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Algonquin Power & Utilities (TSE:AQN)
TSX:AQN
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Algonquin Power & Utilities
(TSX:AQN)
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Rating:54Neutral
Price Target:
C$8.50
▼(-5.56% Downside)
Algonquin Power & Utilities faces significant financial challenges, including declining revenues and high leverage, which weigh heavily on its overall score. The earnings call provided some optimism with strong financial performance and regulatory progress, but ongoing restructuring costs and customer service issues remain concerns. Technical indicators suggest a neutral trend, while the valuation is impacted by negative earnings but supported by a decent dividend yield.
Positive Factors
Regulatory Progress
Regulatory progress ensures stable revenue streams and enhances long-term operational predictability, supporting sustainable growth.
Leadership Change
New CFO with extensive experience may bring fresh strategic insights, potentially improving financial management and operational efficiency.
Operational Improvements
Operational improvements reduce costs, enhancing profitability and cash flow, which supports long-term financial health and competitiveness.
Negative Factors
High Leverage
High leverage poses financial risk, limiting flexibility and increasing vulnerability to interest rate changes, impacting long-term stability.
Declining Revenue
Declining revenue indicates potential market challenges and could pressure profitability, affecting the company's ability to invest in growth.
Restructuring Costs
Ongoing restructuring costs strain financial resources, potentially delaying profitability improvements and impacting long-term financial health.
Algonquin Power & Utilities (AQN) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$6.91B
Dividend Yield4.32%
Average Volume (3M)2.76M
Price to Earnings (P/E)―
Beta (1Y)0.79
Revenue Growth-4.72%
EPS Growth96.98%
CountryCA
Employees3,786
SectorUtilities
Sector Strength65
IndustryRenewable Utilities
Share Statistics
EPS (TTM)0.13
Shares Outstanding768,246,030
10 Day Avg. Volume2,301,381
30 Day Avg. Volume2,756,751
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)0.69
Price to Sales (P/S)1.40
P/FCF Ratio-8.72
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$9.38Price Target Upside4.22% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)0.51
Revenue Forecast (FY)C$3.51B
Algonquin Power & Utilities Business Overview & Revenue Model
Company DescriptionAlgonquin Power & Utilities Corp., through its subsidiaries, owns and operates a portfolio of regulated and non-regulated generation, distribution, and transmission utility assets. The company operates through two segments, Regulated Services Group and Renewable Energy Group. The Regulated Services Group segment operates a portfolio of rate-regulated utilities located in the United States, Canada, Chile, and Bermuda. Its utilities provide distribution services to approximately 1,093,000 customer connections in the electric, natural gas, and water and wastewater sectors The Renewable Energy Group segment generates and sells electrical energy, capacity, ancillary products, and renewable attributes produced by its portfolio of renewable and clean power generation facilities primarily in the United States and Canada. It owns and operates hydroelectric, wind, solar, and thermal facilities; and owns and operates a portfolio of clean energy and water infrastructure assets. The company was incorporated in 1988 and is headquartered in Oakville, Canada.
How the Company Makes MoneyAlgonquin Power & Utilities generates revenue primarily through its two segments: the Renewable Energy Group and the Utilities Group. In the Renewable Energy Group, the company earns money from the sale of electricity generated from its renewable energy facilities, often through long-term power purchase agreements (PPAs) with utility companies and large consumers. This segment benefits from government incentives and subsidies for renewable energy production. The Utilities Group generates revenue by providing regulated utility services to customers, which includes collecting fees for electricity, natural gas, and water services. The revenue in this segment is typically stable and predictable due to regulated pricing structures set by government authorities. Additionally, AQN often engages in strategic partnerships and acquisitions to expand its renewable energy portfolio and enhance its utility operations, further contributing to its earnings.
Algonquin Power & Utilities Earnings Call Summary
Earnings Call Date:Nov 07, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 26, 2026
Earnings Call Sentiment Neutral
Algonquin Power & Utilities Corp. reported a strong financial performance with significant earnings growth and regulatory progress. Leadership changes and operational improvements were notable highlights. However, challenges remain with regulatory settlements, restructuring costs, and customer billing systems.Q3-2025 Updates
Positive Updates
Strong Financial Performance
Third quarter adjusted net earnings from continuing operations were $71.7 million, up approximately 10% from $64.9 million in 2024. Adjusted net earnings per share increased by 13% from $0.08 in Q3 2024 to $0.09 in Q3 2025.
Leadership Announcement
Robert Stefani will join as Chief Financial Officer on January 5, 2026, bringing extensive experience from Southwest Gas Holdings and PECO Energy.
Regulatory Progress
Approval of EnergyNorth rate case settlement and pending CalPeco rate case settlement, with ongoing hearings for New England Natural Gas and Litchfield Park cases.
Operational Improvements
Lower operating and interest expenses contributed positively to the quarter, with a reduction in interest expenses by $8.9 million.
Negative Updates
Regulatory Challenges
Empire Electric settlement requires further work to align on specific metrics and milestones, with feedback indicating more effort needed to improve customer service.
Restructuring Costs
Incurred $9.6 million in restructuring costs for the quarter and $22 million year-to-date, with more expected as part of ongoing restructuring efforts.
Customer Billing System Challenges
Ongoing issues with customer billing systems, requiring improvements to ensure better customer outcomes and satisfaction.
Company Guidance
During Algonquin Power & Utilities Corp.'s third quarter 2025 earnings call, key guidance included strong financial performance with a 10% increase in adjusted net earnings from continuing operations, reaching $71.7 million compared to $64.9 million in 2024. Adjusted net earnings per share also rose by 13% to $0.09 from $0.08 in the previous year. The company maintained its 2025 financial outlook, emphasizing growth from the implementation of approved rates and favorable weather conditions. They reported on regulatory proceedings, with $73.6 million in rate requests pending from New England and Litchfield Park cases. Operationally, cost-cutting measures contributed to lower operating expenses, with a noted $9 million timing effect expected to reverse in Q4. Additionally, restructuring costs were significant at $9.6 million for the quarter. The company's portfolio strategy aims to enhance value while reducing risk, with a focus on maintaining a stable balance sheet and pursuing opportunities aligned with their pure-play regulated strategy.Algonquin Power & Utilities Financial Statement Overview
Summary
Algonquin Power & Utilities is facing financial challenges with declining revenues, significant net losses, and high leverage. While gross profit margins are strong, the company struggles with profitability and cash flow management. The high debt levels pose a risk to financial stability, and the negative return on equity indicates poor shareholder returns.Income Statement
The income statement shows a declining revenue trend with a negative revenue growth rate of -2.89% in the TTM. The company is experiencing significant net losses, with a net profit margin of -57.66% in the TTM. Gross profit margin remains relatively strong at 74.06%, but the negative net income is a concern. EBIT and EBITDA margins are moderate, indicating some operational efficiency, but overall profitability is weak.45
Neutral
Balance Sheet
The balance sheet reveals a high debt-to-equity ratio of 1.35 in the TTM, indicating significant leverage. Return on equity is negative, reflecting the company's inability to generate positive returns for shareholders. The equity ratio is not explicitly calculated, but the high leverage suggests potential financial risk. Overall, the balance sheet shows financial instability due to high debt levels.50
Neutral
Cash Flow
Cash flow analysis indicates negative free cash flow growth of -7.04% in the TTM, with free cash flow to net income ratio also negative. Operating cash flow is positive but insufficient to cover net losses, as reflected in the operating cash flow to net income ratio of 0.47. The cash flow situation highlights liquidity challenges and the need for improved cash management.40
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.38B | 2.32B | 2.40B | 2.77B | 2.27B | 1.68B |
| Gross Profit | 885.96M | 845.26M | 836.51M | 1.05B | 858.10M | 759.16M |
| EBITDA | 808.96M | 831.16M | 816.62M | 955.99M | 758.75M | 655.26M |
| Net Income | -1.37B | -1.38B | 28.67M | -211.99M | 264.86M | 782.46M |
Balance Sheet | ||||||
| Total Assets | 13.69B | 16.96B | 18.37B | 17.63B | 16.80B | 13.22B |
| Cash, Cash Equivalents and Short-Term Investments | 54.30M | 34.84M | 25.05M | 57.62M | 125.16M | 101.61M |
| Total Debt | 6.34B | 6.73B | 7.51B | 7.53B | 6.25B | 4.60B |
| Total Liabilities | 8.57B | 10.78B | 11.43B | 10.47B | 9.10B | 7.23B |
| Stockholders Equity | 4.68B | 4.71B | 5.04B | 5.22B | 5.86B | 5.20B |
Cash Flow | ||||||
| Free Cash Flow | -409.51M | -371.94M | -404.59M | -455.94M | -1.17B | -295.05M |
| Operating Cash Flow | 449.20M | 458.59M | 638.22M | 600.67M | 154.82M | 530.84M |
| Investing Cash Flow | 2.06B | 176.05M | -1.00B | -1.47B | -656.52M | -1.28B |
| Financing Cash Flow | -2.57B | -579.38M | 340.20M | 808.32M | 534.21M | 798.30M |
Algonquin Power & Utilities Technical Analysis
Positive
9.00
Price Trends
8.48
Positive
8.16
Positive
7.89
Positive
Market Momentum
0.16
Negative
65.39
Neutral
76.61
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:AQN, the sentiment is Positive. The current price of 9 is above the 20-day moving average (MA) of 8.65, above the 50-day MA of 8.48, and above the 200-day MA of 7.89, indicating a bullish trend. The MACD of 0.16 indicates Negative momentum. The RSI at 65.39 is Neutral, neither overbought nor oversold. The STOCH value of 76.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:AQN.
Algonquin Power & Utilities Peers Comparison
UnderperformOutperform
Sector (66)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
58 Neutral | C$264.85M | -16.41 | -4.69% | 7.11% | 8.26% | -267.17% | |
56 Neutral | C$26.86B | -32.17 | -5.58% | 5.56% | 14.78% | -9.37% | |
54 Neutral | C$6.91B | -164.53 | 2.04% | 4.32% | -4.72% | 96.98% | |
53 Neutral | C$5.01B | -17.61 | -7.06% | 6.80% | -4.86% | -86.64% | |
50 Neutral | C$159.13M | 11.43 | 8.55% | ― | -30.92% | ― | |
47 Neutral | C$2.76B | -120.05 | -1.47% | 2.62% | -11.91% | -132.41% |
* Utilities Sector Average
TSE:AQN
Algonquin Power & Utilities
9.00
2.83
45.82%
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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.