Southern Co (SO) AI Stock Analysis

• Market Cap: $92.98B
• Dividend Yield: 3.42%
• Average Volume (3M): 6.42M
• Price to Earnings (P/E): 21.0
• Beta (1Y): -0.04
• Revenue Growth: 9.40%
• EPS Growth: -6.05%
• Country: US
• Employees: 28,314
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Electric
• EPS (TTM): 1.60
• Shares Outstanding: 1,101,104,900
• 10 Day Avg. Volume: 7,056,074
• 30 Day Avg. Volume: 6,420,579
• PEG Ratio: 1.96
• Price to Book (P/B): 2.72
• Price to Sales (P/S): 3.38
• P/FCF Ratio: 108.31
• Enterprise Value/Market Cap: 1.92
• Enterprise Value/Revenue: 6.19
• Enterprise Value/Gross Profit: 12.60
• Enterprise Value/Ebitda: 12.76
• 1Y Price Target: $93.81
• Price Target Upside: 9.08% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 19
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 64 Neutral
• Price Target: $92.00 ▲(6.98% Upside)

Southern Co's overall stock score is primarily driven by its strong earnings call performance and strategic corporate events, which highlight robust financial health and growth prospects. However, technical analysis indicates bearish momentum, and valuation metrics suggest potential overvaluation, which weigh down the overall score.

Positive Factors

Revenue Growth

Consistent revenue growth indicates a stable demand for Southern Co's energy services, supporting long-term business sustainability.

Operational Efficiency

Improved operational efficiency through higher gross margins enhances profitability, providing a competitive edge in the energy sector.

Equity Financing Progress

Securing equity financing strengthens Southern Co's financial position, supporting future growth and capital investment plans.

Negative Factors

Free Cash Flow Challenges

Negative free cash flow growth poses risks to financial flexibility, potentially affecting the company's ability to fund operations and investments.

High Debt Levels

High debt levels can limit financial flexibility and increase risk, impacting long-term financial health and strategic options.

Moody's Negative Outlook

A negative outlook from Moody's may affect Southern Co's credit rating, increasing borrowing costs and impacting future financing.

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 its customer base, which includes residential, commercial, and industrial users. Key revenue streams include regulated electricity sales, where rates are set by state utility commissions, ensuring a stable income source. Additionally, the company earns revenue from natural gas distribution services and from its investments in renewable energy projects, which contribute to its long-term growth strategy. Southern Company has established partnerships with various stakeholders, including governmental entities and other energy firms, to expand its renewable energy portfolio and enhance its infrastructure, thus contributing to its overall earnings. The company's diverse energy generation mix, which includes coal, natural gas, nuclear, and renewable sources, allows it to adapt to changing market conditions and regulatory environments, further solidifying its revenue base.

Southern Co Financial Statement Overview

Summary

Southern Co shows strong revenue growth and operational efficiency, with improving leverage ratios. However, challenges in free cash flow generation and a slight decline in net profit margin suggest areas for improvement. The company maintains a stable financial position, but high debt levels remain a potential risk.

Income Statement

Southern Co has demonstrated consistent revenue growth, with a TTM revenue growth rate of 1.94%. The gross profit margin has improved to 55.32% TTM, indicating strong operational efficiency. However, the net profit margin has slightly decreased to 15.42% TTM from 16.47% in the previous year, suggesting some pressure on net profitability. The EBIT margin is stable at 19.09% TTM, while the EBITDA margin remains robust at 43.26% TTM.

Balance Sheet

The company's debt-to-equity ratio has improved to 1.73 TTM from 1.99 in the previous year, indicating better leverage management. Return on equity is healthy at 12.80% TTM, reflecting effective use of equity capital. However, the equity ratio remains low, suggesting a high reliance on debt financing.

Cash Flow

Southern Co's free cash flow growth rate is negative at -229.25% TTM, highlighting challenges in generating free cash flow. The operating cash flow to net income ratio is moderate at 0.56 TTM, indicating reasonable cash generation relative to net income. The free cash flow to net income ratio is low at 0.15 TTM, suggesting limited free cash flow relative to earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	28.91B	26.72B	25.25B	29.28B	23.11B	20.38B
Gross Profit	14.20B	13.34B	11.71B	10.63B	10.25B	9.90B
EBITDA	14.02B	13.24B	11.78B	10.31B	8.39B	9.22B
Net Income	4.46B	4.40B	3.98B	3.54B	2.41B	3.13B
Balance Sheet
Total Assets	153.25B	145.18B	139.33B	134.89B	127.53B	122.94B
Cash, Cash Equivalents and Short-Term Investments	3.34B	1.07B	748.00M	1.92B	1.80B	1.06B
Total Debt	73.75B	66.28B	63.49B	59.13B	55.47B	51.04B
Total Liabilities	114.97B	108.51B	104.11B	100.36B	94.97B	90.41B
Stockholders Equity	35.00B	33.21B	31.44B	30.41B	28.16B	28.26B
Cash Flow
Free Cash Flow	-2.00B	833.00M	-1.54B	-1.62B	-1.07B	-745.00M
Operating Cash Flow	9.38B	9.79B	7.55B	6.30B	6.17B	6.70B
Investing Cash Flow	-12.32B	-9.40B	-9.67B	-8.43B	-7.35B	-7.03B
Financing Cash Flow	5.23B	-208.00M	999.00M	2.34B	1.95B	-576.00M

Southern Co Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 86.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SO, the sentiment is Negative. The current price of 86 is below the 20-day moving average (MA) of 87.89, below the 50-day MA of 92.11, and below the 200-day MA of 90.99, indicating a bearish trend. The MACD of -1.95 indicates Positive momentum. The RSI at 37.44 is Neutral, neither overbought nor oversold. The STOCH value of 18.94 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SO.

Southern Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NEE	71 Outperform	$170.05B	25.93	12.48%	2.77%	26.96%	-6.80%
DUK	70 Outperform	$89.66B	18.13	9.92%	3.62%	4.80%	14.44%
AEP	68 Neutral	$60.96B	16.70	12.85%	3.23%	7.66%	37.42%
EXC	67 Neutral	$44.02B	15.60	10.31%	3.65%	6.07%	15.20%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
SO	64 Neutral	$92.98B	20.99	13.06%	3.42%	9.40%	-6.05%
D	63 Neutral	$50.66B	20.19	9.27%	4.46%	12.72%	4.90%

Southern Co Corporate Events

Southern Co Reaches Settlement with Georgia PSC

On December 9, 2025, Georgia Power Company reached a settlement agreement with the Georgia Public Service Commission’s Public Interest Advocacy Staff to resolve its application for the certification of capacity from the 2029-2031 All-Source Request for Proposals. The agreement, pending approval by the Georgia PSC, would certify 9,885 megawatts of resources at their respective costs, including $16.3 billion in company-owned projects. The settlement aims to apply downward pressure on customer rates, potentially saving typical residential customers $102 annually from 2029 to 2031. The Georgia PSC is set to vote on the agreement on December 19, 2025, but the outcome remains uncertain.

Southern Co Completes Equity Units Issuance

On November 6, 2025, Southern Co completed the issuance and sale of 40,000,000 equity units, including an over-allotment option, through an underwriting agreement with major financial institutions. Each Corporate Unit, valued at $50, includes a stock purchase contract and interests in the company’s Series 2025B and 2025C Remarketable Senior Notes. The issuance aims to strengthen Southern Co’s financial positioning by securing future equity investments and leveraging long-term debt instruments.

Southern Co Adjusts Conversion Rate for Notes

On September 15, 2025, Southern Co announced an adjustment to the conversion rate for its Series 2023A 3.875% Convertible Senior Notes due December 15, 2025. This adjustment was necessary as the company had declared six regular quarterly cash dividends exceeding the distribution threshold, and no prior adjustments were made since each required less than a one percent increase. The new conversion rate is set at 11.9035 shares per $1,000 principal amount of the notes, reflecting the cumulative effect of previously deferred adjustments.