Southwest Gas (SWX) AI Stock Analysis

• Market Cap: $5.77B
• Dividend Yield: 3.1%
• Average Volume (3M): 355.36K
• Price to Earnings (P/E): 12.5
• Beta (1Y): 0.37
• Revenue Growth: -23.15%
• EPS Growth: 157.45%
• Country: US
• Employees: 11,122
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Gas
• EPS (TTM): 3.74
• Shares Outstanding: 72,183,910
• 10 Day Avg. Volume: 296,272
• 30 Day Avg. Volume: 355,355
• PEG Ratio: 0.85
• Price to Book (P/B): 1.45
• Price to Sales (P/S): 0.99
• P/FCF Ratio: 12.39
• Enterprise Value/Market Cap: 1.46
• Enterprise Value/Revenue: 2.10
• Enterprise Value/Gross Profit: 8.13
• Enterprise Value/Ebitda: 9.64
• 1Y Price Target: $86.50
• Price Target Upside: 8.38% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 5.52
• Revenue Forecast (FY): $3.74B

• Rating: 74 Outperform
• Price Target: $91.00 ▲(14.02% Upside)

Southwest Gas Holdings scores a 74, driven by strong earnings call highlights and attractive valuation metrics. The company's technical indicators suggest positive momentum, while financial performance shows resilience in profitability and cash generation despite high leverage. The positive sentiment from the earnings call and strategic achievements further bolster confidence in the stock's future performance.

Positive Factors

Cash Generation

Significant improvement in free cash flow indicates robust cash generation, enhancing financial flexibility and supporting future investments.

Credit Rating Upgrade

A credit rating upgrade to BBB+ reflects improved financial health and lowers borrowing costs, supporting long-term growth and stability.

Successful Disposition of Centuri

The sale of Centuri strengthens the balance sheet by reducing debt, allowing Southwest Gas to focus on core operations and strategic growth.

Negative Factors

Revenue Decline

A significant decline in revenue growth can impact long-term profitability and market position, necessitating strategic adjustments to reverse the trend.

High Leverage

High leverage can strain financial resources and limit flexibility, posing risks to operational stability and investment capacity.

Departure of CFO

The departure of the CFO may disrupt strategic continuity and financial oversight, potentially affecting long-term strategic execution.

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 the sale and distribution of natural gas to its customers. The revenue model is largely based on regulated rates set by state utility commissions, which determine how much the company can charge customers for gas and related services. Key revenue streams include residential, commercial, and industrial natural gas sales, along with transportation revenue from delivering gas to customers. The company also earns revenue through various infrastructure projects and investments, which may involve partnerships with local governments and other stakeholders to expand service capabilities. Furthermore, Southwest Gas benefits from energy efficiency programs and incentives that promote reduced consumption and operational efficiency, contributing to its overall earnings.

Southwest Gas Financial Statement Overview

Summary

Southwest Gas demonstrates a mixed financial performance. The income statement shows stable profitability margins despite declining revenue, while the balance sheet indicates high leverage but some improvement in debt management. The cash flow statement is particularly strong, with significant growth in free cash flow. Overall, the company exhibits resilience in profitability and cash generation, though high leverage remains a risk factor.

Income Statement

Southwest Gas shows a mixed performance in its income statement. The TTM data indicates a decline in revenue growth by 15.99%, which is concerning. However, the company maintains a relatively stable gross profit margin of 22.75% and a net profit margin of 4.06%. The EBIT and EBITDA margins are healthy at 12.31% and 21.85%, respectively, indicating operational efficiency. Despite the revenue decline, profitability margins remain stable, reflecting effective cost management.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 1.27 in the TTM period, which is an improvement from previous years but still indicates significant leverage. Return on equity is modest at 5.45%, suggesting moderate profitability relative to shareholder investment. The equity ratio stands at 38.02%, showing a reasonable level of equity financing. While leverage is a concern, the company has shown some improvement in reducing its debt levels.

Cash Flow

Cash flow analysis highlights a strong free cash flow growth rate of 3395.61% in the TTM period, indicating significant improvement in cash generation. The operating cash flow to net income ratio is 0.65, and the free cash flow to net income ratio is 0.015, suggesting that cash flows are not fully aligned with net income. Despite this, the substantial growth in free cash flow is a positive indicator of financial health.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.00B	5.11B	5.43B	4.96B	3.68B	3.30B
Gross Profit	1.03B	1.01B	1.02B	994.87M	820.93M	818.49M
EBITDA	871.25M	976.78M	930.54M	439.87M	737.09M	748.24M
Net Income	463.92M	198.81M	150.89M	-203.29M	200.78M	232.32M
Balance Sheet
Total Assets	10.33B	12.02B	11.87B	13.20B	12.77B	8.74B
Cash, Cash Equivalents and Short-Term Investments	778.63M	363.79M	106.54M	123.08M	222.70M	83.35M
Total Debt	3.51B	5.06B	5.28B	5.99B	6.32B	2.88B
Total Liabilities	6.40B	8.33B	8.46B	9.98B	9.61B	5.90B
Stockholders Equity	3.93B	3.50B	3.31B	3.06B	2.95B	2.67B
Cash Flow
Free Cash Flow	-130.51M	409.86M	-363.31M	-451.96M	-604.24M	-199.03M
Operating Cash Flow	675.95M	1.36B	509.21M	407.46M	111.38M	626.08M
Investing Cash Flow	-19.06M	-921.57M	150.97M	-838.90M	-3.04B	-802.07M
Financing Cash Flow	-334.30M	-176.34M	-700.79M	356.48M	3.06B	209.57M

Southwest Gas Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 79.81
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 79.81 is below the 20-day moving average (MA) of 80.61, below the 50-day MA of 79.89, and above the 200-day MA of 75.61, indicating a neutral trend. The MACD of -0.04 indicates Positive momentum. The RSI at 47.28 is Neutral, neither overbought nor oversold. The STOCH value of 29.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SWX.

Southwest Gas Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SWX	74 Outperform	$5.77B	12.45	5.42%	3.10%	-23.15%	157.45%
UGI	70 Outperform	$8.10B	12.20	14.87%	3.97%	1.10%	140.04%
OGS	67 Neutral	$4.72B	18.36	8.51%	3.45%	15.06%	12.27%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
CPK	64 Neutral	$3.25B	24.34	9.13%	2.11%	17.15%	15.00%
SR	64 Neutral	$4.86B	18.85	8.20%	3.82%	-4.50%	2.49%
NJR	64 Neutral	$4.49B	13.39	14.62%	4.02%	13.94%	13.93%

Southwest Gas Corporate Events

Southwest Gas Enters Registration Rights Agreement

On November 26, 2025, Southwest Gas Holdings, Inc. entered into a Registration Rights Agreement with the Icahn Group, granting them certain registration rights. Additionally, the company appointed Justin S. Forsberg as Senior Vice President/Chief Financial Officer, effective December 1, 2025, marking a significant leadership change. Forsberg’s extensive experience in finance and accounting, along with his previous roles at IDACORP, Inc. and Idaho Power Company, positions him well for his new responsibilities. The company also filed a prospectus supplement to register the resale of shares held by selling stockholders, although it will not receive proceeds from these sales.

Southwest Gas Announces CFO Departure Effective December

On November 5, 2025, Southwest Gas Holdings, Inc. announced the departure of Robert J. Stefani, the Senior Vice President/Chief Financial Officer, effective December 1, 2025. His departure is amicable and not due to any disagreements with the company’s management or auditors. The company has initiated a search for his successor. As part of his transition, Mr. Stefani will receive cash payments and prorated stock units, contingent upon his compliance with the separation agreement and continued service until his separation date.

Southwest Gas Updates Cooperation Agreement with Icahn

On October 14, 2025, Southwest Gas Holdings, Inc. and the Icahn Group entered into an Amended and Restated Cooperation Agreement, which updates their previous agreement from October 15, 2024. The new agreement includes the nomination of Icahn Designees for the 2026 annual meeting and outlines conditions for the termination of the agreement, impacting the company’s governance structure and potentially its strategic direction.