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Southwest Gas
(NYSE:SWX)
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Rating:65Neutral
Price Target:
$97.00
â–²(4.22% Upside)
Action:Reiterated
Date:08/06/26
SWX scores as moderately attractive: the biggest offset is mixed fundamentals driven by persistent negative free cash flow and recent revenue volatility, despite improved profitability and balance-sheet trajectory. The earnings call adds support via reaffirmed guidance, strong liquidity, and visible growth catalysts (Great Basin and regulatory progress), while valuation is reasonable and technical signals are neutral rather than strongly bullish.
Positive Factors
Regulated utility model
Being a state-regulated local gas distributor provides stable, predictable cash flows and durable earnings drivers. Rate-setting frameworks, purchased-gas pass-throughs, and allowed returns reduce commodity exposure and support long-term recovery of capex and operating costs.
Negative Factors
Persistent negative free cash flow
Negative free cash flow across multiple years shows capital spending outstrips operating cash generation. This structural cash gap increases reliance on debt or external financing for capex and dividends, raising leverage sensitivity and reducing financial flexibility over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Regulated utility model
Being a state-regulated local gas distributor provides stable, predictable cash flows and durable earnings drivers. Rate-setting frameworks, purchased-gas pass-throughs, and allowed returns reduce commodity exposure and support long-term recovery of capex and operating costs.
Read all positive factors
Southwest Gas (SWX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.44B
Dividend Yield2.82%
Average Volume (3M)577.15K
Price to Earnings (P/E)12.5
Beta (1Y)0.29
Revenue Growth-63.47%
EPS Growth166.76%
CountryUS
Employees2,453
SectorUtilities
Sector Strength65
IndustryRegulated Gas
Share Statistics
EPS (TTM)7.18
Shares Outstanding72,445,854
10 Day Avg. Volume454,742
30 Day Avg. Volume577,151
Financial Highlights & Ratios
PEG Ratio0.11
Price to Book (P/B)1.46
Price to Sales (P/S)2.98
P/FCF Ratio-22.93
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$102.00Price Target Upside9.59% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)4.26
Revenue Forecast (FY)$1.94B
Southwest Gas Business Overview & Revenue Model
Company Description
Southwest Gas Holdings, Inc., operating through its various subsidiaries, is primarily engaged in the delivery and transportation of natural gas to customers across Arizona, Nevada, and California. The company's operations are segmented into Natur...
How the Company Makes Money
Southwest Gas primarily makes money through its regulated natural gas utility operations. The largest revenue stream is customer billings for natural gas service, which generally include (1) a commodity component for the cost of gas purchased and ...
Southwest Gas Earnings Call Summary
Earnings Call Date:Aug 05, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 11, 2026
Earnings Call Sentiment Positive
The call presents material operational and financial progress — EPS growth, improved operating margin, strong liquidity, active constructive regulatory developments, and significant commercial momentum on the Great Basin expansion. The company also faces manageable near-term headwinds: lower other income, higher depreciation and taxes, a remaining ROE gap to authorized levels, and increased capital intensity from the expanded pipeline project which introduces additional funding needs and regulatory dependency. On balance, the positive operational results, balance-sheet strength, and clear plans to finance growth and achieve regulatory outcomes outweigh the challenges.Positive Updates
Adjusted EPS Growth
Adjusted earnings per share from continuing operations increased to $0.45 in Q2 2026 from $0.37 in Q2 2025, an increase of $0.08 or approximately +21.6% year-over-year, reflecting HoldCo performance and lower interest expense after payoff of HoldCo debt.
Negative Updates
Gap to Authorized Return on Equity
12-month ended return on equity at the Utility was 8.1% (8.0% adjusted), still below the weighted average authorized return of 9.89%, indicating ongoing pressure to close the ROE gap via rate relief and recovery mechanisms.
Read all updates
Q2-2026 Updates
Positive
Negative
Adjusted EPS Growth
Adjusted earnings per share from continuing operations increased to $0.45 in Q2 2026 from $0.37 in Q2 2025, an increase of $0.08 or approximately +21.6% year-over-year, reflecting HoldCo performance and lower interest expense after payoff of HoldCo debt.
Read all positive updates
Company Guidance
Management reaffirmed 2026 and long‑term guidance while detailing key metrics: 2026 CapEx of approximately $1.25 billion, year‑end 2025 rate base $6.7 billion with an expected rate‑base CAGR of 9.5%–11.5% through 2030 (system rate base could nearly double by 2030), and Great Basin’s 2028 expansion capex now ~ $2.3 billion (about $600 million of related CapEx not yet in the long‑term outlook) with contracted demand of ~1.0 Bcf/day, an additional ~1.8 Bcf of interest for 2029–2035, estimated incremental annual margin of ~$270–300 million, FERC CPCN targeted before year‑end with approval late‑2027 and Q4‑2028 in‑service; regulatory and near‑term drivers include California decision adding ~ $40 million of incremental annual revenue (≈ $9.7 million incremental Q2 net income recognized), Nevada GRC filing seeking ~$74 million (parties’ average recommendation ~ $40 million, ~52% of request, with intervenors converging on a 9.3% ROE and equity layers ~50%–51.35% and an expected Oct‑2026 effective date), Arizona case on track for an Apr‑2027 effective date, utility 12‑month ended ROE 8.1% (8.0% adjusted) vs weighted‑average authorized ROE 9.89%; balance sheet and financing reflect ~ $270 million cash, nearly $1 billion available liquidity, consolidated net debt ~ $3.4 billion, no outstanding HoldCo debt, a planned $400 million utility bond issuance, and no near‑term equity issuance anticipated.Southwest Gas Financial Statement Overview
Summary
Income Statement
64
Positive
Balance Sheet
72
Positive
Cash Flow
48
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.74B | 1.94B | 5.11B | 5.43B | 4.96B | 3.68B |
| Gross Profit | 985.48M | 567.96M | 1.01B | 1.02B | 994.87M | 820.93M |
| EBITDA | 877.39M | 864.68M | 976.78M | 930.54M | 439.87M | 737.09M |
| Net Income | 519.34M | 439.83M | 198.81M | 150.89M | -203.29M | 200.78M |
Balance Sheet | ||||||
| Total Assets | 10.48B | 10.43B | 12.02B | 11.87B | 13.20B | 12.77B |
| Cash, Cash Equivalents and Short-Term Investments | 270.52M | 576.64M | 363.79M | 106.54M | 123.08M | 222.70M |
| Total Debt | 3.51B | 3.51B | 5.06B | 5.28B | 5.99B | 6.32B |
| Total Liabilities | 6.35B | 6.47B | 8.33B | 8.46B | 9.98B | 9.61B |
| Stockholders Equity | 4.13B | 3.96B | 3.50B | 3.31B | 3.06B | 2.95B |
Cash Flow | ||||||
| Free Cash Flow | -829.39M | -251.79M | 409.86M | -363.31M | -451.96M | -604.24M |
| Operating Cash Flow | 457.58M | 556.08M | 1.36B | 509.21M | 407.46M | 111.38M |
| Investing Cash Flow | -147.85M | -24.81M | -921.57M | 150.97M | -838.90M | -3.04B |
| Financing Cash Flow | -318.06M | -318.28M | -176.34M | -700.79M | 356.48M | 3.06B |
Southwest Gas Technical Analysis
Neutral
93.07
Price Trends
90.13
Negative
89.37
Positive
85.59
Positive
Market Momentum
0.04
Positive
45.00
Neutral
18.77
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SWX, the sentiment is Neutral. The current price of 93.07 is above the 20-day moving average (MA) of 90.63, above the 50-day MA of 90.13, and above the 200-day MA of 85.59, indicating a neutral trend. The MACD of 0.04 indicates Positive momentum. The RSI at 45.00 is Neutral, neither overbought nor oversold. The STOCH value of 18.77 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SWX.
Southwest Gas Risk Analysis
Southwest Gas disclosed 29 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
UnderperformOutperform
Sector (66)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $8.06B | 12.24 | 13.15% | 4.07% | -0.50% | 60.66% | |
66 Neutral | $3.23B | 21.47 | 9.33% | 2.05% | 14.61% | 11.96% | |
66 Neutral | $5.43B | 14.78 | 14.42% | 3.16% | 7.08% | -11.82% | |
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
65 Neutral | $6.44B | 12.47 | 12.89% | 2.69% | -63.47% | 166.76% | |
63 Neutral | $4.95B | 17.24 | 8.42% | 3.35% | -0.78% | 10.67% | |
55 Neutral | $4.78B | 9.16 | 21.42% | 3.95% | 4.12% | 93.82% |
* Utilities Sector Average
SWX
Southwest Gas
89.08
13.78
18.30%
CPK
Chesapeake Utilities
135.00
13.71
11.30%
SR
Spire
83.21
9.64
13.11%
NJR
New Jersey Resources
53.81
8.85
19.69%
UGI
UGI
38.35
4.96
14.85%
OGS
ONE Gas
80.41
7.55
10.36%
Southwest Gas Corporate Events
Executive/Board ChangesShareholder Meetings
Southwest Gas Shareholders Approve Directors and Governance Matters
Neutral
May 11, 2026
At its Annual Meeting of Stockholders held on May 7, 2026, Southwest Gas Holdings, Inc. reported that holders of approximately 64.9 million shares were represented in person or by proxy, and stockholders elected all nominated directors, including ...
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.