Pinnacle West Capital (PNW)
Utilities · $12.8B market cap · SEC CIK 0000764622
ahead of 44% of the S&P 500 · #15 of 31 in Utilities
Next reports on Feb 23, 2027, after the close, with analysts expecting −$0.10 in earnings per share.
52-week range $86.18 to $111.16. 5% below its 52-week high and 23% above its low.
The case for PNW
- Pays a 4.8% dividend while you wait.
- Moves less than the market (beta 0.47).
The case against
- Burned $820M of free cash in FY2025.
- Long-term debt of $9.2B would take 5 years of operating cash flow to repay.
- Current liabilities exceed current assets (ratio 0.71).
What the score is made of
Each factor is half a curve over reported figures and half a rank among the other Utilities companies (momentum is judged against fixed thresholds only), and the five are blended by weight. The score is where that blend places it in the S&P 500. It describes the last filing and the current price. It is not a forecast.
| Valuewhat you pay for the earnings and cash, against the growth you get | 60 |
|---|---|
| Growthhow fast revenue and earnings are moving, this year and over five | 53 |
| Profitabilityhow much of the revenue becomes profit, and how much of that is cash | 23 |
| Momentumhow the price has behaved lately | 71 |
| Stabilityhow violently it moves, what it owes and what it pays you | 79 |
- Each factor except momentum is half fixed thresholds, half rank among the 31 Utilities companies.
The financials
Revenue growth
Is the business growing? Slowly
| Last 12 months | +7.5% |
|---|---|
| Over 5 years | +8.3% a year |
| FY2025 revenue | $5.3B (+4%) |
Free cash flow
Is it generating real cash? No, it is burning cash
| FY2025 free cash flow | −$820M |
|---|---|
| Of revenue | −15% |
| Of profit | −130% |
Profit margins
Is profitability improving? Holding steady
| Gross margin | n/a |
|---|---|
| Operating margin | 21% |
| Net margin, FY24 → FY25 → now | 12.2% → 11.8% → 11.6% |
Debt vs. cash
Is the balance sheet healthy? Stretched
| Cash | $6.6M |
|---|---|
| Long-term debt | $9.2B |
| Net debt | $9.2B |
| Years to repay | 5.1 yrs |
Valuation
Is the stock price reasonable? Yes, about fair
| P/E | 19.3× |
|---|---|
| Fair P/E for its growth | 23× |
| Forward P/E | 19.5× |
| EV / EBITDA | 11.3× |
At 19.3× earnings it trades below the 23× that 6% a year of growth plus a 4.8% dividend would justify. As a utility it is judged on earnings alone: it borrows to build, so its free cash flow says little about its price.
The financials, five years deep
Pulled from Pinnacle West Capital's XBRL filings on SEC EDGAR. Italic rows are worked out from the others.
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Revenue growth | |||||
| Revenue | $5.3B | $5.1B | $4.7B | $4.3B | $3.8B |
| Change on the year | +4% | +9% | +9% | +14% | — |
| Free cash flow | |||||
| Free cash flow | −$820M | −$639M | −$639M | −$466M | −$613M |
| Of revenue | −15% | −12% | −14% | −11% | −16% |
| Profit margins | |||||
| Operating margin | 20.0% | 19.7% | 17.6% | 16.9% | 21.2% |
| Net margin | 11.8% | 12.2% | 11.0% | 11.6% | 16.7% |
| Debt vs. cash | |||||
| Cash | $6.6M | $3.8M | $5.0M | $4.8M | $10.0M |
| Long-term debt | $9.2B | $8.1B | $7.5B | $7.7B | $6.9B |
| Net cash (debt) | −$9.2B | −$8.1B | −$7.5B | −$7.7B | −$6.9B |
What Pinnacle West Capital says it does
Pinnacle West Pinnacle West is an investor-owned electric utility holding company based in Phoenix, Arizona with consolidated assets of approximately $30 billion. We derive essentially all of our revenues and earnings from our principal subsidiary, APS. Since 1886, APS and its affiliates have provided energy and energy-related products to people and businesses throughout Arizona. APS is Arizona’s largest and longest-serving electric company and generates safe, affordable electricity in 11 of Arizona’s 15 counties. Our other active subsidiaries are El Dorado and PNW Power. Our reportable business segment is our regulated electricity segment, which consists of traditional regulated retail and wholesale electricity businesses (primarily electric service to Native Load customers) and related activities, and includes electricity generation, transmission, and distribution. Our reportable business segment activities are conducted primarily…