Breaking Down Avista Corporation (AVA) Financial Health: Key Insights for Investors

You're looking at Avista Corporation's stock and seeing a classic utility story: a solid core business fighting off a non-utility distraction. The direct takeaway is that the regulated utility segment is performing well, but you need to look past the headline numbers to see the real strength. The company is guiding for full-year 2025 consolidated earnings per diluted share between $2.52 and $2.72, but honestly, they expect to land at the low end.

That softness isn't the core business, though; Avista Utilities is actually trending toward the upper end of its $2.43 to $2.61 guidance range. The drag is a $0.16 per share loss recorded in the first three quarters of 2025 from their other, non-utility businesses-mostly valuation losses in clean technology investments. Still, the long-term plan is robust: they are defintely putting their money to work with a projected $525 million in capital expenditures for 2025, laying the groundwork for future regulated asset growth. The utility business is solid; the rest is just noise.

Revenue Analysis

Avista Corporation (AVA) is a regulated utility, so its revenue story is less about explosive growth and more about predictable, stable returns driven by infrastructure investment and regulatory outcomes. For the 2025 fiscal year, the trailing twelve months (TTM) revenue stood at approximately $1.95 Billion. This represents a modest year-over-year growth of about +2.14%, which is a steady pace for a diversified utility.

Honestly, the growth rate is less important than the source of that revenue, and for AVA, it comes from two main business segments. The vast majority is generated by the core regulated utility business, Avista Utilities, serving the Pacific Northwest.

Breakdown of Primary Revenue Streams

Your revenue exposure is primarily concentrated in the regulated utility space, which provides stability but also introduces regulatory risk. Avista Corporation's revenue is fundamentally tied to the price and volume of energy it sells across its service territories in Washington, Idaho, and Oregon, plus a smaller regulated market in Alaska.

• Avista Utilities: Provides electric distribution and transmission, plus natural gas distribution services across eastern Washington, northern Idaho, and parts of Oregon. This is the engine of the company.
• AEL&P: The Alaska Electric Light and Power Company subsidiary, which provides electric service to customers in Juneau, Alaska.

For the first nine months of 2025, Avista Corporation reported total operating revenues of $1.431 Billion, up from $1.405 Billion in the same period of 2024. This 9-month increase of $26 million shows the core utility business is defintely pushing the top line.

Impact of Regulatory Changes on Revenue

The most significant near-term factor impacting revenue is the successful outcome of general rate cases (GRCs) in 2025. These regulatory decisions are what allow a utility to increase the rates it charges customers to recover costs and earn a regulated return on equity (ROE).

The constructive regulatory outcomes secured in Washington, Avista's largest market, are already translating into higher authorized revenue. Here's the quick math on the approved base revenue increases for the first year:

These rate increases, effective in 2025, are crucial for supporting the company's planned capital expenditures of about $525 million at Avista Utilities for the year. The focus on capital spending is key to the long-term regulated revenue base.

Near-Term Revenue Trends and Risks

While the core utility business is strong, you need to be a realist about the whole picture. The company's Q3 2025 revenue of $403.00 Million actually fell slightly short of analyst estimates, despite the company beating earnings-per-share expectations. This mixed result tells you that while the regulated pricing (utility margin) is working well due to the GRCs, the gross revenue side can still be volatile.

The electric utility margin-a non-GAAP measure that shows the profit from energy sales after the cost of power/gas-saw a substantial year-to-date increase of $86 million in the first nine months of 2025. This is the real driver of profitability, fueled by rate increases and non-decoupled load growth (more customer usage). However, the smaller 'Other non-reportable segment' recorded a year-to-date loss of $13 million, primarily from net investment losses, which drags down the consolidated results. This is a small but important caveat to the strength of the utility operations.

To understand the long-term strategy behind this regulated revenue base, you should review the company's core principles: Mission Statement, Vision, & Core Values of Avista Corporation (AVA).

Profitability Metrics

You need to know where Avista Corporation (AVA) makes its money and, just as importantly, where it loses it. The quick takeaway is that while the core utility business is performing strongly, a drag from non-core investments is pulling down the overall consolidated profitability, making their margins look weak compared to the broader utility sector.

For the trailing twelve months (TTM) ending in Q3 2025, Avista Corporation reported revenue of $1.95 billion. Here's the quick math on how that translates to profit, showing where the operational efficiency is working and where it's not.

The company's gross margin-what's left after the cost of goods sold (COGS), mainly energy costs-stands at 61.8% for the TTM. This is a solid figure, but the trend is concerning: the gross margin has been declining at an average rate of 3.6% per year. That means the cost to generate power is growing faster than the regulated prices they can charge. Still, that $1.2051 billion in TTM gross profit is the foundation of the business.

The operating margin (Earnings Before Interest and Taxes, or EBIT margin) is the next filter, showing how well management controls its day-to-day costs. Avista Corporation's TTM operating margin is 17.02%, translating to approximately $331.89 million in operating profit. This ratio is also on a downward trend over the past five years, but the core Avista Utilities segment is actually showing strong operational execution.

For a deeper dive into the segments that make up these numbers, check out Exploring Avista Corporation (AVA) Investor Profile: Who's Buying and Why?

Net Profit: The Industry Gap

The real story is in the net profit margin, which is the bottom line after all expenses, including interest and taxes. Avista Corporation's TTM net margin is 9.14%. This is where the non-core segment losses hit hard.

To be fair, the core utility business, Avista Utilities, is expected to perform toward the upper end of its $2.43 to $2.61 per diluted share guidance for 2025. This strong performance reflects disciplined cost management and constructive regulatory outcomes in their service territories. But, the consolidated 2025 earnings guidance is expected to hit the lower end of the $2.52 to $2.72 range because of a $0.16 per diluted share loss from other businesses (primarily clean technology investments) recorded year-to-date. That investment portfolio is a defintely a drag.

When you compare this to the broader sector, the gap is clear:

The industry average net profit margin for the S&P 500 Utilities sector in Q3 2025 was a robust 17.2%. Avista Corporation's 9.14% net margin is nearly half of that, which tells you that while the regulated utility operations are efficient, the company's non-core investments are creating a significant headwind to overall consolidated profitability.

Operational Efficiency and Cost Management

The good news is that management is executing well where it matters most-the regulated utility segment. The Avista Utilities year-to-date results for 2025 show a nearly 15% increase over the same period in 2024. This isn't luck.

• Drive results through disciplined cost management.
• Benefit from constructive regulatory outcomes, like approved rate plans.
• See customer load growth, which boosts core revenue.

This core strength is what prevents the declining margins from becoming a crisis. The utility is doing its job; the non-utility ventures are the risk factor you need to watch. Your next step should be to model how a full divestiture of the non-reportable segment would impact the consolidated net margin and EPS guidance.

Debt vs. Equity Structure

You're looking at Avista Corporation (AVA) and wondering how much of its growth is fueled by borrowing versus shareholder capital. Honestly, like most regulated utilities, Avista Corporation (AVA) relies heavily on debt to fund its massive capital expenditures, but its debt-to-equity ratio remains within a manageable, albeit leveraged, range for the sector.

As of the third quarter of 2025, Avista Corporation (AVA)'s total interest-bearing debt stood at approximately $3.125 billion. This high debt load is simply the cost of doing business in a capital-intensive industry where you must constantly upgrade and expand infrastructure, like the projected $525 million in capital expenditures for Avista Utilities in 2025. The balance sheet shows a clear reliance on external financing to support the $8.162 billion in total assets.

Leverage and Industry Benchmarks

The core metric here is the debt-to-equity (D/E) ratio, which tells you how much debt the company uses to finance its assets relative to the value of shareholders' equity. For Avista Corporation (AVA), the D/E ratio is around 1.18 as of late 2025. This means for every dollar of shareholder equity ($2.645 billion in Q3 2025), the company has about $1.18 in debt.

For a utility, that is defintely a high level of leverage, but it's not a red flag by itself. Utilities are capital-intensive and generate stable, regulated cash flows, so they can sustain higher debt loads than, say, a tech company. The industry generally operates with elevated D/E ratios, often ranging well above 1.0. Still, a D/E of 1.18 puts Avista Corporation (AVA) in a more leveraged position compared to some peers, highlighting the importance of its regulatory environment for debt service. If you want to dive deeper into who's holding that equity, check out Exploring Avista Corporation (AVA) Investor Profile: Who's Buying and Why?

• Total Debt (Q3 2025): $3.125 billion
• Long-Term Debt (Q3 2025): $2.6753 billion
• Debt-to-Equity Ratio: 1.18

Recent Financing Strategy: Debt and Equity Balance

Avista Corporation (AVA)'s management is actively balancing debt financing with equity funding to maintain credit quality and fund its capital plan. In July 2025, the company issued $120 million of long-term debt, plus a $20 million term loan for its subsidiary, AEL&P, primarily to repay outstanding borrowings and fund capital expenditures. The company has stated it does not expect further long-term debt issuances in 2025.

To offset the leverage and support its credit profile, Avista Corporation (AVA) is also issuing new equity. The plan is to issue up to $80 million of common stock in 2025, with $45 million already issued in the first three quarters. This demonstrates a commitment to a balanced capital structure, which S&P Global Ratings acknowledged in March 2025 by affirming the company's credit ratings-including the 'BBB' issuer credit rating and 'A-' on senior secured debt-and revising the outlook from negative to stable.

Liquidity and Solvency

Avista Corporation (AVA)'s liquidity profile, while typical for a regulated utility, signals a tight short-term cash position, with near-zero working capital and a reliance on financing to cover significant capital expenditures. You're looking at a company that is managing its cash flow precisely, but with little cushion for unexpected operational shocks.

The core of the short-term health lies in the current and quick ratios (liquidity positions). For the most recent trailing twelve months (TTM) ended September 2025, Avista Corporation's Breaking Down Avista Corporation (AVA) Financial Health: Key Insights for Investors shows a Current Ratio of 1.00. This means current assets are just enough to cover current liabilities, translating to essentially zero net working capital.

The Quick Ratio (Acid-Test Ratio) is even more telling, sitting at 0.68. This ratio excludes inventory, which is often less liquid, and a reading below 1.0 is common for capital-intensive utilities but highlights a vulnerability. It means for every dollar of immediate, non-inventory-dependent short-term debt, Avista Corporation only has $0.68 in highly liquid assets to cover it. That's a tight spot.

Here's the quick math on the working capital trends: the TTM change in working capital was a modest $35 million, which is a small positive trend but doesn't change the overall picture of limited liquidity. For a utility, this is defintely a trade-off: they minimize unproductive cash on the balance sheet, but it also means they must be consistently in the market for financing.

The cash flow statement overview for TTM September 2025 provides the clearest action map for investors:

• Operating Cash Flow (OCF): The company generated $484 million in cash from its core utility operations. This is the lifeblood, and it remains strong.
• Investing Cash Flow (ICF): This was a significant outflow of -$502 million. This is driven by the planned capital expenditures (CapEx) for 2025, which are expected to be around $525 million for infrastructure upgrades and clean energy projects. The utility business demands constant, heavy CapEx.
• Financing Cash Flow (CFF): The gap between OCF and ICF (the free cash flow deficit) is being filled by financing. The company plans to issue $120 million in long-term debt and up to $80 million in common stock during 2025. Plus, they paid out approximately $150 million in common stock dividends (TTM). This financing activity is crucial for covering the CapEx and maintaining the dividend.

The table below summarizes the near-term liquidity position and financing needs:

The potential liquidity concern isn't a failure to meet obligations, but rather the constant need for external financing to fund growth and CapEx. The high debt load, indicated by a debt-to-equity ratio of 1.06, means the company's financial flexibility is constrained. The strength, however, is the highly stable, regulated nature of its operating cash flow, which makes securing that debt and equity relatively predictable. The risk is regulatory pushback or higher-than-expected interest rates increasing the cost of that necessary financing.

Valuation Analysis

You're looking for a clear signal on Avista Corporation (AVA)-is this regulated utility a good value, or has the market gotten ahead of itself? Based on the latest 2025 fiscal year data, the stock appears to be fairly valued, leaning slightly toward undervalued when compared to its historical averages and industry peers.

The core of this assessment lies in a few key valuation multiples, which help us cut through the noise. For a utility, a stable, slightly discounted valuation is often a good sign, reflecting predictable earnings and a steady dividend. Anything too cheap suggests a major regulatory or operational risk, and anything too expensive means the growth story is already priced in.

Here's the quick math on Avista Corporation's valuation metrics as of November 2025:

• Price-to-Earnings (P/E) Ratio: The trailing twelve-month P/E ratio sits at approximately 17.4x. This is slightly below the estimated fair value P/E of 17.0x and also trades at a discount to the broader US utility peer group, which is often near 19.6x. The forward P/E, based on 2025 earnings guidance, is even lower at about 14.8x.
• Price-to-Book (P/B) Ratio: The P/B is currently around 1.26x. This is a good number for a utility, meaning you are paying only a moderate premium over the company's net asset value (book value).
• Enterprise Value-to-EBITDA (EV/EBITDA): This metric, which accounts for debt, is approximately 10.3x. This is a healthy figure, suggesting the company's debt load is manageable relative to its operating cash flow, especially when compared to its five-year average.

The valuation multiples suggest the stock is trading in a reasonable range. It's not a screaming bargain, but it's defintely not overpriced either, which is typical for a stable utility business.

Recent Stock Performance and Dividend Health

The market has recognized Avista Corporation's stability and its reaffirmed 2025 consolidated earnings guidance of $2.52 to $2.72 per share. The stock has performed well, showing a price increase of 10.41% over the last 12 months leading up to November 2025. The stock's 52-week trading range of $34.80 to $43.09 shows the current price of around $41.11 is near the high end of its recent history.

For income investors, the dividend profile is strong. Avista Corporation offers a compelling dividend yield of approximately 4.77% to 4.8%. The annual dividend is $1.96 per share. The payout ratio is high, as expected for a utility, sitting at about 83.4%. This means the majority of earnings are returned to shareholders, a key feature of regulated utilities. What this estimate hides, however, is the reliance on continued regulatory support for that payout to remain sustainable.

Analyst Consensus and Next Steps

The professional analyst community has a clear, unified view on Avista Corporation: the consensus rating is a firm Hold. This isn't a 'Strong Buy,' but it reflects the stock's current fair valuation and limited immediate upside. The average analyst price target is set at approximately $40.33 to $40.60, which is essentially flat against the current trading price. This suggests that while the stock is a solid long-term defensive play, significant capital appreciation in the near-term is unlikely.

For a deeper dive into the company's long-term strategy, you should review their foundational documents. Mission Statement, Vision, & Core Values of Avista Corporation (AVA).

Your action now is simple: if you own it, hold it for the income; if you are looking to buy, wait for a dip closer to the 52-week low of $34.80.

Risk Factors

You're looking at Avista Corporation (AVA) because utilities offer stability, but even a regulated business faces serious headwinds. The core takeaway is this: Avista's regulated utility segment is performing well, but high financial leverage and persistent regulatory and climate risks are creating a drag on the consolidated results for 2025. You need to map these risks to the company's capital structure.

Financial and Strategic Headwinds

The most immediate and concerning risks are financial and strategic, especially outside the core utility business. Avista's financial strength is rated poorly, and its debt profile is something we need to watch closely. The debt-to-equity ratio sits at a high 1.2, showing a significant level of leverage on the balance sheet. Honestly, a high debt load in a rising interest rate environment is a constant cost pressure.

More specifically, the non-reportable business segment-largely clean technology investments-has been a clear drag on earnings. The company anticipates hitting the lower end of its 2025 consolidated earnings per share (EPS) guidance of $2.52 to $2.72 due to a $0.16 per diluted share loss from these other ventures recorded in the first three quarters of 2025. That's a material hit to the bottom line that you can't ignore.

• High leverage: Debt-to-Equity ratio of 1.2.
• Liquidity concern: Altman Z-Score of 0.88, placing it in the distress zone.
• Investment drag: $0.16/share loss from non-utility ventures in 2025.

The Regulatory and Operational Tightrope

For any regulated utility, the biggest external risk is regulatory uncertainty. State and federal regulatory decisions can directly impact Avista's ability to recover costs and earn a reasonable return on its investments. For example, the Energy Recovery Mechanism (ERM) is expected to have a $0.14 negative impact on Avista Utilities' 2025 EPS. While the company has secured constructive multi-year rate increases in Washington, which is a good sign, any delay or disallowance on their planned $525 million in 2025 capital expenditures could hurt future earnings.

Operational risks are also escalating, especially those tied to climate. Wildfires are a growing concern, with Avista Corporation (AVA) facing multiple lawsuits alleging fires were started by their equipment. This creates unbudgeted legal and remediation liabilities. Plus, the push to meet ambitious clean energy goals-like the path to carbon-neutral electricity by 2030 outlined in their 2025 Clean Energy Implementation Plan-requires massive capital investment, which must be approved by regulators to be recovered. You can read more about their decarbonization goals here: Mission Statement, Vision, & Core Values of Avista Corporation (AVA).

The bottom line is that while the core utility business is showing strong execution-with Avista Utilities expected to contribute toward the upper end of a $2.43 to $2.61 EPS range in 2025-the total picture is being pulled down by losses in other areas and the constant threat of regulatory pushback and climate-related operational costs. Your next step should be to check the latest 10-Q filing to see if the full-year $0.16 loss from other ventures is confirmed.

Growth Opportunities

You're looking for a clear path forward for Avista Corporation (AVA), and the story is one of stable, regulated growth driven by essential infrastructure spending. The direct takeaway is this: Avista's core utility business is strong, projecting earnings at the high end of its internal range, but the overall consolidated earnings will be dragged down by non-regulated ventures. Your focus should be on the utility's capital plan.

The company's primary growth driver isn't a flashy new product; it's the necessary, consistent investment in its regulated utility assets. Avista Utilities plans capital expenditures of about $525 million in 2025 alone, part of a massive nearly $3 billion spend over the five-year period ending in 2029. This investment is defintely the engine for future earnings, expected to generate a 5% to 6% annual rate base growth, which is the foundational way a utility grows its profits.

Future Revenue and Earnings Estimates

For the 2025 fiscal year, Avista Corporation has confirmed its consolidated earnings guidance in the range of $2.52 to $2.72 per diluted share. However, the company has signaled it expects to land at the lower end of this range. Here's the quick math: the Avista Utilities segment is expected to perform strongly, contributing toward the upper end of its own range of $2.43 to $2.61 per diluted share. But, losses from non-regulated business ventures-like clean technology investment devaluations-have already totaled about $0.16 per diluted share through the third quarter of 2025, pulling the consolidated number down. Trailing twelve-month revenue as of the third quarter of 2025 stood at $1.96 billion, showing a modest year-over-year growth of 2.14%. Long-term, you should expect earnings growth in the 4-6 percent range from this 2025 base year.

The company's strategic initiatives are tightly focused on leveraging its regulated market position:

• Attracting Large Load Customers: Actively advancing discussions with new industrial customers, which helps with grid enhancements and increased sales tax revenue.
• Electrification Trends: Anticipating faster peak load growth (up to 1.7% annually in the latter half of the next 20 years) due to the electrification of buildings and transportation in its service territory.
• Regulatory Execution: Continuing to secure constructive rate case outcomes in Oregon and Idaho in 2025, mirroring the positive results achieved in Washington.

Competitive Edge and Near-Term Risks

Avista's most significant competitive advantage is the nature of its business: it's a regulated utility, which essentially grants it a government-backed monopoly in its service areas. This provides stable, predictable returns, which is why institutional ownership has surged in 2025, hitting 85.24%. Still, this stability comes with limits. The regulatory environment that grants the monopoly also caps the growth. Plus, the company faces ongoing exposure to Pacific Northwest regulatory and wildfire uncertainties, which is a constant risk you must weigh. For a deeper dive into who is betting on this stability, check out Exploring Avista Corporation (AVA) Investor Profile: Who's Buying and Why?

The next step for you is clear: Finance needs to model the impact of the non-regulated losses on the dividend payout ratio, which is estimated at 75% for 2025, to ensure the 22-year dividend growth streak remains secure.