Southern Energy (SOU) AI Stock Analysis

• Market Cap: C$42.12M
• Dividend Yield: N/A
• Average Volume (3M): 594.99K
• Price to Earnings (P/E): 10.9
• Beta (1Y): -0.95
• Revenue Growth: 3.01%
• EPS Growth: 84.56%
• Country: CA
• Employees: 19
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): 0.00
• Shares Outstanding: 366,254,940
• 10 Day Avg. Volume: 651,718
• 30 Day Avg. Volume: 594,994
• PEG Ratio: 0.02
• Price to Book (P/B): 1.31
• Price to Sales (P/S): 1.20
• P/FCF Ratio: 6.50
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): -0.01
• Revenue Forecast (FY): C$38.80M

• Rating: 50 Neutral
• Price Target: C$0.07 ▲(0.00% Upside)
• Action: Reiterated Date: 01/22/26
• Date: Action: Reiterated 01/22/26

The score is held down primarily by weak financial performance, including large losses, thin gross margins, and concerning free cash flow dynamics. Technical indicators provide some support due to an improving trend and moderate momentum, but valuation remains challenged given the negative P/E and lack of dividend yield data.

Positive Factors

Stable PPA-based revenue

Long-term PPAs and contracts create durable, predictable revenue streams that reduce merchant exposure and support project financing. This stability improves cash visibility for 2-6 months and underpins the company’s ability to plan capital deployment and secure financing for new projects.

Renewable energy market tailwinds

Southern Energy operates in structural growth markets—solar and wind—backed by long-term policy and corporate decarbonization trends. These secular tailwinds support demand for new projects and consulting services, expanding addressable market and multi-year revenue opportunities.

Positive operating cash flow

Consistent positive operating cash flow indicates the core business can generate cash from operations, supporting near-term operations and project development. While capex drives negative FCF, operating cash generation is a durable foundation for funding growth or restructuring financing.

Negative Factors

Deep profitability losses

Severely negative margins show the company is burning cash on core operations; this erodes retained capital and constrains reinvestment. Without structural margin improvement or higher-margin contracts, losses will persist and undermine long-term viability and ability to scale projects.

Negative return on equity

A deeply negative ROE signals capital destruction and poor returns on invested equity. This deters equity financing, raises cost of capital, and limits ability to raise funds for new projects or acquisitions—hampering growth prospects over the medium term.

Negative free cash flow trends

Negative free cash flow growth indicates cash generation is insufficient to cover capex and investments, pressuring liquidity and increasing reliance on external financing. Persistently negative FCF can limit project execution and elevate refinancing risk over the next several quarters.

Southern Energy Business Overview & Revenue Model

Company Description

Southern Energy (SOU) is a North American energy company focused on the production and distribution of sustainable energy solutions. Operating primarily in the renewable energy sector, SOU specializes in the development and management of solar and wind energy projects. The company is committed to advancing clean energy technologies and reducing carbon emissions, offering a range of services that include energy generation, project financing, and consulting for energy efficiency improvements.

How the Company Makes Money

Southern Energy generates revenue through several key streams. The primary source of income comes from the sale of electricity generated from its renewable energy projects, which is typically sold to utility companies and large corporate buyers under long-term power purchase agreements (PPAs). Additionally, SOU earns revenue through consulting services provided to businesses and municipalities looking to implement energy efficiency solutions and renewable energy projects. Key partnerships with technology providers and local governments also enhance its project financing capabilities, allowing for the successful deployment of energy projects, which further contributes to its revenue generation.

Southern Energy Financial Statement Overview

Summary

Weak profitability and cash generation drive the score: net profit margin (-60.99%) and EBIT margin (-44.02%) are deeply negative, gross margin is low (5.84%), and free cash flow trends are concerning despite positive operating cash flow. Balance sheet leverage is moderate (debt-to-equity 0.88), but negative ROE (-68.45%) underscores ongoing losses.

Income Statement

Southern Energy's income statement reveals a challenging financial position. The TTM data shows a slight revenue growth of 5.21%, but the company is struggling with profitability, as indicated by a negative net profit margin of -60.99% and a negative EBIT margin of -44.02%. The gross profit margin is low at 5.84%, reflecting cost pressures. Historical data shows a significant revenue decline from 2022 to 2023, impacting overall performance.

Balance Sheet

The balance sheet indicates moderate leverage with a debt-to-equity ratio of 0.88 in the TTM period, which is manageable compared to previous years. However, the return on equity is negative at -68.45%, reflecting ongoing losses. The equity ratio stands at 29.87%, suggesting a stable capital structure despite profitability challenges.

Cash Flow

Cash flow analysis shows a concerning trend with negative free cash flow growth in the TTM period, despite a positive operating cash flow. The free cash flow to net income ratio is negative, indicating cash flow issues relative to earnings. The operating cash flow to net income ratio is low at 0.13, suggesting limited cash generation from operations.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	17.37M	16.08M	19.31M	45.22M	19.94M	10.43M
Gross Profit	1.69M	-233.00K	-450.00K	22.40M	6.88M	670.85K
EBITDA	940.00K	-1.36M	-34.57M	17.39M	15.55M	-2.36M
Net Income	-7.54M	-11.52M	-62.03M	9.30M	10.09M	-7.81M
Balance Sheet
Total Assets	50.63M	53.80M	67.31M	97.65M	46.21M	30.35M
Cash, Cash Equivalents and Short-Term Investments	962.00K	2.39M	3.11M	28.35M	9.62M	908.12K
Total Debt	12.09M	3.36M	15.98M	6.34M	8.97M	6.17M
Total Liabilities	35.51M	39.04M	41.49M	30.25M	22.40M	30.11M
Stockholders Equity	15.12M	14.76M	34.03M	67.40M	23.81M	243.89K
Cash Flow
Free Cash Flow	-998.00K	2.97M	-38.08M	-11.26M	345.00K	2.43M
Operating Cash Flow	1.88M	3.85M	3.70M	18.60M	2.91M	2.61M
Investing Cash Flow	-2.04M	-860.00K	-57.43M	-29.08M	-831.00K	59.60K
Financing Cash Flow	-2.34M	-3.67M	19.01M	29.27M	6.58M	-2.08M

Southern Energy Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.07
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:SOU, the sentiment is Positive. The current price of 0.07 is above the 20-day moving average (MA) of 0.07, below the 50-day MA of 0.08, and above the 200-day MA of 0.07, indicating a bullish trend. The MACD of <0.01 indicates Negative momentum. The RSI at 84.43 is Negative, neither overbought nor oversold. The STOCH value of 86.67 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:SOU.

Southern Energy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%
SOU	50 Neutral	C$42.12M	10.92	-44.92%	―	3.01%	84.56%
TAO	48 Neutral	C$20.38M	-6.10	-10.11%	―	257.86%	57.88%
WIL	48 Neutral	C$27.78M	-18.53	-276.15%	―	-3.67%	-26.40%
DME	47 Neutral	C$26.89M	-32.08	-6.13%	―	-82.16%	70.07%
AVN	47 Neutral	C$30.65M	-10.79	-15.60%	―	―	68.98%
JEV	38 Underperform	C$31.92M	-9.89	-72.40%	―	-100.00%	3.67%