flow to net income ratio is 0.51, showing moderate cash generation efficiency. The free cash flow growth rate has improved to 15.07% in TTM, suggesting potential recovery in cash flow generation.

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	2.15B	2.14B	1.84B	1.71B	1.70B	1.63B
EBITDA	2.07B	2.07B	1.78B	1.65B	1.70B	1.56B
Net Income	576.06M	608.81M	501.56M	483.60M	618.72M	550.56M
Balance Sheet
Total Assets	29.24B	26.10B	24.66B	22.72B	22.00B	20.02B
Cash, Cash Equivalents and Short-Term Investments	18.84M	3.84M	4.96M	4.83M	9.97M	59.97M
Total Debt	14.00B	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	-793.53M	-639.37M	-638.67M	-466.05M	-613.46M	-360.22M
Operating Cash Flow	1.74B	1.61B	1.21B	1.24B	860.01M	966.37M
Investing Cash Flow	-2.30B	-1.93B	-1.69B	-1.62B	-1.39B	-1.28B
Financing Cash Flow	578.67M	322.69M	486.68M	371.47M	476.92M	361.14M

Pinnacle West Capital Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 89.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PNW, the sentiment is Negative. The current price of 89 is below the 20-day moving average (MA) of 90.80, below the 50-day MA of 90.48, and above the 200-day MA of 88.90, indicating a neutral trend. The MACD of -0.54 indicates Positive momentum. The RSI at 41.82 is Neutral, neither overbought nor oversold. The STOCH value of 20.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PNW.

Pinnacle West Capital Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WEC	76 Outperform	$34.59B	20.49	13.12%	3.26%	7.88%	20.67%
EVRG	72 Outperform	$16.40B	19.61	8.55%	3.73%	3.28%	13.56%
LNT	71 Outperform	$16.63B	20.00	11.94%	3.10%	4.62%	32.23%
DTE	68 Neutral	$28.32B	19.49	12.61%	3.14%	14.35%	3.62%
Sector *	66 Neutral	$17.25B	17.99	5.54%	3.64%	6.63%	11.55%
OGE	66 Neutral	$8.92B	18.19	10.76%	3.82%	16.01%	19.05%
PNW	65 Neutral	$10.66B	18.28	8.90%	4.02%	7.47%	-8.53%

Pinnacle West Capital Corporate Events

Pinnacle West Capital Amends Forward Sale Agreements

On August 28, 2025, Pinnacle West Capital Corporation amended its forward sale agreements with Wells Fargo Bank, initially dated February 28 and 29, 2024. The amendment sets a new settlement date for the share forward transactions to December 31, 2026, impacting the company’s financial operations and potentially its market strategy.

Pinnacle West Capital Discusses Growth and Energy Future

In September 2025, Pinnacle West Capital Corporation will engage with securities analysts and investors, discussing its growth outlook and energy future. The company is focusing on infrastructure improvements, regulatory alignment, and strategic transmission projects to support customer growth and enhance system reliability. Arizona’s favorable business environment and strong economic growth continue to position Pinnacle West advantageously in the market, with ongoing investments in clean energy and customer experience improvements.

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.

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.

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.

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.