Southern Co (SO) AI Stock Analysis

• Market Cap: $100.18B
• Dividend Yield: 3.25%
• Average Volume (3M): 5.48M
• Price to Earnings (P/E): 21.9
• Beta (1Y): 0.09
• Revenue Growth: 9.58%
• EPS Growth: 8.02%
• Country: US
• Employees: 28,314
• Sector: Utilities
• Sector Strength: 68
• Industry: Regulated Electric
• EPS (TTM): 1.23
• Shares Outstanding: 1,099,055,000
• 10 Day Avg. Volume: 6,193,513
• 30 Day Avg. Volume: 5,477,995
• PEG Ratio: 4.76
• Price to Book (P/B): 2.90
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -2.52K
• Enterprise Value/Market Cap: 1.66
• Enterprise Value/Revenue: 1.55
• Enterprise Value/Gross Profit: 13.12
• Enterprise Value/Ebitda: 3.15
• 1Y Price Target: $94.82
• Price Target Upside: 4.03% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12

• Rating: 70 Outperform
• Price Target: $98.00 ▲(7.52%Upside)

Southern Co's solid financial performance and positive earnings call sentiment are the most significant factors contributing to the score. Stable profitability and strong EPS growth highlight strengths, while high leverage and negative free cash flow are risks. Neutral technical indicators and moderate valuation reflect a balanced market perception, with future performance dependent on effective cost management amidst potential tariff impacts.

Positive Factors

Rate Base Growth

SO's imminent RFP wins unlock superior rate base growth vs peers.

Regulatory Certainty

Convergence of regulatory clarity and RFP-driven capex upside uniquely positions SO among utilities.

Negative Factors

Financial Risk

Earnings below the lower limit of 9.5% ROE would have no recovery, indicating potential financial risk if performance targets are not met.

Southern Co Business Overview & Revenue Model

Company Description

The Southern Company, through its subsidiaries, engages in the generation, transmission, and distribution of electricity. It operates through Gas Distribution Operations, Gas Pipeline Investments, Wholesale Gas Services, and Gas Marketing Services segments. The company also develops, constructs, acquires, owns, and manages power generation assets, including renewable energy projects and sells electricity in the wholesale market; and distributes natural gas in Illinois, Georgia, Virginia, and Tennessee, as well as provides gas marketing services, wholesale gas services, and gas pipeline investments operations. In addition, it owns and/or operates 30 hydroelectric generating stations, 24 fossil fuel generating stations, three nuclear generating stations, 13 combined cycle/cogeneration stations, 45 solar facilities, 15 wind facilities, one fuel cell facility, and four battery storage facility; and constructs, operates, and maintains 76,289 miles of natural gas pipelines and 14 storage facilities with total capacity of 157 Bcf to provide natural gas to residential, commercial, and industrial customers. The company serves approximately 8.7 million electric and gas utility customers. Further, the company offers digital wireless communications and fiber optics services. The Southern Company was incorporated in 1945 and is headquartered in Atlanta, Georgia.

How the Company Makes Money

Southern Company generates revenue primarily through the sale of electricity and natural gas to residential, commercial, and industrial customers. The company operates under a regulated utility model, where it earns a return on its investments in infrastructure and services as approved by state regulatory commissions. Key revenue streams include electricity sales from its subsidiaries like Alabama Power and Georgia Power, which operate under state-regulated rates. Additionally, Southern Company earns income from its natural gas distribution operations and investments in renewable energy projects, including solar and wind farms. Strategic partnerships and long-term contracts with industrial and wholesale customers also contribute to its earnings.

Southern Co Financial Statement Overview

Summary

Southern Co exhibits solid revenue growth and profitability with a net profit margin of 16.5% TTM. However, high leverage with a debt-to-equity ratio of 2.07 and negative free cash flow due to high capital expenditures pose challenges. Effective equity utilization and return generation are strengths, but cash management requires attention.

Income Statement

Southern Co exhibits solid revenue growth with a 4.2% increase in TTM compared to the previous annual figure. The gross profit margin stands at 45.4% TTM, indicating strong profitability. The net profit margin of 16.5% TTM is robust, and both EBIT and EBITDA margins reflect operational efficiency at 26.4% and 48.7% respectively. Overall, the company demonstrates stable profitability and efficient operations, although gross profit has slightly decreased compared to the previous year.

Balance Sheet

The balance sheet shows a debt-to-equity ratio of 2.07, indicating a high leverage level typical in the regulated electric industry. The return on equity is healthy at 13.6% TTM, reflecting effective use of shareholders' capital. The equity ratio of 22.8% suggests a moderate reliance on equity financing. While leverage is high, the company maintains a stable equity base and good returns for shareholders.

Cash Flow

Operating cash flow remains strong at $9.73 billion TTM, although free cash flow is negative at -$39 million, mainly due to high capital expenditures. The operating cash flow to net income ratio is solid at 2.11, indicating good cash conversion from earnings. However, the decline in free cash flow growth is a concern, necessitating careful management of capital expenditures to improve cash generation.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	27.85B	26.72B	25.25B	29.28B	23.11B	20.38B
Gross Profit	12.65B	13.34B	11.71B	10.82B	10.06B	9.90B
EBITDA	13.58B	13.20B	11.74B	9.97B	8.31B	9.20B
Net Income	4.61B	4.40B	3.98B	3.54B	2.41B	3.13B
Balance Sheet
Total Assets	148.11B	145.18B	139.33B	134.89B	127.53B	122.94B
Cash, Cash Equivalents and Short-Term Investments	2.33B	1.07B	748.00M	1.92B	1.80B	1.06B
Total Debt	70.12B	66.28B	63.49B	59.13B	55.47B	51.04B
Total Liabilities	110.89B	108.51B	104.11B	100.36B	94.97B	90.41B
Stockholders Equity	33.84B	33.21B	31.44B	30.41B	28.16B	28.26B
Cash Flow
Free Cash Flow	-39.00M	833.00M	-1.54B	-1.62B	-1.07B	-745.00M
Operating Cash Flow	9.73B	9.79B	7.55B	6.30B	6.17B	6.70B
Investing Cash Flow	-9.86B	-9.40B	-9.67B	-8.43B	-7.35B	-7.03B
Financing Cash Flow	1.63B	-208.00M	999.00M	2.34B	1.95B	-576.00M

Southern Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 91.15
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SO, the sentiment is Positive. The current price of 91.15 is above the 20-day moving average (MA) of 89.84, above the 50-day MA of 89.56, and above the 200-day MA of 87.01, indicating a bullish trend. The MACD of 0.63 indicates Negative momentum. The RSI at 56.37 is Neutral, neither overbought nor oversold. The STOCH value of 86.22 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SO.

Southern Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NEE	78 Outperform	$150.40B	27.32	11.19%	3.10%	20.35%	-27.07%
DUK	73 Outperform	$92.39B	19.83	9.48%	3.57%	5.02%	45.08%
EXC	73 Outperform	$43.82B	16.11	10.10%	3.73%	6.71%	16.09%
SO	70 Outperform	$100.18B	21.86	14.01%	3.25%	9.58%	8.02%
D	69 Neutral	$48.97B	21.54	8.22%	4.65%	3.62%	40.33%
AEP	68 Neutral	$55.76B	20.14	10.41%	3.60%	4.20%	-3.64%
Sector *	67 Neutral	$16.54B	17.06	4.47%	3.55%	4.77%	6.10%

Southern Co Corporate Events

Georgia PSC Approves Georgia Power Rate Plan Extension

On July 1, 2025, the Georgia Public Service Commission approved a settlement agreement involving Georgia Power Company, extending the existing alternate rate plan through December 31, 2028. This extension maintains the current retail base rates and return on equity, while allowing for separate proceedings to address storm damage costs incurred through 2025. The agreement also outlines the continuation of amortization of regulatory assets and liabilities, and sets guidelines for tax credit amortization and earnings sharing.

The most recent analyst rating on (SO) stock is a Buy with a $96.00 price target. To see the full list of analyst forecasts on Southern Co stock, see the SO Stock Forecast page.

Southern Co Confirms Board and Approves Key Amendments

On May 21, 2025, Southern Company held its Annual Meeting of Stockholders, where several key decisions were made. The election of the Board of Directors was confirmed, with all nominees receiving a majority of votes. Additionally, the stockholders approved the compensation for named executive officers and the appointment of Deloitte & Touche LLP as the independent registered public accounting firm for 2025. An amendment to the company’s Restated Certificate of Incorporation was also approved, reducing the supermajority vote requirement to a majority vote. However, several stockholder proposals, including those concerning a simple majority vote, fossil fuel reliance, a net zero audit, and workforce civil liberties, were not approved.

The most recent analyst rating on (SO) stock is a Buy with a $96.00 price target. To see the full list of analyst forecasts on Southern Co stock, see the SO Stock Forecast page.

Southern Co Issues $1.65 Billion Convertible Notes

On May 23, 2025, Southern Company issued $1.65 billion in Series 2025A 3.25% Convertible Senior Notes, maturing on June 15, 2028. These notes are unsecured and unsubordinated, with conversion options tied to the company’s stock performance and specific corporate events, potentially impacting the company’s financial strategy and market positioning.

The most recent analyst rating on (SO) stock is a Buy with a $96.00 price target. To see the full list of analyst forecasts on Southern Co stock, see the SO Stock Forecast page.

Southern Co Upsizes $1.45B Convertible Notes Offering

On May 20, 2025, Southern Company announced the upsize and pricing of a $1.45 billion offering of its Series 2025A 3.25% Convertible Senior Notes, due June 15, 2028, in a private placement to qualified institutional buyers. The offering, which was increased by $200 million from the previously announced size, is expected to close on May 23, 2025. The company plans to use approximately $1.25 billion of the net proceeds to repurchase existing convertible senior notes and the remainder for general corporate purposes. This move is part of Southern Company’s strategy to manage its debt portfolio and optimize its capital structure, potentially impacting its stock market dynamics and stakeholder interests.

The most recent analyst rating on (SO) stock is a Buy with a $96.00 price target. To see the full list of analyst forecasts on Southern Co stock, see the SO Stock Forecast page.

Southern Co Announces $1.25 Billion Note Offering

On May 20, 2025, Southern Company announced a private offering of $1.25 billion in convertible senior notes due June 15, 2028, with an option for initial purchasers to buy an additional $200 million. The proceeds are intended for repurchasing existing convertible notes and repaying commercial paper borrowings. This move is expected to impact the company’s stock market activity and conversion pricing, potentially affecting its market positioning.

The most recent analyst rating on (SO) stock is a Buy with a $96.00 price target. To see the full list of analyst forecasts on Southern Co stock, see the SO Stock Forecast page.

Georgia Power Reaches Settlement on Rate Plan Extension

On May 19, 2025, Georgia Power and the Georgia Public Service Commission’s Public Interest Advocacy Staff reached a settlement agreement to extend the alternate rate plan through December 31, 2028. The agreement, pending approval, would maintain current base rates and retail return on equity, while addressing storm damage costs and regulatory asset amortization. The outcome of this agreement could impact Georgia Power’s financial operations and customer rates, with the Georgia PSC scheduled to vote by July 1, 2025.

The most recent analyst rating on (SO) stock is a Buy with a $96.00 price target. To see the full list of analyst forecasts on Southern Co stock, see the SO Stock Forecast page.