Pinnacle West Capital (PNW) AI Stock Analysis

• Market Cap: $10.84B
• Dividend Yield: 3.91%
• Average Volume (3M): 1.23M
• Price to Earnings (P/E): 18.0
• Beta (1Y): 0.21
• Revenue Growth: 10.69%
• EPS Growth: 12.37%
• Country: US
• Employees: 6,400
• Sector: Utilities
• Sector Strength: 86
• Industry: Regulated Electric
• EPS (TTM): -0.04
• Shares Outstanding: 119,399,010
• 10 Day Avg. Volume: 1,073,474
• 30 Day Avg. Volume: 1,233,210
• PEG Ratio: -5.20
• Price to Book (P/B): 1.61
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -15.71
• Enterprise Value/Market Cap: 2.12
• Enterprise Value/Revenue: 1.13
• Enterprise Value/Gross Profit: 11.90
• Enterprise Value/Ebitda: 2.89
• 1Y Price Target: $97.11
• Price Target Upside: 6.06% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10

• Rating: 65 Neutral
• Price Target: $97.00 ▲(5.94%Upside)

Pinnacle West Capital's overall score reflects strong revenue growth and operational efficiency, offset by high debt levels and negative cash flow. Technical analysis suggests neutral momentum, while valuation is attractive with a decent dividend yield. Economic and customer growth prospects are positive, but current financial challenges and regulatory uncertainties require cautious optimism.

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.

Earnings 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.

Valuation Concerns

Regulatory execution is the critical path over the next 12-18 months, which likely limits multiple expansion in the interim and any regulatory proceeding 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 Corporation generates revenue primarily through its regulated electric utility operations under Arizona Public Service (APS). APS serves residential, commercial, and industrial customers by generating, transmitting, and distributing electricity across Arizona. The company's revenue model is largely based on regulated electricity rates approved by the Arizona Corporation Commission (ACC), which allows the company to recover costs and earn a return on investments made in infrastructure and service improvements. Additionally, Pinnacle West invests in renewable energy projects and energy efficiency programs, which are supported by regulatory incentives and contribute to its revenue streams. The company's financial performance is influenced by factors such as customer demand, regulatory decisions, fuel costs, and operational efficiencies.

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 present risks, requiring careful management of debt and capital expenditures.

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
5.21B	5.12B	4.70B	4.32B	3.80B	3.59B
	Gross Profit
1.93B	2.14B	1.84B	1.71B	1.70B	1.63B
	EBIT
1.01B	1.01B	824.64M	731.91M	805.31M	788.15M
	EBITDA
2.04B	2.07B	1.72B	1.65B	1.64B	1.53B
	Net Income Common Stockholders
587.30M	608.81M	501.56M	483.60M	618.72M	550.56M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
10.05M	3.84M	4.96M	4.83M	9.97M	59.97M
	Total Assets
27.24B	26.10B	24.66B	22.72B	22.00B	20.02B
	Total Debt
12.13B	11.05B	10.30B	8.88B	8.18B	6.92B
	Net Debt
12.12B	11.04B	10.30B	8.87B	8.17B	6.86B
	Total Liabilities
20.39B	19.25B	18.38B	16.56B	15.98B	14.27B
	Stockholders Equity
6.74B	6.75B	6.18B	6.05B	5.91B	5.63B
Cash Flow		Free Cash Flow
-689.63M	-639.37M	-638.67M	-466.05M	-613.46M	-360.22M
	Operating Cash Flow
1.66B	1.61B	1.21B	1.24B	860.01M	966.37M
	Investing Cash Flow
-2.10B	-1.93B	-1.69B	-1.62B	-1.39B	-1.28B
	Financing Cash Flow
431.70M	322.69M	486.68M	371.47M	476.92M	361.14M

Pinnacle West Capital Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 91.56
• 50DMA: Negative
• 100DMA: Positive
• 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 Positive. The current price of 91.56 is below the 20-day moving average (MA) of 91.87, below the 50-day MA of 92.21, and above the 200-day MA of 87.94, indicating a neutral trend. The MACD of -0.37 indicates Positive momentum. The RSI at 49.57 is Neutral, neither overbought nor oversold. The STOCH value of 61.37 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	78 Outperform	$15.85B	21.29	10.71%	3.20%	2.46%	5.66%
AEE	72 Outperform	$26.64B	21.36	10.23%	2.82%	8.96%	3.75%
OGE	70 Neutral	$8.97B	18.48	10.72%	3.80%	15.56%	21.90%
EVRG	68 Neutral	$15.24B	17.45	8.95%	3.98%	5.53%	23.00%
CNP	67 Neutral	$24.63B	25.37	9.22%	2.21%	4.76%	4.08%
PNW	65 Neutral	$10.84B	18.03	9.08%	3.91%	10.69%	12.37%
Sector *	64 Neutral	$8.54B	10.24	4.67%	4.36%	4.12%	-13.19%

Pinnacle West Capital Corporate Events

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.

Pinnacle West Capital Reports Q1 2025 Net Loss

Pinnacle West Capital Corp. reported a net loss of $4.6 million for the first quarter of 2025, compared to a net income of $16.9 million in the same period of 2024, primarily due to increased operations and maintenance expenses and other financial factors. Despite these results, the company remains optimistic about achieving its annual targets, supported by robust customer and electricity sales growth, and continues to focus on summer preparedness and enhancing customer experiences with advanced technology and infrastructure improvements.

Pinnacle West Capital Highlights Growth and Clean Energy Future

In March 2025, Pinnacle West Capital Corporation will engage with securities analysts and investors, highlighting its growth outlook and energy future. The company is optimistic about its rapidly growing service territory in Arizona, improved regulatory environment, and progress toward clean energy commitments. Pinnacle West is also focusing on customer affordability and strategic transmission opportunities to support its expansion and maintain competitive rates.