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Txnm Energy, Inc. (TXNM)
:TXNM
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TXNM Energy (TXNM) AI Stock Analysis

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TXNM

TXNM Energy

(NYSE:TXNM)

Rating:68Neutral
Price Target:
$62.00
▲(9.44% Upside)
TXNM Energy's overall score reflects strong revenue growth and strategic investments, tempered by high leverage and cash flow challenges. The stock's technical indicators suggest moderate bullish momentum, while its high valuation could limit upside potential. Positive earnings call sentiment and strategic corporate events support the score.
Positive Factors
Growth Outlook
The growth outlook is solid with a bullish EPS growth expectation of 7-9%.
Regulatory Success
TXNM's regulatory success is highlighted as a key driver of growth.
Negative Factors
Equity Needs
Equity needs for the company increased to $1.3B in the 2025-29 period to support the $7.8B capex plan.
Wildfire Risk
Wildfire risk is acknowledged as an obstacle to achieving a higher valuation.

TXNM Energy (TXNM) vs. SPDR S&P 500 ETF (SPY)

TXNM Energy Business Overview & Revenue Model

Company DescriptionTXNM Energy (TXNM) is a leading energy company focused on providing innovative solutions in the renewable energy sector. Operating primarily within the solar and wind energy markets, TXNM develops, finances, and operates a diverse portfolio of clean energy projects. The company is committed to sustainability and reducing carbon emissions while delivering reliable energy to residential, commercial, and industrial customers. TXNM's core products include solar photovoltaic systems, wind turbines, and energy storage solutions, all designed to promote energy efficiency and independence.
How the Company Makes MoneyTXNM Energy generates revenue through several key streams. Primarily, the company earns income from the sale of electricity generated from its renewable energy projects, which are often tied to long-term power purchase agreements (PPAs) with utility companies and large corporate clients. Additionally, TXNM benefits from tax incentives and subsidies related to renewable energy production, which enhance its profitability. The company also engages in the sale of renewable energy credits (RECs) to other companies looking to meet sustainability goals, providing another revenue channel. Strategic partnerships with technology providers and financial institutions further support its operations, aiding in project financing and the development of innovative energy solutions that drive additional revenue growth.

TXNM Energy Earnings Call Summary

Earnings Call Date:Aug 01, 2025
(Q1-2025)
|
% Change Since: |
Next Earnings Date:Oct 24, 2025
Earnings Call Sentiment Positive
The earnings call presented a generally positive outlook with strong growth metrics, successful regulatory approvals, and supportive legislative developments. However, challenges such as transmission pressures, insurance costs, and ongoing regulatory lag concerns were noted.
Q1-2025 Updates
Positive Updates
Ongoing Earnings and Growth Targets
Ongoing earnings for Q1 were $0.19, in line with expectations, affirming guidance for 2025 at $2.74 to $2.84 per share with a long-term EPS growth target of 7% to 9%.
System Resiliency Plan Approval
Approval to invest and recover $546 million in capital improvements, enhancing system protection and response to extreme weather events.
TNMP System Peak and Load Growth
TNMP set a new system peak, 22% higher than last year's Q1, driven by a 9.7% increase in demand-based load, particularly in North and West Texas.
Legislative Support in New Mexico
Key bills passed to expedite infrastructure development, creating a wildfire task force, and allowing for site readiness to attract new businesses.
Regulatory Success at TNMP and PNM
Approval of $83 million transmission rate base investments and $176 million distribution rate-based investments, along with positive outcomes in rate reviews and resource filings.
Negative Updates
Transmission and Demand Charge Pressures
Lower transmission margins and higher demand charges from energy storage agreements impacted earnings, though mitigated by deferrals.
Insurance Premiums and Plant Outage Costs
Higher insurance premiums and timing of plant outage costs offset some earnings benefits.
Regulatory Lag Challenges
Discussions around regulatory lag and capital structure continue, with focus on rate design and addressing regulatory lag in Texas.
Potential Tariff Impacts
Tariffs are expected to have about a 2% impact, requiring ongoing adjustments in capital allocation.
Company Guidance
During the TXNM Energy Q1 2025 Conference Call, the company reaffirmed its guidance for 2025 with an earnings per share (EPS) range of $2.74 to $2.84, alongside a long-term EPS growth target of 7% to 9%. The company reported ongoing earnings of $0.19 per share for the first quarter, highlighting progress in regulatory approvals and capital investments. TXNM Energy's system resiliency plan, approved for $546 million, and the Permian Basin Reliability Study, involving a $750 million investment by 2030, were key highlights. The company noted a 22% increase in TNMP's system peak and a 9.7% growth in demand-based load, largely driven by commercial growth in North and West Texas. The legislative environment was favorable, with new bills passed to support infrastructure development and wildfire prevention. TXNM Energy plans to maintain its five-year capital plan, increasing from $600 million in 2025 to over $1 billion by 2028, to support a 17% rate base growth.

TXNM Energy Financial Statement Overview

Summary
TXNM Energy shows strong revenue growth and solid profitability margins. However, high leverage and negative free cash flow pose financial risks. The company needs to manage costs and improve cash flow to strengthen its financial position.
Income Statement
75
Positive
TXNM Energy's income statement shows a strong revenue growth rate of 71% in the TTM period, indicating robust top-line expansion. The gross profit margin remains healthy at approximately 64%, although it has slightly decreased from previous years. Net profit margin has declined to 8.76% in the TTM, down from 12.31% in 2024, reflecting increased costs or reduced pricing power. EBIT and EBITDA margins are solid, but have seen a slight decline, suggesting some pressure on operational efficiency.
Balance Sheet
65
Positive
The balance sheet reveals a high debt-to-equity ratio of 1.82 in the TTM, indicating significant leverage, which could pose financial risk. However, the company has improved its equity position, with stockholders' equity increasing over time. Return on equity has decreased to 6.64% in the TTM, down from 9.52% in 2024, suggesting reduced profitability on shareholders' investments. The equity ratio is stable, reflecting a balanced asset structure.
Cash Flow
55
Neutral
TXNM Energy's cash flow statement highlights challenges with negative free cash flow, which has worsened in the TTM period. The operating cash flow to net income ratio is 0.43, indicating that cash generation from operations is not fully covering net income. The free cash flow to net income ratio is negative, reflecting cash flow constraints. Despite these issues, operating cash flow remains positive, providing some liquidity cushion.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue2.03B1.97B1.94B2.25B1.78B1.52B
Gross Profit1.30B1.29B1.05B1.11B991.09M937.79M
EBITDA927.32M929.21M634.58M682.44M663.84M639.95M
Net Income177.94M242.68M88.35M170.06M196.36M173.30M
Balance Sheet
Total Assets11.68B11.21B10.25B9.26B8.67B7.94B
Cash, Cash Equivalents and Short-Term Investments22.17M4.50M2.21M4.08M1.10M47.93M
Total Debt5.80B5.80B4.96B4.37B3.84B3.44B
Total Liabilities8.45B8.62B7.84B7.00B6.43B5.82B
Stockholders Equity3.18B2.55B2.36B2.20B2.18B2.06B
Cash Flow
Free Cash Flow-790.59M-738.88M-524.64M-345.27M-387.14M-193.33M
Operating Cash Flow483.43M508.16M551.17M567.28M547.87M485.70M
Investing Cash Flow-1.31B-1.17B-1.09B-950.35M-952.26M-733.80M
Financing Cash Flow839.95M684.35M537.10M386.04M357.56M292.19M

TXNM Energy Technical Analysis

Technical Analysis Sentiment
Positive
Last Price56.65
Price Trends
50DMA
56.40
Positive
100DMA
55.02
Positive
200DMA
51.79
Positive
Market Momentum
MACD
0.09
Positive
RSI
51.49
Neutral
STOCH
33.23
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TXNM, the sentiment is Positive. The current price of 56.65 is below the 20-day moving average (MA) of 56.71, above the 50-day MA of 56.40, and above the 200-day MA of 51.79, indicating a neutral trend. The MACD of 0.09 indicates Positive momentum. The RSI at 51.49 is Neutral, neither overbought nor oversold. The STOCH value of 33.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TXNM.

TXNM Energy Risk Analysis

TXNM Energy disclosed 37 risk factors in its most recent earnings report. TXNM Energy reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

TXNM Energy Peers Comparison

Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
$4.64B15.598.02%4.70%9.78%-6.19%
71
Outperform
$6.84B22.329.31%2.72%-0.48%6.40%
68
Neutral
$5.97B29.196.36%2.84%10.23%114.67%
67
Neutral
$17.66B18.135.33%3.62%7.33%12.21%
65
Neutral
$1.61B9.319.38%3.34%-9.20%-53.99%
61
Neutral
$4.87B33.532.89%6.44%-19.56%-83.31%
42
Neutral
$10.97B-11.34%92.00%
* Utilities Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TXNM
TXNM Energy
56.65
17.21
43.64%
IDA
IdaCorp
126.65
28.05
28.45%
POR
Portland GE
43.05
-2.47
-5.43%
ENIC
Enel Chile SA
3.47
0.85
32.44%
CEPU
Central Puerto SA
10.30
1.71
19.91%
OKLO
Oklo Inc
73.20
66.76
1036.65%

TXNM Energy Corporate Events

Private Placements and FinancingBusiness Operations and Strategy
TXNM Energy Enters $200M Distribution Agreement
Neutral
Aug 15, 2025

On August 15, 2025, TXNM Energy, Inc. entered into a Distribution Agreement with several financial institutions, allowing the company to sell up to $200 million of its common stock through various sales methods, including at-the-market offerings. This agreement, along with potential forward stock purchase transactions, aims to provide TXNM Energy with strategic financial flexibility, though actual sales will depend on market conditions and other factors. The company is not obligated to sell shares, and the agreement can be terminated by either party with prior notice.

Private Placements and FinancingBusiness Operations and Strategy
TXNM Energy Terminates $1.505 Billion Loan Facility
Neutral
Jul 23, 2025

On July 22, 2025, Texas-New Mexico Power Company repaid and terminated a $1.505 billion 364-day delayed-draw term loan credit facility with Wells Fargo Bank, National Association, acting as the administrative agent. This repayment and termination of the loan facility may impact the company’s financial operations and its positioning within the energy industry, potentially affecting stakeholders involved.

Private Placements and FinancingBusiness Operations and Strategy
TXNM Energy Issues $1.08B First Mortgage Bonds
Positive
Jul 22, 2025

On July 21, 2025, Texas-New Mexico Power Company (TNMP), a subsidiary of TXNM Energy, issued a series of First Mortgage Bonds totaling $1,084,300,000 in a private placement to institutional accredited investors. The proceeds from these bonds will be used to repay short-term debt and fund general corporate purposes, including capital expenditures. The bonds are secured by a first mortgage lien on TNMP’s property and include various terms and conditions, such as prepayment options and events of default. The issuance of these bonds is a strategic move to strengthen TNMP’s financial position and support its operational and capital expenditure plans.

Private Placements and FinancingM&A Transactions
TXNM Energy Enters Stock Purchase Agreement with Zimmer
Neutral
Jun 24, 2025

On June 24, 2025, TXNM Energy entered into a Stock Purchase Agreement with Zimmer Partners and other purchasers to issue 3,615,003 shares of common stock for approximately $200 million. The proceeds will be used for general corporate purposes. The agreement includes provisions for voting on a merger with Troy ParentCo LLC, making TXNM a wholly-owned subsidiary of Blackstone Infrastructure Partners’ affiliate. The shares will be listed on the NYSE, and there are restrictions on their sale until August 15, 2025.

Private Placements and FinancingFinancial Disclosures
TXNM Energy Completes Bond Prepayment Offer
Neutral
Jun 20, 2025

On June 14, 2025, Texas-New Mexico Power Company (TNMP) concluded its offer to prepay $1,505,000,000 in First Mortgage Bonds, which was initially announced on May 19, 2025. The offer resulted in $1,084,300,000 worth of bonds being validly tendered and accepted for purchase, with holders receiving the full principal amount plus accrued interest, impacting TNMP’s financial operations by reducing its outstanding bond liabilities.

Private Placements and FinancingM&A TransactionsBusiness Operations and Strategy
TXNM Energy Amends Credit Agreements Amid Merger Waivers
Neutral
May 27, 2025

On May 23, 2025, TXNM Energy, Inc. made significant amendments to its credit agreements, including its $300 million revolving credit agreement and $500 million term loan agreement, to redefine ‘Change of Control’ and waive defaults related to its merger agreement with Troy ParentCo LLC. Additionally, Texas-New Mexico Power Company amended its $200 million revolving credit agreement to prevent a Bond Repurchase Event for its $1.505 billion First Mortgage Bonds. The termination of TXNM’s $910 million Merger Backstop Revolving Facility followed these amendments, as the necessary waivers were obtained.

M&A TransactionsBusiness Operations and Strategy
TXNM Energy to be Acquired by Blackstone Infrastructure
Positive
May 19, 2025

On May 18, 2025, TXNM Energy announced an agreement to be acquired by Blackstone Infrastructure for $61.25 per share, valuing the company at $11.5 billion. The merger, expected to close in the second half of 2026, aims to provide long-term capital to support TXNM’s growth in New Mexico and Texas. TXNM will remain locally managed, with commitments to retain its workforce and honor union agreements. The transaction has been unanimously approved by TXNM’s board and awaits regulatory approvals. The acquisition is expected to enhance TXNM’s infrastructure investments and align with its long-term financing strategy, benefiting stakeholders and supporting economic development in the region.

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.Date of analysis: Aug 11, 2025