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

Are you keeping a close watch on your investments in the utility sector? Have you considered how Eversource Energy's (ES) financial performance might impact your portfolio? In 2024, the company reported full-year earnings of $811.7 million, or $2.27 per share, a notable turnaround from the $(442.2) million loss in 2023. With a revenue of $11.901 billion and total assets reaching $59.595 billion, is this a sign of stability, or are there deeper trends to consider, especially with a debt of $29.18 billion and a debt/equity ratio of 1.71? Let's dive into the key financial insights that can help you make informed decisions.

Eversource Energy (ES) Revenue Analysis

Understanding where Eversource Energy (ES) generates its revenue and how those streams have changed over time is crucial for investors. This analysis breaks down the company's primary revenue sources, examines historical growth rates, and assesses the contribution of different business segments to the overall revenue picture.

Eversource Energy's revenue is derived from several key sources:

• Electric Distribution: Revenue from delivering electricity to residential, commercial, and industrial customers within its service territories.
• Electric Transmission: Revenue earned from transmitting electricity across its high-voltage transmission lines.
• Natural Gas Distribution: Revenue from distributing natural gas to customers.
• Water Distribution: Revenue from distributing water to customers.

Analyzing Eversource Energy's year-over-year revenue growth rate provides insights into its performance and market position. While specific percentage increases or decreases require up-to-date financial reports, examining historical trends reveals the company's ability to adapt to changing market conditions and regulatory environments.

To illustrate, here's a sample table showcasing how different segments might contribute to Eversource Energy's overall revenue (Note: This is an example and not actual data):

Changes in revenue streams can be triggered by various factors, including regulatory changes, infrastructure investments, and shifts in customer demand. Investors should monitor these changes to assess their potential impact on Eversource Energy's financial performance.

For further insights into Eversource Energy's (ES) financial health, explore: Breaking Down Eversource Energy (ES) Financial Health: Key Insights for Investors

Eversource Energy (ES) Profitability Metrics

Understanding Eversource Energy's profitability involves examining its gross profit, operating profit, and net profit margins. These metrics provide insights into the company's efficiency in generating earnings from its revenue and managing its expenses.

Eversource Energy's financial performance can be evaluated through these key metrics:

• Gross Profit Margin: This ratio indicates the percentage of revenue remaining after subtracting the cost of goods sold (COGS). It reflects the company's efficiency in managing production costs.
• Operating Profit Margin: This margin reveals the percentage of revenue remaining after deducting both COGS and operating expenses. It illustrates the company's profitability from its core business operations before considering interest and taxes.
• Net Profit Margin: The net profit margin shows the percentage of revenue that translates into net income after all expenses, including interest and taxes, have been paid. It represents the company's overall profitability.

Analyzing trends in these profitability metrics over time can reveal whether Eversource Energy is improving its operational efficiency and increasing its profitability. Comparing these ratios with industry averages provides context and helps determine whether the company is performing well relative to its peers.

Operational efficiency is crucial for maintaining and improving profitability. Effective cost management and favorable gross margin trends are indicators of a company's ability to control expenses and maximize profits. For example, if Eversource Energy can reduce its operating costs or improve its gross margin, this would likely lead to higher profitability.

For more insights into Eversource Energy and its investors, check out: Exploring Eversource Energy (ES) Investor Profile: Who’s Buying and Why?

Eversource Energy (ES) Debt vs. Equity Structure

Understanding how Eversource Energy (ES) finances its operations and growth is crucial for investors. The balance between debt and equity reveals insights into the company's financial strategy, risk profile, and long-term sustainability. Here's a breakdown of Eversource Energy's debt levels, ratios, and financing activities.

As of the fiscal year 2024, Eversource Energy's financial structure includes a mix of both short-term and long-term debt. Monitoring these debt levels is essential to gauge the company's ability to meet its obligations and invest in future growth. Here's what to consider:

• Long-Term Debt: This represents debt obligations due beyond one year. High levels of long-term debt can indicate significant investments in infrastructure and capital projects.
• Short-Term Debt: This includes obligations due within one year, such as commercial paper and short-term loans. Managing short-term debt effectively is vital for maintaining liquidity and operational flexibility.

Analyzing Eversource Energy's debt-to-equity ratio provides a clearer picture of its financial leverage. The debt-to-equity ratio is a financial ratio that indicates the proportion of equity and debt a company uses to finance its assets. It is calculated by dividing a company’s total liabilities by its shareholders’ equity. Here’s why it matters:

• Debt-to-Equity Ratio: This ratio compares a company's total debt to its shareholders' equity. A higher ratio suggests greater financial risk, as the company relies more on debt financing. A lower ratio indicates a more conservative approach, with a greater reliance on equity.
• Industry Standards: Comparing Eversource Energy's debt-to-equity ratio to industry averages offers context. Utility companies often have higher debt levels due to the capital-intensive nature of their operations.

Recent financing activities, such as debt issuances and refinancing, can significantly impact Eversource Energy's financial health. Investors should monitor these activities to understand the company's strategic financial moves:

• Debt Issuances: New bond offerings or loans can provide capital for investments but also increase debt obligations.
• Credit Ratings: Ratings from agencies like Standard & Poor's, Moody's, and Fitch reflect the company's creditworthiness. Downgrades can increase borrowing costs, while upgrades can lower them.
• Refinancing: Replacing existing debt with new debt at lower interest rates can improve cash flow and reduce financial risk.

Eversource Energy strategically balances debt and equity to fund its operations and growth initiatives. This balance is crucial for maintaining financial stability and attracting investors. Here’s a simplified view:

• Debt Financing: Utilizes loans and bonds to raise capital, offering the advantage of not diluting equity. However, it increases financial risk due to interest payments and principal repayment obligations.
• Equity Funding: Involves issuing new shares or retaining earnings. While it doesn't create debt, it can dilute existing shareholders' ownership.

Below is an illustrative table showcasing how a hypothetical utility company manages its debt and equity, providing a benchmark for understanding Eversource Energy's approach:

For more insights into Eversource Energy's values and long-term goals, explore: Mission Statement, Vision, & Core Values of Eversource Energy (ES).

Eversource Energy (ES) Liquidity and Solvency

Eversource Energy's financial health can be understood by examining its liquidity position, working capital management, and cash flow dynamics. These elements provide insights into the company's ability to meet its short-term obligations and fund its operations.

Assessing Eversource Energy's liquidity involves analyzing key ratios and trends:

• Current Ratio: The current ratio, calculated by dividing current assets by current liabilities, is a primary indicator of liquidity. For Eversource Energy, monitoring this ratio helps to understand if the company has enough short-term assets to cover its short-term liabilities.
• Quick Ratio: The quick ratio, also known as the acid-test ratio, excludes inventories from current assets to provide a more conservative measure of liquidity. Analyzing Eversource Energy's quick ratio offers a view of its immediate liquidity, indicating its ability to meet obligations without relying on the sale of inventories.

Eversource Energy's working capital trends reflect the efficiency of its short-term asset and liability management. Analyzing these trends can reveal strengths or weaknesses in operational liquidity.

Overview of cash flow statements:

• Operating Cash Flow: A review of cash flow from operating activities indicates the cash generated from Eversource Energy's core business operations. Consistent positive operating cash flow is generally a sign of financial stability.
• Investing Cash Flow: Analyzing cash flow from investing activities shows how Eversource Energy is using cash for investments in assets. These activities might include capital expenditures or acquisitions.
• Financing Cash Flow: Cash flow from financing activities details how Eversource Energy funds its operations through debt and equity.

Eversource Energy reported the following financial data in its 2024 fiscal year:

Potential liquidity concerns or strengths for Eversource Energy may arise from:

• Large Capital Expenditures: Significant investments in infrastructure projects could strain liquidity if not managed effectively.
• Regulatory Changes: Changes in regulations can impact revenue streams and require adjustments in financial planning.
• Debt Management: Effective management of debt obligations is crucial for maintaining a healthy liquidity position.

For further insights into Eversource Energy's strategic direction, refer to the Mission Statement, Vision, & Core Values of Eversource Energy (ES).

Eversource Energy (ES) Valuation Analysis

To assess whether Eversource Energy (ES) is overvalued or undervalued, several key financial ratios and indicators are considered.

These include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, stock price trends, dividend yield and payout ratios, and analyst consensus.

Ratio Analysis:

• Price-to-Earnings (P/E):
• The trailing P/E ratio for Eversource Energy in April 2025 is approximately 25.76.
• The forward P/E ratio is around 12.02.
• The P/E ratio as of April 11, 2025, is 13.69.
• Price-to-Book (P/B):
• The current price-to-book ratio as of March 31, 2025, is 1.49.
• Enterprise Value-to-EBITDA (EV/EBITDA):
• The EV/EBITDA ratio is approximately 12.14.

Stock Price Trends:

• Eversource Energy's stock price has fluctuated between $54.25 and $68.40 over the past 52 weeks.
• As of April 17, 2025, the closing price was $57.44, reflecting a 1.07% decrease from the previous day.
• The stock is down 1.83% over the past 12 months.

Dividend Analysis:

• Dividend Yield: Eversource Energy's dividend yield is approximately 5.24%.
• Payout Ratio: The payout ratio varies, with some sources reporting around 123.39%.
• The annual dividend is $3.01 per share.
• The last ex-dividend date was March 4, 2025, with a dividend payment of $0.75 per share paid on March 31, 2025.

Analyst Consensus:

• The analyst consensus rating for Eversource Energy is 'Hold'.
• Based on ratings from 10 Wall Street analysts, the average 12-month price target is $65.89.
• The high forecast is $75.00, and the low forecast is $55.00.
• This average price target represents a potential upside of approximately 14.71% from the recent price of $57.44.

Additional Considerations:

• Revenue Growth: The company reported revenue growth of 10.30%.
• Return on Equity (ROE): The ROE is 5.55%.
• Free Cash Flow: There is a negative free cash flow of approximately -$2.37 billion.

Here is a summary table of key valuation metrics:

Based on these metrics, Eversource Energy presents a mixed valuation picture. The forward P/E ratio suggests potential undervaluation, while other factors such as negative free cash flow and a high payout ratio may warrant caution. Analyst ratings are generally neutral, with a consensus 'Hold' rating.

For more in-depth insights, you can check out: Breaking Down Eversource Energy (ES) Financial Health: Key Insights for Investors

Eversource Energy (ES) Risk Factors

Eversource Energy faces a variety of internal and external risks that could significantly impact its financial health. These risks span industry competition, regulatory changes, market conditions, and specific operational and strategic challenges.

Industry Competition: The energy sector is highly competitive. Eversource Energy competes with other utilities and energy providers, which can pressure profit margins. The company must continually adapt to evolving market dynamics to maintain its competitive edge. Mission Statement, Vision, & Core Values of Eversource Energy (ES).

Regulatory Changes: Eversource Energy operates under stringent regulatory oversight. Changes in regulations can lead to increased compliance costs or limitations on business activities. For example, environmental regulations may require significant investments in cleaner energy technologies.

Market Conditions: Fluctuations in energy prices and demand can impact Eversource Energy's revenue and profitability. Economic downturns can reduce energy consumption, while rising fuel costs can increase operating expenses.

Operational Risks: Eversource Energy's operations are subject to various risks, including:

• Infrastructure Failures: Aging infrastructure can lead to outages and service disruptions, resulting in financial losses and reputational damage.
• Cybersecurity Threats: The energy sector is a prime target for cyberattacks, which can compromise critical infrastructure and sensitive data.
• Weather-Related Events: Severe weather events, such as hurricanes and blizzards, can cause widespread damage to Eversource Energy's infrastructure, leading to significant restoration costs.

Financial Risks: Eversource Energy faces several financial risks, including:

• Interest Rate Risk: Changes in interest rates can impact Eversource Energy's borrowing costs and profitability.
• Credit Risk: The company's ability to access credit markets on favorable terms can be affected by its credit rating and market conditions.
• Commodity Price Risk: Fluctuations in commodity prices can impact the cost of fuel and purchased power, affecting Eversource Energy's profitability.

Strategic Risks: Eversource Energy's strategic decisions can also pose risks, including:

• Investment Decisions: Investments in new projects or technologies may not generate the expected returns, leading to financial losses.
• Mergers and Acquisitions: Integration challenges and unexpected liabilities can arise from mergers and acquisitions.
• Reputation Risk: Negative publicity or controversies can damage Eversource Energy's reputation and erode customer trust.

Specific risks highlighted in recent earnings reports and filings may include:

While specific details from 2024 earnings reports would provide the most up-to-date insight, it is important to consult those reports directly for the most accurate information.

Mitigation Strategies: Eversource Energy employs various mitigation strategies to manage these risks, such as:

• Infrastructure Investments: Upgrading and modernizing infrastructure to reduce the risk of failures and improve reliability.
• Cybersecurity Measures: Implementing robust cybersecurity measures to protect against cyberattacks.
• Risk Management Programs: Developing and implementing comprehensive risk management programs to identify, assess, and mitigate risks.
• Insurance Coverage: Maintaining adequate insurance coverage to protect against potential losses.

Eversource Energy (ES) Growth Opportunities

Eversource Energy (ES) faces a future shaped by strategic investments and market positioning within the evolving energy sector. Key growth drivers for Eversource include strategic initiatives focused on grid modernization and expansion of renewable energy infrastructure.

Eversource Energy is involved in numerous projects aimed at modernizing the electric grid. These projects enhance grid reliability and facilitate the integration of more renewable energy sources. These investments are crucial for meeting the increasing demand for electricity and supporting the transition to cleaner energy.

The company is actively expanding its renewable energy portfolio through investments in solar, wind, and other renewable energy projects. These projects not only contribute to environmental sustainability but also provide long-term revenue streams and growth opportunities.

Future revenue growth projections and earnings estimates for Eversource Energy are influenced by several factors, including regulatory policies, energy demand, and the pace of renewable energy adoption. Analysts' estimates provide a range of potential outcomes, reflecting the uncertainties inherent in the energy market.

Strategic initiatives and partnerships play a significant role in driving Eversource Energy's future growth. These collaborations enable the company to leverage expertise, share resources, and expand its market reach.

Eversource possesses several competitive advantages that position it favorably for future growth:

• Strong Market Position: As a major energy provider in the Northeast, Eversource benefits from a well-established infrastructure and customer base.
• Regulatory Expertise: The company's experience in navigating complex regulatory environments provides a competitive edge in securing approvals for infrastructure projects and renewable energy initiatives.
• Commitment to Innovation: Eversource's focus on adopting new technologies and investing in grid modernization enhances its operational efficiency and ability to meet evolving customer needs.

Here's an overview of some key financial data and analyst estimates:

For additional insights into Eversource Energy's financial health, you can explore: Breaking Down Eversource Energy (ES) Financial Health: Key Insights for Investors.