Algonquin Power & Utilities (AQN) AI Stock Analysis

• Market Cap: C$6.00B
• Dividend Yield: 5.45%
• Average Volume (3M): 2.13M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.25
• Revenue Growth: -4.84%
• EPS Growth: -213.24%
• Country: CA
• Employees: 3,786
• Sector: Utilities
• Sector Strength: 83
• Industry: Renewable Utilities
• EPS (TTM): 0.14
• Shares Outstanding: 767,830,260
• 10 Day Avg. Volume: 2,064,136
• 30 Day Avg. Volume: 2,133,390
• PEG Ratio: -0.28
• Price to Book (P/B): 0.91
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -9.38
• Enterprise Value/Market Cap: 1.76
• Enterprise Value/Revenue: 1.04
• Enterprise Value/Gross Profit: 5.71
• Enterprise Value/Ebitda: 3.12
• 1Y Price Target: C$7.81
• Price Target Upside: -0.02% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 8

Algonquin Power & Utilities faces significant financial challenges, notably net losses and high debt levels, which impact the overall score. However, operational efficiencies and strategic rate increases offer some positive outlook. The stock shows stable technical momentum, though valuation remains a concern with a negative P/E ratio. The positive earnings call and strong dividend yield provide some support, but risks from ongoing investigations and customer service issues weigh on the overall assessment.

Positive Factors

Earnings Performance

AQN reported Q1 adjusted EPS significantly above expectations due to favorable weather, new rates, and beneficial items.

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 solid share performance more than reflects the positive outlook, suggesting limited short-term upside.

Algonquin Power & Utilities Business Overview & Revenue Model

Company Description

Algonquin 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 Money

Algonquin Power & Utilities Corp. generates revenue primarily through its two business segments. The Regulated Services segment earns income by providing utility services, including electricity, natural gas, and water distribution, to residential, commercial, and industrial customers. These services are typically provided under regulated rate structures, ensuring a stable and predictable revenue stream. The Renewable Energy segment contributes to revenue by generating and selling electricity from its portfolio of renewable energy facilities, such as wind, solar, and hydroelectric power plants. The company often enters into long-term power purchase agreements (PPAs) with utilities and other entities, securing a consistent income from energy sales. Additionally, strategic acquisitions and partnerships help AQN expand its market presence and enhance its ability to generate sustainable revenue growth.

Algonquin Power & Utilities Financial Statement Overview

Summary

Algonquin Power & Utilities is experiencing financial headwinds, with significant net losses affecting profitability and return on equity. Despite this, the company shows operational efficiency through reasonable EBIT and EBITDA margins. High debt levels and negative cash flows pose risks, necessitating a focus on revenue growth and debt management to enhance financial stability.

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
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.45B	2.32B	2.70B	2.77B	2.29B	1.68B
	Gross Profit
1.85B	1.73B	1.06B	1.90B	1.57B	1.28B
	EBIT
477.81M	446.09M	467.29M	621.52M	419.25M	384.09M
	EBITDA
960.99M	1.04B	732.98M	1.08B	758.75M	655.26M
	Net Income Common Stockholders
-1.19B	-1.38B	28.67M	-308.15M	185.66M	782.46M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
72.20M	34.84M	56.14M	57.62M	125.16M	101.61M
	Total Assets
13.66B	16.96B	18.37B	17.63B	16.79B	13.22B
	Total Debt
6.32B	6.70B	8.52B	7.51B	6.21B	4.54B
	Net Debt
6.25B	6.66B	8.46B	7.45B	6.09B	4.44B
	Total Liabilities
8.51B	10.78B	11.43B	10.47B	9.08B	7.23B
	Stockholders Equity
4.69B	4.71B	5.04B	5.22B	5.86B	5.20B
Cash Flow		Free Cash Flow
-457.60M	-390.70M	-398.14M	-469.93M	-1.19B	-280.81M
	Operating Cash Flow
424.87M	481.72M	628.03M	619.10M	157.47M	505.22M
	Investing Cash Flow
2.08B	132.74M	-1.10B	-1.79B	-1.80B	-1.23B
	Financing Cash Flow
-2.52B	-556.41M	442.81M	1.11B	1.67B	766.86M

Algonquin Power & Utilities Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 7.81
• 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 7.81 is above the 20-day moving average (MA) of 7.56, above the 50-day MA of 7.29, and above the 200-day MA of 6.86, indicating a bullish trend. The MACD of 0.17 indicates Negative momentum. The RSI at 57.66 is Neutral, neither overbought nor oversold. The STOCH value of 34.30 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
INE	73 Outperform	C$2.76B	69.30	4.20%	2.65%	0.97%	―
Sector *	63 Neutral	$8.53B	10.18	4.66%	4.38%	3.77%	-12.97%
PIF	62 Neutral	C$250.68M	59.81	-4.70%	6.99%	-1.45%	-210.16%
AQN	58 Neutral	C$6.00B	―	5.54%	5.45%	-4.84%	-213.24%
BLX	57 Neutral	C$3.06B	278.22	0.67%	2.22%	-16.63%	-87.78%