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Southwest Gas Corp. (SWX)
NYSE:SWX
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Southwest Gas (SWX) AI Stock Analysis

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SWX

Southwest Gas

(NYSE:SWX)

Rating:65Neutral
Price Target:
$86.00
â–˛(9.95% Upside)
Southwest Gas's overall stock score is driven by strong earnings call performance and positive technical indicators. However, financial performance concerns, particularly around cash flow and high leverage, weigh down the score. The valuation suggests the stock might be overvalued, but the dividend yield offers some compensation. Corporate events add a positive note with strategic expansion progress.
Positive Factors
Capital Investment
Great Basin expansion emerges as transformative growth catalyst, representing ~$1.2bn of incremental capital investment at attractive returns, driven by unprecedented regional demand.
Earnings and Growth
SWX delivered net income growth of ~8% through the execution of their regulatory strategy, effective cost management, and strong customer growth.
Regulatory Environment
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 Risks
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 (SWX) vs. SPDR S&P 500 ETF (SPY)

Southwest Gas Business Overview & Revenue Model

Company DescriptionSouthwest Gas Corporation (SWX) is a natural gas utility company that provides essential services to residential, commercial, and industrial customers in the southwestern United States, primarily in Arizona, Nevada, and California. The company operates through two primary segments: its Utility segment, which delivers natural gas to customers, and its Infrastructure segment, which focuses on the development and maintenance of natural gas infrastructure. Southwest Gas is committed to providing safe, reliable, and affordable natural gas services while investing in sustainable energy solutions.
How the Company Makes MoneySouthwest Gas generates revenue primarily through the sale of natural gas to its utility customers. The company earns money by charging customers for the gas consumed as well as for the distribution of that gas through its pipeline network. Revenue is driven by the volume of gas sold, which is influenced by factors such as customer demand, weather conditions, and regulatory pricing structures. Additionally, the company may earn income through its Infrastructure segment, which includes construction services for natural gas pipelines and related facilities. Regulatory frameworks play a significant role in how Southwest Gas sets its rates, as they must obtain approval from state utility commissions to adjust prices. The company also benefits from partnerships with other energy providers and infrastructure companies, which can enhance its service offerings and operational efficiency.

Southwest Gas Earnings Call Summary

Earnings Call Date:Aug 06, 2025
(Q2-2025)
|
% Change Since: -0.91%|
Next Earnings Date:Nov 05, 2025
Earnings Call Sentiment Positive
The call highlighted strong financial performance with record net income and successful financial and operational strategies, including the Great Basin expansion and Centuri sell-downs. However, there were some regulatory challenges and increased interest expenses that need addressing.
Q2-2025 Updates
Positive Updates
Record Net Income
Southwest Gas posted record net income for the first half of 2025 with modest increases in O&M expenses compared to the same period last year.
Great Basin Expansion Project
The Great Basin expansion project received interest for approximately 1.76 billion cubic feet of capacity, significantly higher than the existing capacity of 250,000 dekatherms per day, with potential capital expenditures ranging from $1.2 billion to $1.6 billion.
Centuri Sell-Downs
Successfully executed two secondary public offerings of Centuri shares, generating over $470 million in net proceeds to repay debt and strengthen the balance sheet.
Regulatory Advancements
Achieved constructive regulatory outcomes including a $600 million rate base increase in Arizona and the signing of SB 417 in Nevada for alternative ratemaking.
Negative Updates
System Integrity Mechanism Cap
Arizona's System Integrity Mechanism was capped at $50 million, prompting Southwest Gas to evaluate options including potential rehearing applications.
Interest Expense Increase
Interest expenses rose due to the over-collected purchased gas adjustment (PGA) balance, moving from an $82 million asset to a $349 million liability.
Company Guidance
During the Southwest Gas Holdings Second Quarter 2025 Earnings Conference Call, key metrics were highlighted, emphasizing the company's progress and future guidance. Southwest Gas Holdings achieved a trailing 12-month return on equity (ROE) of 8.3%, with a record net income for the first half of 2025 and only modest increases in operations and maintenance (O&M) expenses. The company reaffirmed its full-year net income guidance of $265 million to $275 million and projected robust capital spending driven by safety, reliability, and economic activity. Additionally, Southwest Gas Holdings reported a successful exit from Centuri, generating over $470 million in net proceeds, and emphasized investments in infrastructure with planned capital expenditures ranging from $1.2 billion to $1.6 billion for the Great Basin expansion project. The company also highlighted regulatory achievements, including a $600 million increase in authorized rate base in Arizona and legislative advancements in Nevada, positioning itself for continued growth and value delivery.

Southwest Gas Financial Statement Overview

Summary
Southwest Gas demonstrates strengths in operational efficiency and cash generation, but faces challenges with growth and leverage. The company should focus on enhancing profitability and reducing financial leverage to improve its financial health.
Income Statement
65
Positive
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
58
Neutral
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
72
Positive
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue4.77B5.11B5.43B4.96B3.68B3.30B
Gross Profit1.08B1.01B1.02B994.87M820.93M818.49M
EBITDA1.04B976.78M930.54M439.87M726.57M735.01M
Net Income193.73M198.81M150.89M-1.62B200.78M232.32M
Balance Sheet
Total Assets12.21B12.02B11.87B13.20B12.77B8.74B
Cash, Cash Equivalents and Short-Term Investments355.63M363.79M106.54M123.08M222.70M83.35M
Total Debt4.68B5.06B5.44B5.99B6.32B2.88B
Total Liabilities8.09B8.33B8.46B9.98B9.61B5.90B
Stockholders Equity3.67B3.50B3.31B3.06B2.95B2.67B
Cash Flow
Free Cash Flow14.07M409.86M-363.31M-451.96M-604.24M-199.03M
Operating Cash Flow923.11M1.36B509.21M407.46M111.38M626.08M
Investing Cash Flow-891.70M-921.57M150.97M-838.90M-3.04B-802.07M
Financing Cash Flow-275.29M-176.34M-700.79M356.48M3.06B209.57M

Southwest Gas Technical Analysis

Technical Analysis Sentiment
Positive
Last Price78.22
Price Trends
50DMA
76.08
Positive
100DMA
73.40
Positive
200DMA
72.97
Positive
Market Momentum
MACD
0.28
Positive
RSI
56.01
Neutral
STOCH
23.82
Neutral
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 78.22 is above the 20-day moving average (MA) of 77.81, above the 50-day MA of 76.08, and above the 200-day MA of 72.97, indicating a bullish trend. The MACD of 0.28 indicates Positive momentum. The RSI at 56.01 is Neutral, neither overbought nor oversold. The STOCH value of 23.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SWX.

Southwest Gas Risk Analysis

Southwest Gas disclosed 39 risk factors in its most recent earnings report. Southwest Gas reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Southwest Gas Peers Comparison

Overall Rating
UnderperformOutperform
Sector (55)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
$4.81B11.7118.03%3.76%21.88%71.35%
71
Outperform
$4.60B16.838.37%3.99%-6.65%11.47%
71
Outperform
$2.99B22.699.25%2.05%19.02%20.13%
68
Neutral
$4.62B18.378.24%3.47%13.43%6.49%
68
Neutral
$7.59B18.628.75%4.25%-0.52%-39.42%
65
Neutral
$5.63B29.135.41%3.17%-10.07%5.98%
55
Neutral
AU$2.03B8.325.71%3.98%25.29%-112.53%
* Utilities Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SWX
Southwest Gas
78.22
7.79
11.06%
CPK
Chesapeake Utilities
127.19
11.84
10.26%
SR
Spire
77.86
15.12
24.10%
NJR
New Jersey Resources
47.91
3.48
7.83%
UGI
UGI
35.32
11.74
49.79%
OGS
ONE Gas
76.99
10.49
15.77%

Southwest Gas Corporate Events

Private Placements and FinancingM&A TransactionsBusiness Operations and Strategy
Southwest Gas Sells Centuri Shares, Raises $325 Million
Neutral
Aug 12, 2025

On August 11, 2025, Southwest Gas Holdings, Inc. completed an underwritten offering of 17,250,000 shares of Centuri Holdings, Inc. common stock, generating approximately $325 million in net proceeds. The company plans to use these funds for debt repayment and general corporate purposes. Concurrently, Southwest Gas also closed a private placement with Icahn Investors, selling 1,573,500 shares for approximately $31 million. As a result of these transactions, Southwest Gas no longer holds a controlling interest in Centuri and will deconsolidate its financial statements, reflecting Centuri’s results as discontinued operations.

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.

Executive/Board Changes
Southwest Gas Appoints New Chief Accounting Officer
Neutral
Jul 9, 2025

On July 2, 2025, Southwest Gas Holdings, Inc. and Southwest Gas Corporation announced the appointment of Mr. Fabio A. Pineda as Vice President/Controller/Chief Accounting Officer, effective July 17, 2025. Mr. Pineda, who has an extensive background in accounting and finance, will replace Robert J. Stefani, who will continue as Senior Vice President/Chief Financial Officer. This strategic appointment is aimed at strengthening the company’s financial leadership and ensuring continuity in its financial operations, with Mr. Pineda bringing valuable experience from his previous role at Sempra.

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.

Private Placements and FinancingBusiness Operations and Strategy
Southwest Gas Sells Centuri Shares for $22 Million
Neutral
Jul 8, 2025

On July 8, 2025, Southwest Gas Holdings, Inc. completed the sale of 1,060,240 shares of Centuri Holdings, Inc. common stock to Icahn Partners LP and Icahn Partners Master Fund LP for $20.75 per share, generating approximately $22 million in net proceeds. This transaction, exempt from registration, allows Southwest Gas to maintain a 52.1% ownership in Centuri, potentially impacting its strategic positioning and financial flexibility.

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.

Private Placements and FinancingBusiness Operations and Strategy
Southwest Gas Amends Term Loan Agreement
Neutral
Jul 2, 2025

On June 27, 2025, Southwest Gas Holdings, Inc. amended its Term Loan Credit Agreement, extending the maturity date to June 26, 2026, and reducing the lenders’ commitments from $550 million to $225 million. Additionally, the company entered into a new Revolving Credit Agreement with a $300 million capacity, replacing an existing facility and maturing on August 1, 2029. These financial adjustments are aimed at optimizing the company’s credit structure and financial flexibility.

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.

Private Placements and FinancingBusiness Operations and Strategy
Southwest Gas Amends Revolving Credit Agreement
Neutral
Jul 2, 2025

On June 27, 2025, Southwest Gas Corporation amended its Revolving Credit Agreement originally dated August 1, 2024. The amendment introduced a swingline sub-facility and a new one-week interest period option with a rate based on Daily Simple SOFR plus a margin, potentially impacting the company’s financial flexibility and operational financing strategies.

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.

Private Placements and FinancingBusiness Operations and Strategy
Southwest Gas Completes Major Stock Offering
Neutral
Jun 18, 2025

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.

Business Operations and Strategy
Southwest Gas Closes 2028 Expansion Project Season
Positive
Jun 6, 2025

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.

Executive/Board Changes
Southwest Gas Announces Leadership Changes with Colvin’s Retirement
Neutral
Jun 3, 2025

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.

Private Placements and FinancingBusiness Operations and Strategy
Southwest Gas Completes Share Offering and Private Placement
Neutral
May 22, 2025

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.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 14, 2025