Algonquin Power & Utilities (AQN) AI Stock Analysis

• Market Cap: $6.23B
• Dividend Yield: 0.57%
• Average Volume (3M): 1.51M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.27
• Revenue Growth: -4.74%
• EPS Growth: -213.24%
• Country: CA
• Employees: 3,786
• Sector: Utilities
• Sector Strength: 78
• Industry: Renewable Utilities
• EPS (TTM): 0.13
• Shares Outstanding: 767,830,260
• 10 Day Avg. Volume: 1,442,364
• 30 Day Avg. Volume: 1,508,899
• PEG Ratio: -0.30
• Price to Book (P/B): 0.99
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -10.19
• Enterprise Value/Market Cap: 1.75
• Enterprise Value/Revenue: 3.57
• Enterprise Value/Gross Profit: 22.57
• Enterprise Value/Ebitda: 9.96
• 1Y Price Target: $8.67
• Price Target Upside: 6.76% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 10

• Rating: 56 Neutral
• Price Target: C$9.00 ▲(10.84%Upside)

The overall stock score is 55.5, primarily influenced by financial performance challenges including net losses and high debt levels. Technical analysis shows some positive price trends, but valuation concerns due to a negative P/E ratio offset these gains. The dividend yield provides some support, appealing to income-focused investors.

Positive Factors

Earnings Potential

Management outlines an ambitious EPS growth path, which suggests strong future earnings potential.

Investor Confidence

Significant accretive acquisition drives target price bump, reflecting investor confidence in strategic moves.

Leadership and Strategy

The new CEO is viewed positively and the transition to a pure-play utility with an improved balance sheet and transparency is seen as beneficial.

Negative Factors

Guidance and Expectations

AQN did not unveil its formal 2025 guidance with Q4/24 results as previously messaged, which disappointed the market.

Market Performance

The rating on AQN is lowered to Market Perform from Outperform despite strong initial results.

Stock Volatility

AQN stock initially sold off aggressively at the open, down as much as ~10.0%, due to the EPS miss, lack of 2025 guidance, and expected delay in the Empire Electric Missouri rate decision.

Algonquin Power & Utilities Business Overview & Revenue Model

Company Description

Algonquin Power & Utilities Corp. (AQN) is a diversified international generation, transmission, and distribution utility company. It operates through two primary segments: the Regulated Services Group and the Renewable Energy Group. The Regulated Services Group is involved in the ownership and operation of electric, natural gas, water distribution, and wastewater collection utility systems. The Renewable Energy Group focuses on renewable energy solutions, including wind, solar, and hydroelectric power generation facilities. AQN is dedicated to providing sustainable energy and utility services to communities across North America.

How the Company Makes Money

Algonquin Power & Utilities Corp. generates revenue primarily through two segments: Regulated Services and Renewable Energy. The Regulated Services segment earns income from the ownership and operation of utility systems that provide essential services such as electricity, natural gas, and water to residential, commercial, and industrial customers. These services are often provided under regulated rate structures, ensuring a stable and predictable revenue stream. The Renewable Energy segment generates revenue by producing and selling electricity from its portfolio of wind, solar, and hydroelectric power generation facilities. Additionally, AQN may enter into power purchase agreements (PPAs) with other utilities or businesses to sell its renewable energy output, providing a steady income source. The company's strategic investments in both regulated and renewable sectors, along with its focus on sustainable energy solutions, contribute significantly to its earnings.

Algonquin Power & Utilities Financial Statement Overview

Summary

Algonquin Power & Utilities is facing significant financial headwinds, with ongoing net losses impacting profitability and returns on equity. While operational efficiency is evident through reasonable EBIT and EBITDA margins, the high debt levels and negative cash flows could pose risks. The company must focus on improving revenue growth and managing debt to enhance financial stability and shareholder value.

Income Statement

The income statement shows a mixed performance. The gross profit margin for TTM (Trailing-Twelve-Months) is strong at 75.43%, but the company is grappling with significant net losses, as evidenced by a negative net profit margin of -48.77% for TTM. Revenue has declined from previous years, indicating challenges in maintaining growth. The EBIT and EBITDA margins are reasonable, at 19.51% and 39.23% respectively for TTM, suggesting operational efficiency amidst financial pressures.

Balance Sheet

The balance sheet reflects a moderate level of financial stability. The debt-to-equity ratio is 1.35 for TTM, indicating moderate leverage, which is common in the utilities sector. The return on equity (ROE) is concerning at -25.45% for TTM, reflecting the impact of net losses on shareholders' returns. However, the equity ratio is healthy at 34.36% for TTM, indicating a decent cushion of equity to cover assets and liabilities.

Cash Flow

The cash flow statement reveals challenges in cash management. The operating cash flow to net income ratio is negative due to net losses, and free cash flow remains negative for TTM at -457.60 million. While operating cash flow is positive at 424.87 million, the negative free cash flow highlights substantial capital expenditures, which require careful management to avoid liquidity issues.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.32B	2.70B	2.77B	2.27B	1.68B
Gross Profit	1.73B	1.06B	1.90B	1.56B	1.28B
EBITDA	1.04B	732.98M	1.08B	772.86M	655.26M
Net Income	-1.38B	28.67M	-308.15M	264.86M	782.46M
Balance Sheet
Total Assets	16.96B	18.37B	17.63B	16.79B	13.22B
Cash, Cash Equivalents and Short-Term Investments	34.84M	56.14M	57.62M	125.16M	101.61M
Total Debt	6.70B	8.52B	7.51B	6.21B	4.54B
Total Liabilities	10.78B	11.43B	10.47B	9.08B	7.23B
Stockholders Equity	4.71B	5.04B	5.22B	5.86B	5.20B
Cash Flow
Free Cash Flow	-390.70M	-398.14M	-469.93M	-1.19B	-280.81M
Operating Cash Flow	481.72M	628.03M	619.10M	157.47M	505.22M
Investing Cash Flow	132.74M	-1.10B	-1.79B	-1.80B	-1.23B
Financing Cash Flow	-556.41M	442.81M	1.11B	1.67B	766.86M

Algonquin Power & Utilities Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 8.12
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 8.12 is above the 20-day moving average (MA) of 8.03, above the 50-day MA of 7.86, and above the 200-day MA of 6.98, indicating a bullish trend. The MACD of 0.12 indicates Negative momentum. The RSI at 57.15 is Neutral, neither overbought nor oversold. The STOCH value of 51.60 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NPI	73 Outperform	$5.97B	22.93	6.08%	5.42%	-5.33%	―
Sector *	67 Neutral	$16.73B	16.83	4.48%	3.29%	4.73%	5.95%
PIF	66 Neutral	C$255.15M	59.81	-4.70%	6.89%	-1.45%	-210.16%
BLX	56 Neutral	C$3.25B	295.23	0.67%	2.09%	-16.63%	-87.78%
AQN	56 Neutral	$6.23B	―	5.54%	0.57%	-4.74%	-213.24%
BEP.UN	55 Neutral	C$24.98B	―	-5.97%	0.16%	22.01%	-183.73%