Southern Co (SO) AI Stock Analysis

• Market Cap: $100.65B
• Dividend Yield: 2.99%
• Average Volume (3M): 6.06M
• Price to Earnings (P/E): 22.7
• Beta (1Y): -0.08
• 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: 7,572,379
• 30 Day Avg. Volume: 6,061,869
• 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: 1.78
• Enterprise Value/Revenue: 6.19
• Enterprise Value/Gross Profit: 12.60
• Enterprise Value/Ebitda: 12.75
• 1Y Price Target: $101.64
• Price Target Upside: 11.82% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 19
• EPS Forecast (FY): 4.28
• Revenue Forecast (FY): $28.52B

• Rating: 69 Neutral
• Price Target: $103.00 ▲(13.31% Upside)

Southern Co's overall stock score reflects strong earnings call performance and stable financials, despite challenges in cash flow and technical indicators suggesting short-term bearish momentum. The company's strategic investments and robust dividend yield provide a balanced outlook.

Positive Factors

Revenue Growth

Consistent revenue growth reflects Southern Co's ability to expand its market presence and maintain demand for its services, supporting long-term stability.

Operational Efficiency

Improved operational efficiency suggests effective cost management and resource utilization, enhancing profitability and competitive positioning.

Customer Growth

Growth in customer base and electricity usage indicates robust demand and the company's ability to capture market opportunities, driving future revenue.

Negative Factors

Free Cash Flow Challenges

Negative free cash flow growth highlights potential liquidity issues, limiting the company's ability to invest in growth opportunities and manage debt.

High Debt Levels

Despite improvement, high debt levels can strain financial flexibility and increase risk, affecting long-term financial health and investment capacity.

Moody's Negative Outlook

A negative outlook from Moody's can impact investor confidence and increase borrowing costs, potentially affecting future financial strategies.

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's revenue model is largely based on regulated utility operations, where it earns a return on investment approved by state utility commissions. Key revenue streams include retail electricity sales, natural gas distribution services, and long-term contracts for energy generation. Additionally, Southern Company invests in renewable energy projects and may receive incentives or subsidies for clean energy initiatives. The company has established partnerships with various energy firms and governmental bodies to enhance its service offerings and expand its renewable energy portfolio, further contributing to its earnings.

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	14.03B	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: 90.90
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• 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 90.9 is below the 20-day moving average (MA) of 95.82, below the 50-day MA of 94.19, and above the 200-day MA of 90.39, indicating a neutral trend. The MACD of -0.86 indicates Positive momentum. The RSI at 31.67 is Neutral, neither overbought nor oversold. The STOCH value of 10.68 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
DUK	75 Outperform	$96.29B	20.25	9.60%	3.39%	4.07%	9.94%
NEE	73 Outperform	$170.13B	25.94	12.48%	2.66%	26.96%	-6.80%
AEP	72 Outperform	$64.39B	17.60	12.85%	3.20%	7.66%	37.42%
EXC	72 Outperform	$46.86B	16.60	10.31%	3.36%	6.07%	15.20%
SO	69 Neutral	$100.65B	22.72	13.06%	2.99%	9.40%	-6.05%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
D	63 Neutral	$50.65B	20.19	9.27%	4.53%	12.72%	4.90%

Southern Co Corporate Events

Southern Company Q3 2025 Earnings Call Highlights

The Southern Company’s recent earnings call conveyed an optimistic sentiment, highlighting robust financial performance and growth in its customer base and energy usage. The company also showcased significant economic development activities. However, challenges such as rising costs and a negative outlook from Moody’s were acknowledged, alongside caution regarding future nuclear expansion.

The Southern Company Reports Strong Q3 2025 Earnings

The Southern Company, a major player in the energy sector, operates as a leading utility company providing electricity and natural gas across the southeastern United States. It is known for its diversified energy portfolio and commitment to sustainable energy solutions.

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.

The most recent analyst rating on (SO) stock is a Hold with a $99.00 price target. To see the full list of analyst forecasts on Southern Co stock, see the SO Stock Forecast page.