Southwest Gas (SWX) AI Stock Analysis

• Market Cap: $5.30B
• Dividend Yield: 3.36%
• Average Volume (3M): 446.08K
• Price to Earnings (P/E): 23.7
• Beta (1Y): 0.50
• Revenue Growth: -10.78%
• EPS Growth: 16.27%
• Country: US
• Employees: 11,122
• Sector: Utilities
• Sector Strength: 76
• Industry: Regulated Gas
• EPS (TTM): 1.58
• Shares Outstanding: 71,912,674
• 10 Day Avg. Volume: 379,841
• 30 Day Avg. Volume: 446,078
• PEG Ratio: 2.84
• Price to Book (P/B): 1.64
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -9.41
• Enterprise Value/Market Cap: 1.27
• Enterprise Value/Revenue: 0.33
• Enterprise Value/Gross Profit: 6.35
• Enterprise Value/Ebitda: 1.76
• 1Y Price Target: $75.75
• Price Target Upside: 2.46% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

• Rating: 68 Neutral
• Price Target: $79.00 ▲(6.86%Upside)

Southwest Gas's overall score reflects its operational efficiency and strategic growth plans, tempered by high leverage and valuation concerns. Positive developments in regulatory outcomes and expansion projects support future growth potential.

Positive Factors

Financial Performance

SWX delivered net income growth of ~8% through the execution of their regulatory strategy, effective cost management, and strong customer growth.

Regulatory Environment

The ongoing improvements to Arizona's regulatory environment serve as an important factor, with Arizona making up ~55% of SWX's rate base.

Negative Factors

Business Separation

Low visibility to conclusion of a prolonged separation of its weakening utility infrastructure services business continues to place a meaningful overhang on the stock.

Divestiture Challenges

Monetizing 81% of a spin will be tricky, and if SWX is unable to sell its CTRI stake efficiently or is forced to do so at lower prices, there is potential for additional financing needs to weigh on EPS growth.

Southwest Gas Business Overview & Revenue Model

Company Description

Southwest Gas Holdings, Inc., through its subsidiaries, distributes and transports natural gas in Arizona, Nevada, and California. The company operates through Natural Gas Distribution, Utility Infrastructure Services, and Pipeline and Storage segments. It also provides trenching, installation, and replacement of underground pipes, as well as maintenance services for energy distribution systems. As of December 31, 2021, it had 2,159,000 residential, commercial, industrial, and other natural gas customers. Southwest Gas Holdings, Inc. was incorporated in 1931 and is headquartered in Las Vegas, Nevada.

How the Company Makes Money

Southwest Gas generates revenue primarily through its natural gas operations and utility infrastructure services. The natural gas operations segment involves the sale and distribution of natural gas to residential, commercial, and industrial customers. Revenue in this segment is largely driven by regulated rates approved by state utility commissions, which consider factors such as operating costs and a return on investment. Additionally, Southwest Gas benefits from infrastructure investments that enhance service reliability and efficiency, leading to potential rate adjustments and increased earnings. The utility infrastructure services segment, conducted through its subsidiary Centuri Group, provides construction and maintenance services for energy distribution systems. This segment earns revenue by securing contracts with utility companies to install, repair, and maintain pipelines and related infrastructure. Strategic partnerships with municipalities and utility companies, as well as a focus on expanding infrastructure capabilities, further bolster the company's revenue streams.

Southwest Gas Financial Statement Overview

Summary

The company shows strengths in operational efficiency and cash generation, but faces challenges with growth and leverage. Revenue growth has declined by 11.25%, and a high debt-to-equity ratio of 1.41 indicates significant financial leverage. However, strong operational cash flow suggests robust cash earnings.

Income Statement

Southwest Gas shows a mixed performance in its income statement. The gross profit margin is robust at around 22% for TTM, indicating efficient cost control relative to revenue. However, the net profit margin is relatively low at approximately 4.66%, suggesting limited profitability after expenses. The revenue growth rate has declined by 11.25% from the previous year, reflecting challenges in maintaining sales momentum. EBIT and EBITDA margins are stable, with TTM figures of 10.9% and 21.1% respectively, indicating consistent operational efficiency.

Balance Sheet

The balance sheet reflects some concerns over leverage and equity strength. Southwest Gas has a high debt-to-equity ratio of 1.41, indicating significant reliance on debt financing, which could pose risks in a rising interest rate environment. The return on equity is relatively low at 6.29%, suggesting modest returns generated from shareholders' equity. The equity ratio stands at 29.63%, pointing to a moderate proportion of assets financed by equity, which is reasonable for the industry but leaves room for improvement in financial stability.

Cash Flow

The cash flow statement presents a positive picture with strong operational cash generation. The operating cash flow to net income ratio is high at 4.91, indicating robust cash earnings compared to reported profits. However, free cash flow has shown volatility with a notable decline in the TTM. The free cash flow to net income ratio stands at 0.85, suggesting that the company is generating sufficient cash to cover net income but needs to strengthen its free cash flow position for greater financial flexibility.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
4.83B	5.11B	5.43B	4.96B	3.68B	3.30B
	Gross Profit
1.06B	1.01B	1.02B	994.87M	820.93M	818.49M
	EBIT
526.07M	483.77M	418.33M	1.15B	1.09B	423.00M
	EBITDA
1.02B	976.78M	930.54M	439.87M	726.57M	735.01M
	Net Income Common Stockholders
224.95M	198.81M	150.89M	-1.62B	200.78M	232.32M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
406.30M	363.79M	106.54M	123.08M	222.70M	83.35M
	Total Assets
12.08B	12.02B	11.87B	13.20B	12.77B	8.74B
	Total Debt
5.05B	5.06B	5.44B	5.99B	6.32B	2.88B
	Net Debt
4.64B	4.69B	5.33B	5.87B	6.10B	2.80B
	Total Liabilities
8.32B	8.33B	8.46B	9.98B	9.61B	5.90B
	Stockholders Equity
3.58B	3.50B	3.31B	3.06B	2.95B	2.67B
Cash Flow		Free Cash Flow
191.12M	409.86M	-363.31M	-451.96M	-604.24M	-199.03M
	Operating Cash Flow
1.10B	1.36B	509.21M	407.46M	111.38M	626.08M
	Investing Cash Flow
-908.42M	-921.57M	150.97M	-838.90M	-3.04B	-802.07M
	Financing Cash Flow
-246.16M	-176.34M	-700.79M	356.48M	3.06B	209.57M

Southwest Gas Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 73.93
• 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 SWX, the sentiment is Positive. The current price of 73.93 is above the 20-day moving average (MA) of 71.78, above the 50-day MA of 71.57, and above the 200-day MA of 72.24, indicating a bullish trend. The MACD of 0.45 indicates Negative momentum. The RSI at 58.15 is Neutral, neither overbought nor oversold. The STOCH value of 83.44 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SWX.

Southwest Gas Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
UGI	76 Outperform	$7.70B	14.78	10.84%	4.14%	-4.30%	―
SR	73 Outperform	$4.26B	17.82	7.30%	4.35%	-7.10%	2.54%
NJR	71 Outperform	$4.46B	10.76	17.83%	4.07%	20.30%	63.69%
SWX	68 Neutral	$5.30B	23.65	6.49%	3.36%	-10.78%	16.27%
CPK	67 Neutral	$2.78B	22.03	9.04%	2.30%	20.41%	13.64%
OGS	65 Neutral	$4.30B	17.33	8.08%	3.73%	7.73%	2.36%
Sector *	64 Neutral	$8.51B	10.30	4.25%	5.64%	4.06%	-12.76%

Southwest Gas Corporate Events

Southwest Gas Completes Major Stock Offering

Southwest Gas Holdings, Inc. announced the completion of an underwritten offering on June 18, 2025, where it sold 11,212,500 shares of Centuri Holdings, Inc. common stock, generating net proceeds of approximately $225 million. The company plans to use these proceeds to repay outstanding debt, while maintaining a majority stake in Centuri. Additionally, a concurrent private placement with Icahn Partners LP is expected to raise approximately $22 million, contingent upon regulatory approval.

The most recent analyst rating on (SWX) stock is a Hold with a $76.00 price target. To see the full list of analyst forecasts on Southwest Gas stock, see the SWX Stock Forecast page.

Southwest Gas Closes 2028 Expansion Project Season

On June 5, 2025, Southwest Gas Holdings, Inc. announced that its subsidiary, Great Basin Gas Transmission Company, successfully closed its 2028 Expansion Project Binding Open Season. This development is significant for the company’s operations as it reflects progress in their expansion efforts, potentially enhancing their market positioning in the gas transmission industry.

The most recent analyst rating on (SWX) stock is a Hold with a $76.00 price target. To see the full list of analyst forecasts on Southwest Gas stock, see the SWX Stock Forecast page.

Southwest Gas Announces Leadership Changes with Colvin’s Retirement

Southwest Gas Holdings, Inc. and Southwest Gas Corporation announced that Lori L. Colvin, Vice President/Controller/Chief Accounting Officer, will retire effective June 1, 2025. Consequently, Robert J. Stefani, currently the Senior Vice President/Chief Financial Officer, has been appointed as the interim Controller and principal accounting officer starting the same date, while the company continues its search for a permanent replacement.

The most recent analyst rating on (SWX) stock is a Hold with a $76.00 price target. To see the full list of analyst forecasts on Southwest Gas stock, see the SWX Stock Forecast page.

Southwest Gas Completes Share Offering and Private Placement

On May 20, 2025, Southwest Gas Holdings, Inc. entered into an underwriting agreement to sell 9,000,000 shares of its Centuri Holdings, Inc. common stock, with an option for underwriters to purchase an additional 1,350,000 shares. The offering closed on May 22, 2025, generating net proceeds of approximately $175 million, which the company intends to use for debt repayment. Concurrently, Southwest Gas also completed a private placement of 2,857,142 shares to Icahn Partners, raising an additional $50 million. Furthermore, the company decided not to pursue a tax-free spin-off of Centuri, leading to the expiration of related rights on May 20, 2025.

The most recent analyst rating on (SWX) stock is a Hold with a $76.00 price target. To see the full list of analyst forecasts on Southwest Gas stock, see the SWX Stock Forecast page.