Pinnacle West Capital (PNW) AI Stock Analysis

• Market Cap: $10.50B
• Dividend Yield: 4.15%
• Average Volume (3M): 1.29M
• Price to Earnings (P/E): 18.1
• Beta (1Y): 0.15
• Revenue Growth: 5.70%
• EPS Growth: -8.25%
• Country: US
• Employees: 6,400
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Electric
• EPS (TTM): 3.39
• Shares Outstanding: 119,690,400
• 10 Day Avg. Volume: 1,270,912
• 30 Day Avg. Volume: 1,285,770
• 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: 2.40
• Enterprise Value/Revenue: 4.75
• Enterprise Value/Gross Profit: 12.42
• Enterprise Value/Ebitda: 12.01
• 1Y Price Target: $96.33
• Price Target Upside: 9.43% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 10
• EPS Forecast (FY): 4.86
• Revenue Forecast (FY): $5.34B

• Rating: 65 Neutral
• Price Target: $94.00 ▲(6.78% Upside)

Pinnacle West Capital's overall stock score reflects strong earnings guidance and strategic investments, which are offset by technical weakness and cash flow challenges. The company's valuation is attractive, with a reasonable P/E ratio and a solid dividend yield. However, bearish technical indicators and regulatory uncertainties pose risks.

Positive Factors

Revenue Growth

Strong revenue growth across various segments indicates robust market demand and effective sales strategies, supporting long-term financial health.

Strategic Investments

Investments in new generation capacity enhance energy supply capabilities, positioning the company for future demand and competitive advantage.

Economic and Customer Growth

Economic expansion in Arizona provides a favorable environment for customer growth, boosting demand for utility services and supporting revenue.

Negative Factors

Higher Operating Expenses

Rising operating expenses can erode profit margins, limiting the company's ability to reinvest in growth and potentially impacting long-term profitability.

Regulatory Challenges

Regulatory uncertainties can affect revenue predictability and financial planning, posing risks to stable earnings and strategic execution.

Cash Flow Constraints

Negative free cash flow limits the company's ability to fund operations and growth initiatives, potentially impacting financial stability.

Pinnacle West Capital Business Overview & Revenue Model

Company Description

Pinnacle West Capital Corporation (PNW) is a publicly traded holding company based in Phoenix, Arizona, primarily engaged in the utility sector through its subsidiary, Arizona Public Service Company (APS). The company provides electricity to approximately 1.3 million customers across Arizona, focusing on delivering reliable and affordable energy services while investing in renewable energy sources and infrastructure. In addition to its core utility operations, Pinnacle West is involved in energy generation, transmission, and distribution, as well as energy efficiency programs and related services.

How the Company Makes Money

Pinnacle West Capital generates revenue primarily through the sale of electricity to residential, commercial, and industrial customers. The company's revenue model is largely based on regulated utility operations, where earnings are derived from the rates approved by state regulatory agencies. Key revenue streams include retail electricity sales, which account for a significant portion of revenues, and ancillary services related to energy distribution. Additionally, Pinnacle West capitalizes on investments in renewable energy projects, which can provide additional revenue through long-term power purchase agreements. The company also engages in demand-side management programs that incentivize energy efficiency, further contributing to its earnings. Strategic partnerships with renewable energy developers and adherence to regulatory frameworks for rate adjustments are significant factors that bolster its financial performance.

Pinnacle West Capital Financial Statement Overview

Summary

Pinnacle West Capital demonstrates solid revenue growth and operational efficiency, but faces challenges with increasing leverage and cash flow constraints. While profitability margins are under pressure, the company maintains a stable asset structure. Addressing cash flow issues and managing debt levels will be crucial for future stability.

Income Statement

Pinnacle West Capital shows a strong revenue growth trajectory, with a notable increase in revenue over the TTM period. The gross profit margin is healthy, though it has slightly decreased from previous years. Net profit margin and EBIT margin have shown some decline, indicating pressure on profitability. However, the EBITDA margin remains robust, suggesting good operational efficiency.

Balance Sheet

The company's debt-to-equity ratio has increased, indicating higher leverage, which could pose risks if not managed carefully. Return on equity has slightly decreased, reflecting some pressure on profitability. The equity ratio remains stable, suggesting a balanced asset structure.

Cash Flow

The cash flow situation presents challenges, with negative free cash flow and a declining free cash flow growth rate. The operating cash flow to net income ratio is moderate, but the negative free cash flow to net income ratio indicates potential liquidity concerns.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.31B	5.12B	4.70B	4.32B	3.80B	3.59B
Gross Profit	2.03B	2.14B	1.84B	1.71B	1.70B	1.63B
EBITDA	2.10B	2.07B	1.78B	1.65B	1.70B	1.56B
Net Income	594.30M	608.81M	501.56M	483.60M	618.72M	550.56M
Balance Sheet
Total Assets	29.89B	26.10B	24.66B	22.72B	22.00B	20.02B
Cash, Cash Equivalents and Short-Term Investments	30.89M	3.84M	4.96M	4.83M	9.97M	59.97M
Total Debt	14.25B	11.05B	10.30B	8.88B	8.18B	6.92B
Total Liabilities	22.68B	19.25B	18.38B	16.56B	15.98B	14.27B
Stockholders Equity	7.17B	6.75B	6.18B	6.05B	5.91B	5.63B
Cash Flow
Free Cash Flow	-718.92M	-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	-2.50B	-1.93B	-1.69B	-1.62B	-1.39B	-1.28B
Financing Cash Flow	710.07M	322.69M	486.68M	371.47M	476.92M	361.14M

Pinnacle West Capital Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 88.03
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 88.03 is below the 20-day moving average (MA) of 88.29, below the 50-day MA of 89.17, and below the 200-day MA of 89.22, indicating a bearish trend. The MACD of -0.31 indicates Negative momentum. The RSI at 48.11 is Neutral, neither overbought nor oversold. The STOCH value of 47.40 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
LNT	70 Outperform	$16.72B	20.54	11.46%	3.11%	7.76%	23.48%
OGE	67 Neutral	$8.84B	17.23	10.69%	3.82%	18.03%	29.46%
WEC	67 Neutral	$34.11B	19.85	13.19%	3.38%	11.88%	29.76%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
PNW	65 Neutral	$10.50B	18.08	8.62%	4.15%	5.70%	-8.25%
DTE	65 Neutral	$26.65B	19.25	11.64%	3.45%	19.42%	-9.68%
EVRG	62 Neutral	$16.67B	19.92	8.36%	3.72%	0.11%	-0.52%

Pinnacle West Capital Corporate Events

Pinnacle West Capital Highlights Sales Growth in November

Pinnacle West Capital Corporation is preparing for investor meetings in November 2025, highlighting its strong sales growth and strategic investments to meet increasing demand. The company emphasizes its improved regulatory environment and commitment to customer experience enhancements, positioning itself for sustained growth and economic development in Arizona’s thriving market.

Pinnacle West Capital Reports Q3 2025 Net Income

Pinnacle West Capital Corp. reported a net income of $413.2 million for the third quarter of 2025, driven by increased customer growth and usage, despite a 2.4% decrease in earnings over the first nine months compared to 2024. The company plans to invest over $2.5 billion annually through 2028 in infrastructure, including a new natural gas power plant, to meet Arizona’s growing energy demands. Additionally, Pinnacle West is expanding community support efforts with an additional $3 million in shareholder funds for utility bill assistance and other support programs.

Pinnacle West Capital Highlights Strategic Growth Focus

In October 2025, Pinnacle West Capital Corporation will engage with securities analysts and investors, highlighting its strategic focus on growth and energy future. The company is making significant strides in improving its regulatory environment and infrastructure, which supports its goal of expanding capacity and enhancing reliability. Arizona’s favorable economic conditions and Pinnacle West’s commitment to clean energy and customer service improvements are expected to drive continued growth and stakeholder value.