One-glance verdict
Overvalued
$-102.92 our estimate vs market $98.92
Wall Street consensus: $102.93 (-200.0% lower than our fair-value estimate)
196% below our estimate, beyond the bull case
Fundamentals snapshot
Pinnacle West Capital Corporation
PNW · NYQ · Utilities · Utilities - Regulated Electric
Current price
$98.92
52-week range
$86.18 - $111.16
Market cap
$11.99B
Balance sheet
Distressed
2.53x Stretched
Net debt $16.50B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 4.0% last year.
- Reward Free cash flow was positive in 1/10 years.
- Risk Net debt grew 61.1% over 3 years.
- Risk Stock trades 11.9% above its 5-year average P/E.
What this company does
Pinnacle West Capital Corporation
Pinnacle West Capital Corporation is an electric utility company that generates, transmits, and distributes electricity to homes and businesses in Arizona. Most of its money comes from selling electricity to these customers, and this matters because it powers everything from our lights to our refrigerators, making the company essential for daily life in its service area.
How the company got here
Pinnacle West Capital Corporation's roots trace back to 1886 with the formation of the Phoenix Light and Fuel Company, which aimed to provide electricity and heat to the growing city of Phoenix. Over the decades, through a series of mergers and acquisitions, it evolved into Arizona Public Service (APS), the state's largest electric utility. The company became a holding company in 1985, reorganizing as AZP Group Inc. before adopting its current name, Pinnacle West Capital Corporation, in 1987. This strategic shift allowed it to operate as a parent company overseeing APS and other energy-related ventures. The company has a long history of providing dividends to shareholders, a practice that began in 1920 and continued uninterrupted until 1989.
What it actually does
Pinnacle West Capital Corporation, primarily through its subsidiary Arizona Public Service (APS), generates, transmits, and distributes electricity to customers across Arizona. They operate a diverse portfolio of power generation facilities, including those powered by nuclear, natural gas, coal, and solar energy. APS serves approximately 1.4 million homes and businesses, making it a critical provider of essential energy services in the state. The company is focused on meeting the energy needs of a growing Arizona while also working towards a sustainable energy future.
Arizona Public Service (APS)
Arizona Public Service (APS) is the core business of Pinnacle West Capital Corporation and is the largest electric utility in Arizona. It is responsible for generating, transmitting, and distributing electricity to about 1.4 million residential and business customers across 11 of Arizona's 15 counties. APS utilizes a variety of energy sources, including nuclear, natural gas, coal, and solar, to provide reliable power. This segment represents the vast majority of Pinnacle West's operations and revenue, serving as the primary engine for the company's financial performance.
Energy Generation and Transmission
Beyond the direct retail services provided by APS, Pinnacle West also engages in the broader energy infrastructure landscape. This includes owning and operating various electricity-generating facilities, such as the Palo Verde Nuclear Generating Station, which is one of the largest power producers in the United States. The company also develops, builds, and operates electric transmission infrastructure across the western U.S. This segment ensures the reliable flow of electricity from power plants to distribution networks, supporting both APS and potentially other energy markets.
What management is betting on now
Pinnacle West's management is focused on several key strategic priorities to drive future growth and value. A major emphasis is on investing heavily in infrastructure, with plans to spend billions of dollars on generation, transmission, and distribution to support Arizona's rapid economic and population growth. This includes accommodating new large customers like data centers and manufacturing facilities. The company is also committed to a sustainable energy future, aiming for carbon-neutral energy by 2050, while balancing this with reliability and affordability for its customers. They are also working on improving how they recover investment costs through innovative rate designs and regulatory agreements.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$-32.65M
FY2024 Q4
$-92.13M
FY2025 Q1
$-220.66M
FY2025 Q2
$-448.08M
FY2025 Q3
$41.95M
FY2025 Q4
$-192.74M
FY2026 Q1
$-393.06M
FY2026 Q2
$-334.69M
Revenue
$1.46B
Net income
—
Diluted EPS
1.43
Operating cash flow
$393.98M
Free cash flow
$-334.69M
Fetching…
Sources
Revenue
$1.15B
Net income
—
Diluted EPS
0.27
Operating cash flow
$235.30M
Free cash flow
$-393.06M
Fetching…
Sources
Revenue
$1.13B
Net income
—
Diluted EPS
0.12
Operating cash flow
$476.78M
Free cash flow
$-192.74M
Fetching…
Sources
Revenue
$1.82B
Net income
—
Diluted EPS
3.39
Operating cash flow
$664.99M
Free cash flow
$41.95M
Fetching…
Sources
Revenue
$1.36B
Net income
—
Diluted EPS
1.58
Operating cash flow
$261.43M
Free cash flow
$-448.08M
Fetching…
Sources
Revenue
$1.03B
Net income
—
Diluted EPS
-0.04
Operating cash flow
$401.89M
Free cash flow
$-220.66M
Fetching…
Sources
Revenue
$1.10B
Net income
—
Diluted EPS
-0.04
Operating cash flow
$439.49M
Free cash flow
$-92.13M
Fetching…
Sources
Revenue
$1.77B
Net income
—
Diluted EPS
3.37
Operating cash flow
$633.19M
Free cash flow
$-32.65M
Fetching…
Sources
Is it cheap or expensive?
Fair value $-102.92 vs current price $98.92
Wall Street consensus is the average analyst price target: $102.93 (-200.0% lower than our fair-value estimate).
Our most-likely fair value is $-102.92 a share — about 204.0% below today's price of $98.92, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Distressed
Net debt $16.5B. Interest coverage 2.5x.
Net debt
$16.50B
Interest coverage
2.53x
Pinnacle West Capital Corporation's profit covers its interest bill about 2.5 times over. which is stronger than most peers shown here.
Distressed
Worse cushion
Baseline
Better cushion
PNW
BASELINE
Pinnacle West Capital Corporation
Total debt $16.51B Interest coverage 2.53x This is the baseline the peer rows are being compared against.
Total debt $110.20B Interest coverage 1.75x -31% vs PNW Carries about 1.4x less debt cushion than PNW.
Total debt $77.09B Interest coverage 2.25x -11% vs PNW Has roughly the same debt cushion as PNW.
Total debt $92.21B Interest coverage 2.36x -7% vs PNW Has roughly the same debt cushion as PNW.
Total debt $53.53B Interest coverage 2.66x +5% vs PNW Has roughly the same debt cushion as PNW.
Total debt $41.65B Interest coverage 2.14x -15% vs PNW Carries about 1.2x less debt cushion than PNW.
What you should know
The case for and against PNW
3 Rewards
2 Risks
Rewards
-
Revenue grew 4.0% last year.
-
Free cash flow was positive in 1/10 years.
-
Trades at 19.0x P/E vs peer median 20.2x (6.1% cheaper).
Risks
-
Net debt grew 61.1% over 3 years.
-
Stock trades 11.9% above its 5-year average P/E.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
18.99x
Forward P/E
17.71x
P/B
1.70x
P/S
2.16x
EV/EBITDA
13.27x
PEG ratio
3.55x
Profitability
How much profit each dollar creates
Gross margin
43.4%
Operating margin
21.3%
Net margin
11.5%
ROE
9.4%
ROA
2.3%
Health
Liquidity and balance-sheet strength
Debt / equity
2.33x
Current ratio
0.59x
Quick ratio
0.31x
Total debt
$16.51B
Total cash
$9.12M
Growth
How the business has been compounding
Revenue TTM
$5.55B
Revenue 5Y CAGR
8.9%
EPS TTM
5.21
EPS 5Y CAGR
5.8%
Cash flow
How much cash the business throws off
Operating CF TTM
$1.77B
Free CF TTM
$-819.52M
FCF margin
-14.8%
Dividend
Shareholder payout
Yield
3.7%
Payout ratio
69.6%
Last ex-div date
2026-08-03