Pinnacle West Capital (PNW) AI Stock Analysis

• Market Cap: $10.70B
• Dividend Yield: 3.98%
• Average Volume (3M): 1.17M
• Price to Earnings (P/E): 17.8
• Beta (1Y): 0.18
• Revenue Growth: 10.69%
• EPS Growth: 12.37%
• Country: US
• Employees: 6,400
• Sector: Utilities
• Sector Strength: 69
• Industry: Regulated Electric
• EPS (TTM): -0.04
• Shares Outstanding: 119,399,010
• 10 Day Avg. Volume: 1,154,067
• 30 Day Avg. Volume: 1,168,357
• PEG Ratio: -5.08
• Price to Book (P/B): 1.57
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -15.33
• Enterprise Value/Market Cap: 2.12
• Enterprise Value/Revenue: 1.12
• Enterprise Value/Gross Profit: 11.76
• Enterprise Value/Ebitda: 2.85
• 1Y Price Target: $96.78
• Price Target Upside: 5.96% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

• Rating: 65 Neutral
• Price Target: $97.00 ▲(6.20%Upside)

Pinnacle West Capital's stock score reflects solid financial growth tempered by high debt and negative cash flow concerns. Technical indicators provide no clear trend, while valuation remains reasonable. Earnings call and corporate events offer a mixed outlook, with strong regional growth potential offset by recent financial challenges.

Positive Factors

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.

Long-term Growth Prospects

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 Risks

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 (PNW) is a leading energy company primarily engaged in providing electricity services in Arizona, USA. Through its principal subsidiary, Arizona Public Service (APS), the company generates, transmits, and distributes electricity to residential, commercial, and industrial customers. Pinnacle West is committed to delivering reliable and affordable energy while focusing on sustainable and renewable energy initiatives.

How the Company Makes Money

Pinnacle West Capital makes money primarily through the sale of electricity to its customers in Arizona, which includes residential, commercial, and industrial sectors. The company generates revenue by charging for the electricity consumed by these customers, which is billed based on regulated rates approved by the Arizona Corporation Commission. In addition to electricity sales, Pinnacle West may earn income from various renewable energy projects and energy efficiency programs. The company also benefits from investments in infrastructure and technology, which help improve operational efficiency and reduce costs. Regulatory decisions, energy demand, and fuel prices are significant factors influencing the company's earnings.

Pinnacle West Capital Financial Statement Overview

Summary

Pinnacle West Capital exhibits 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	5.21B	5.12B	4.70B	4.32B	3.80B	3.59B
Gross Profit	1.93B	2.14B	1.84B	1.71B	1.70B	1.63B
EBITDA	2.04B	2.07B	1.72B	1.65B	1.64B	1.53B
Net Income	587.30M	608.81M	501.56M	483.60M	618.72M	550.56M
Balance Sheet
Total Assets	27.24B	26.10B	24.66B	22.72B	22.00B	20.02B
Cash, Cash Equivalents and Short-Term Investments	10.05M	3.84M	4.96M	4.83M	9.97M	59.97M
Total Debt	12.13B	11.05B	10.30B	8.88B	8.18B	6.92B
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: 91.34
• 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 91.34 is above the 20-day moving average (MA) of 89.64, above the 50-day MA of 90.61, and above the 200-day MA of 88.63, indicating a bullish trend. The MACD of 0.02 indicates Negative momentum. The RSI at 57.38 is Neutral, neither overbought nor oversold. The STOCH value of 66.68 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	76 Outperform	$15.85B	21.60	10.71%	3.29%	2.46%	5.66%
AEE	75 Outperform	$26.34B	21.36	10.23%	2.98%	8.96%	3.75%
OGE	72 Outperform	$8.89B	18.47	10.72%	3.81%	15.56%	21.90%
EVRG	69 Neutral	$15.83B	18.29	8.95%	3.88%	5.53%	23.00%
PNW	65 Neutral	$10.70B	17.80	9.08%	3.98%	10.69%	12.37%
CNP	61 Neutral	$23.54B	24.35	9.22%	2.44%	4.76%	4.08%
Sector *	61 Neutral	C$4.83B	-10.05	-17.85%	4.45%	11.13%	-68.91%

Pinnacle West Capital Corporate Events

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.

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.