Breaking Down Eversource Energy (ES) Financial Health: Key Insights for Investors

You're looking at Eversource Energy (ES) right now, a classic New England utility, and you need to know if the stable dividend story still holds up against a wall of capital spending and regulatory friction. The headline is that management is guiding for a recurring 2025 earnings per share (EPS) of $4.72 to $4.80, which is solid, but the real story is the massive infrastructure bet: a $24.2 billion capital investment plan through 2029, with nearly $5 billion slated for this year alone, all to drive an expected 8% compound annual growth rate in their rate base to $41.9 billion by 2029. That's a huge growth engine. But here's the rub: those big numbers ride on regulatory goodwill, and the recent rejection of the Aquarion water business sale, which was meant to bring in $1.6 billion in cash to shore up the balance sheet, just sent the stock down, showing you the near-term volatility that comes with being a regulated utility. We need to look past the confident EPS guidance and see if the cash flow enhancement strategy-selling assets and getting rate increases-can actually fund this grid modernization without forcing them into more debt or dilutive equity issuances.

Revenue Analysis

You want to know where Eversource Energy (ES) actually makes its money, and the short answer is: almost entirely from regulated infrastructure investments. For the twelve months ending September 30, 2025, Eversource Energy's total revenue (trailing twelve months, or TTM) hit approximately $13.15 Billion. That's a significant jump, showing a roughly 13.12% year-over-year revenue growth, a strong rebound from the near-flat revenue of the prior year.

This growth isn't coming from some flashy new product; it's the steady, predictable return on their regulated rate base (the asset value they can earn a return on). Their primary revenue streams are simple: they are a 'pure play pipes and wires regulated utility' in New England, serving 4.6 million customers across three states.

The revenue is generated almost exclusively through four core business segments, with the Electric Transmission segment often being the largest driver of earnings due to its favorable Federal Energy Regulatory Commission (FERC) cost-recovery mechanism. Here's the quick math on how the core segments contributed to earnings (the best proxy for revenue contribution in this regulated model) for the first nine months of 2025:

The key takeaway is that revenue growth is directly tied to capital expenditures ($24.2 billion planned through 2029) and successful rate case outcomes with state regulators.

Significant Revenue Stream Changes: The Pure-Play Focus

The biggest change in Eversource Energy's revenue profile is the strategic pivot back to being a fully regulated utility. They have completely exited the offshore wind business and have been working to sell their water utility, Aquarion. This move eliminates the revenue and risk volatility associated with non-regulated ventures, but it also removes a potential source of outsized growth.

• Exited offshore wind: Reduces non-regulated exposure.
• Attempted Aquarion sale: Connecticut regulators recently rejected the proposed $2.4 Billion sale, meaning this segment and its revenue will remain on the books for now.
• Distribution rate increases: Higher revenues are being driven by base distribution rate increases in key states like Massachusetts and New Hampshire, which is the core mechanism for revenue growth in this sector.

What this estimate hides is the regulatory risk. The rejection of the Aquarion sale, just like the ongoing discussions around storm cost recovery, shows that regulators can and will impact the company's ability to execute its plan, which in turn affects your investment thesis. You can read more about their strategic direction on their Mission Statement, Vision, & Core Values of Eversource Energy (ES).

Profitability Metrics

You need to know if Eversource Energy (ES) is turning its revenue into real profit, and the short answer is yes, but with a clear path for future expansion. The company's recent Trailing Twelve Months (TTM) profitability figures, as of late 2025, show a regulated utility with strong operational control, even as it navigates a massive capital investment plan. This is a business built on predictable, regulated returns, not high-flying growth, but the margins are solid.

For the TTM period ending in the third quarter of 2025, Eversource Energy's core profitability ratios were strong. The Gross Profit Margin stood at approximately 38.72%, reflecting the cost of energy and operations relative to revenue. This is a critical metric for a utility, showing good control over the direct costs of service. Moving down the income statement, the Operating Margin was approximately 22.2%, which indicates that nearly a quarter of every revenue dollar is left after covering all operating expenses, including maintenance and depreciation.

The bottom line, the Net Profit Margin, was approximately 10.2% for the TTM period. This figure is significant because it's reported to excel beyond industry benchmarks for the Utilities sector, suggesting superior cost management and favorable regulatory outcomes. Honestly, in a regulated business, a 10.2% net margin that beats the sector average is a defintely sign of a well-run operation.

Here is the quick math on the key TTM profitability ratios:

• Gross Profit Margin: 38.72%
• Operating Profit Margin: 22.2%
• Net Profit Margin: 10.2%

Looking at the trends, Eversource Energy has managed to return to profitability after a period of volatility, which included a non-recurring loss of $764.7 million related to offshore wind investments in prior periods. Analysts are forecasting a significant margin expansion, expecting the Net Profit Margin to rise from its current level to a projected 14.1% within the next three years. This anticipated climb hinges on sustained investment in grid modernization and favorable rate case outcomes, which enhance cost recovery.

When you compare Eversource Energy's performance to the US Utilities - Regulated Electric industry average, a mixed picture emerges, which is typical for a company in a heavy investment phase. For example, the forecast annual revenue growth rate of 2.61% is slower than the industry's average forecast of 8.04%. But, the company's forecast annual earnings growth rate of 14.68% is actually much higher than the industry's average forecast of 4.68%. This tells you they are converting revenue to profit more efficiently than their peers, even with slower top-line growth.

Operational efficiency is being driven by a strategic shift. The company's $24.2 billion capital investment plan through 2029 is central to this, focusing on electric distribution (43%) and transmission (28%). This massive spending on infrastructure like battery storage and substation upgrades is forecast to drive operational efficiency and cost reductions, directly lifting net margins over time. The table below summarizes the key comparison points:

What this estimate hides is the risk associated with high debt levels and regulatory challenges, such as the recent rejection of the Aquarion water business sale, which was intended to streamline operations and reduce debt. Still, the long-term focus on regulated, stable earnings from 'pipes-and-wires' operations, coupled with supportive regulations and rate increases, provides a strong foundation for future profit stability. For a deeper look into the company's long-term strategy, you can review their Mission Statement, Vision, & Core Values of Eversource Energy (ES).

Your next concrete step should be to monitor the outcome of the pending $980 million storm cost recovery and any new rate filing prospects, as these regulatory decisions will directly impact the realization of the projected 14.1% net margin.

Debt vs. Equity Structure

You need to know how Eversource Energy (ES) is funding its massive infrastructure push, and the quick answer is: mostly through debt, but they are actively balancing that with strategic equity moves. For a capital-intensive utility, a high debt load isn't unusual, but the sheer scale of their borrowing means you need to watch their credit metrics closely.

As of the second quarter of 2025, Eversource Energy's total debt stood at nearly $29.78 billion. This is the engine of their growth, covering everything from grid modernization to meeting the surge in electricity demand driven by electrification.

• Long-Term Debt & Capital Lease Obligation: $26.515 billion
• Short-Term Debt & Capital Lease Obligation: $3.264 billion
• Total Stockholders Equity: $15.666 billion

Here's the quick math: their Debt-to-Equity (D/E) ratio for Q2 2025 was 1.90. This means for every dollar of shareholder equity, the company has borrowed $1.90. To be fair, utilities are different; they are heavily regulated and require huge upfront capital for infrastructure, so they naturally carry more debt than, say, a tech company. Still, a D/E of 1.90 is high, pushing toward the upper end of what investors view favorably, which is why credit ratings are so critical.

The credit rating agencies have certainly taken notice. S&P Global lowered Eversource's long-term issuer credit rating to 'BBB+' from 'A-' in late 2024, and Fitch maintains a 'BBB' rating with a negative outlook as of October 2025. The ratings drop reflects concerns about their financial measures, like Funds From Operations (FFO) to debt, which S&P expects to remain in the 13%-14% range. A lower rating means higher borrowing costs for future debt, which ultimately hits your bottom line as an investor.

The company is defintely working to balance this high leverage. Their strategy involves a mix of debt and equity funding, plus strategic asset sales to pay down debt. The proceeds from the pending sale of the Aquarion water business, for example, are specifically earmarked to support credit quality and reduce interest expenses. They are also leveraging equity funding, having completed an At-The-Market (ATM) equity issuance in 2024 that brought in approximately $990 million in net proceeds. This capital rotation is key to maintaining an investment-grade rating while funding their multi-billion-dollar capital plan.

For a deeper dive into their overall financial picture, including the impact of their asset sales on future cash flow, you should read our full analysis on Breaking Down Eversource Energy (ES) Financial Health: Key Insights for Investors.

Liquidity and Solvency

You want to know if Eversource Energy (ES) has enough quick cash to cover its short-term bills. That's what liquidity tells us, and for a capital-intensive utility, the picture is complex but clear: liquidity is tight, which is typical, but their cash flow is improving.

As of late 2025, Eversource Energy's liquidity ratios-the Current Ratio and Quick Ratio-are low. The Current Ratio, which compares current assets to current liabilities, stands at just 0.71, and the Quick Ratio (excluding inventory) is even lower at 0.64. A ratio below 1.0 means the company's immediate liquid assets cannot defintely cover all its obligations due within a year. Utilities are cash-hungry, and Eversource Energy is no exception.

This low ratio implies a negative working capital position (Current Assets minus Current Liabilities), but for a regulated utility with steady, predictable revenue, this isn't an immediate crisis. They manage their working capital aggressively, relying on continuous access to capital markets rather than a large cash buffer. The risk here isn't insolvency; it's reliance on external financing, which can be expensive when interest rates are high.

The Cash Flow Statement for 2025 shows the real story. Operating Cash Flow (OCF) is the lifeblood, and it's been improving. Net cash from continuing operating activities rose to approximately $1.0996$ billion in the third quarter of 2025 alone, reflecting an overall improvement of over $1.7$ billion year-over-year through Q3 2025. This positive OCF is crucial for funding their massive infrastructure plans.

Here's the quick math on their cash flow activities:

• Operating Cash Flow (OCF): Strong and growing, driven by rate increases and operational efficiency.
• Investing Cash Flow (ICF): Highly negative, with net cash from investing activities at about -$1.1896$ billion in Q3 2025. This outflow is intentional, supporting the planned $5$ billion investment for 2025.
• Financing Cash Flow (FCF): Positive, as they issued $600$ million in parent company debt and $465$ million in equity via an At-The-Market (ATM) program in Q3 2025 to proactively strengthen liquidity and prefund a 2026 maturity.

What this estimate hides is the constant need to tap the debt and equity markets to bridge the gap between OCF and their enormous capital expenditure (CapEx). This is a classic utility model: invest heavily, recover costs through regulated rates, and finance the difference. The recent denial of the Aquarion Water sale, for instance, was a regulatory setback that directly impacted their planned liquidity enhancements.

Management is focused on maintaining a strong Funds From Operations (FFO) to debt ratio, expecting it to be approximately 100 basis points above the rating agency thresholds by the end of 2025. This is the key metric for a utility's solvency, demonstrating their ability to service debt from core operations. For a deeper look at who is funding these operations, consider Exploring Eversource Energy (ES) Investor Profile: Who's Buying and Why?

Your action item is to track the FFO-to-debt ratio and the success of their capital recovery mechanisms in upcoming rate cases. That's where the rubber meets the road.

Valuation Analysis

You're looking at Eversource Energy (ES) and asking the crucial question: Is this utility stock priced fairly, or are we paying a premium for stability? The short answer is that the market currently views ES as fairly valued, leaning toward a slight overvaluation when you consider the analyst consensus. The stock has been a strong performer this year, still, the core valuation metrics suggest caution.

Over the last 12 months, Eversource Energy's stock has climbed about 19.23%, outpacing the S&P 500's rally. That's a great run, but it pushes the valuation multiples. The stock traded in a wide 52-week range, from a low of $52.28 in April 2025 to a high of $75.25 in October 2025. Right now, near the $73.30 mark, it sits near the top of that range.

Here's the quick math on the key valuation ratios for the trailing twelve months (TTM) ending November 2025:

• Price-to-Earnings (P/E): 20.31x. This is a bit rich for a regulated utility.
• Price-to-Book (P/B): 1.72x. This indicates a premium over the book value of assets.
• Enterprise Value-to-EBITDA (EV/EBITDA): 12.58x. This is the best metric for comparing capital-intensive utilities and is on the higher end of the sector average.

What this estimate hides is the forward outlook. The forward P/E, based on the 2025 consensus earnings per share (EPS) of $4.76, drops to a more reasonable 14.66x. That's a defintely better look, but it relies on those earnings projections holding up.

Dividend Strength and Analyst Sentiment

For income-focused investors, the dividend picture is solid, but the payout ratio is high. Eversource Energy pays an annual dividend of approximately $3.01 per share, giving you a current dividend yield of about 4.61%. That's competitive, but you need to watch the payout ratio-the percentage of earnings paid out as dividends-which sits at nearly 79.84%. That high ratio means less room for error in earnings or for reinvestment in the business without taking on more debt.

The Street is cautious. The analyst consensus is a firm 'Hold,' which is Wall Street-speak for 'Don't rush in, but don't sell either.' Out of the analysts covering the stock, the average 12-month price target is around $70.24, which is actually slightly below the current stock price of $73.30. This implies a modest downside or, at best, a flat return over the next year, with returns coming primarily from the dividend.

To be fair, the price targets range widely, from a low of $58 to a high of $85. Still, the average tells you the market believes the near-term upside is limited after the strong run. You can dive deeper into the operational details in our full report: Breaking Down Eversource Energy (ES) Financial Health: Key Insights for Investors.

Risk Factors

You're looking at Eversource Energy (ES) because it's a regulated utility, which usually means predictable returns. But honestly, the near-term risk profile for ES is more complex than a typical utility, primarily due to persistent regulatory headwinds and a balance sheet that needs deleveraging. You need to focus on two things: Connecticut's Public Utilities Regulatory Authority (PURA) and the company's debt metrics.

The biggest external risk right now is regulatory uncertainty, which directly impacts Eversource Energy's ability to recover costs and execute its strategy. We saw this play out in November 2025 when Connecticut regulators rejected the planned sale of the Aquarion water business, a transaction valued at approximately $2.4 billion. That decision was a clear setback to the company's plan to pay down parent company debt and streamline operations, causing the stock to drop nearly 15% over two days. It's a reminder that in a regulated business, the regulator is your most important partner, or your biggest risk.

Internally, the financial structure is under scrutiny. The company's debt-to-equity ratio is high, sitting at about 1.86, which is a significant reliance on borrowed funds. Plus, the current ratio of 0.71 suggests some immediate liquidity constraints. The plan to sell Aquarion was a core component of the strategy to improve the Funds From Operations (FFO) to debt ratio from 11.5% in Q1 2025 toward a year-end target of 14%. Now, that path is much tougher.

Here's the quick math on the key financial and operational risks:

Operational risks are also real, especially around climate change. As a Northeast utility, Eversource Energy is exposed to increasingly severe weather events, which require massive capital investment in grid resilience. To be fair, they are mitigating this with a 5-year capital plan of approximately $24.2 billion through 2029, focusing on infrastructure like the Advanced Metering Infrastructure (AMI) rollout, which is about 70% complete in Massachusetts.

Still, you need to watch the execution on these fronts. The company did affirm a narrowed 2025 non-GAAP EPS guidance of $4.72 to $4.80, which is a positive sign of core business stability, but the parent company still took a net after-tax nonrecurring charge of $75 million in Q3 2025 related to its offshore wind exit, even with a $210 million tax benefit. That's a lot of noise.

The mitigation strategies are clear, but execution is the key:

• Focus on core regulated utility segments (electric transmission and distribution).
• Accelerate $24.2 billion in grid modernization and resilience investments.
• Pursue constructive rate case outcomes to ensure cost recovery.
• Explore alternative balance sheet strengthening measures following the Aquarion defintely setback.

For a deeper dive into who is betting on this turnaround, you might want to read Exploring Eversource Energy (ES) Investor Profile: Who's Buying and Why?

Growth Opportunities

You're looking for a clear path to growth in a utility sector often seen as slow-moving, and Eversource Energy (ES) is defintely mapping one out. The core takeaway is this: Eversource is doubling down on its regulated utility business in New England, funding its future growth almost entirely through massive, state-approved infrastructure spending.

Their strategy is simple but powerful: invest billions in the grid, get a guaranteed return on that investment (rate base), and watch earnings follow. This is the playbook for a regulated utility, and Eversource is executing it with a long-term capital plan of $24.2 billion through 2029. That kind of systematic expenditure is the real engine for organic growth here.

Capital Investment and Rate Base Expansion

The company's growth is anchored in its five-year capital plan, which is a 10% increase over their previous forecast. This investment is projected to grow the rate base-the asset value on which the company is allowed to earn a regulated return-at an 8% compound annual growth rate (CAGR). Here's the quick math on where that money is going, based on the 2025-2029 plan:

• Electric and Gas Distribution Networks: Nearly $16.2 billion.
• Electric Transmission Segment: Approximately $6.8 billion.
• Grid Modernization: Includes Advanced Metering Infrastructure (AMI) and battery storage systems.

This is a pure-play pipes and wires focus. To be fair, they recently sold the Aquarion Water Company for about $1.7 billion to keep their focus tight on their core electric and natural gas delivery business.

Future Revenue and Earnings Trajectory

The capital plan translates directly into predictable financial projections, which is what you want from a utility. For the 2025 fiscal year, the company has narrowed its adjusted profit forecast (Earnings Per Share, or EPS) to a range of $4.72 to $4.80 per share. Analysts project the total 2025 revenue to be around $13.148 billion.

The longer-term outlook is even clearer. Eversource Energy is guiding for a long-term EPS growth rate of 5% to 7% through 2029. This is a very solid, durable growth rate for a regulated utility, driven by the expanding rate base from $26.4 billion in 2023 to a projected $41.9 billion by 2029.

Strategic Edge and Clean Energy Initiatives

Eversource's competitive advantage is its position as the largest regulated utility in New England, serving 4.6 million customers. This scale, combined with its 60K distribution miles and 4.5K transmission miles, creates a significant barrier to entry. Plus, the company is aligning its investments with the region's aggressive clean energy goals, which is a key growth driver.

This commitment includes major projects like the completion of the onshore substation for the Revolution Wind Project, even as they strategically exit the offshore wind development business to de-risk and focus on their regulated assets. They are also actively investing in energy efficiency programs, like the 2025 Breaking Down Eversource Energy (ES) Financial Health: Key Insights for Investors Main Streets initiative in Massachusetts, which helps small businesses with upgrades. This focus on efficiency and infrastructure modernization is how they get rate approval and secure future growth. It's a classic utility growth loop.