Breaking Down Evergy, Inc. (EVRG) Financial Health: Key Insights for Investors

You're looking at Evergy, Inc. (EVRG) and wondering if the regulated utility story still has juice, especially with the market's recent jitters. Honestly, the picture is one of steady, capital-intensive growth, but with a few near-term weather-related hiccups you need to defintely track. The company recently narrowed its 2025 adjusted earnings per share (EPS) guidance to a range of $3.92 to $4.02, down from the original high end, largely due to a cooler-than-expected summer that dampened demand-a classic utility risk. Still, the long-term view is anchored by a massive $17.5 billion capital investment plan through 2029, which is set to drive rate base growth of around 8.5% annually and is why analysts maintain a consensus 'Buy' rating with an average price target of $80.72. We'll break down how this massive spending, alongside a forecast annual revenue of nearly $5.88 billion for 2025, translates into a concrete investment thesis for you.

Revenue Analysis

You're looking for a clear picture of how Evergy, Inc. (EVRG) actually makes its money, and the short answer is: it's a regulated utility model, so revenue is stable but growth is modest and highly sensitive to weather. The most recent trailing twelve months (TTM) revenue ending September 30, 2025, stood at approximately $5.88 billion, but the year-over-year growth rate has softened significantly to just +1.75%.

Primary Revenue Streams and Segment Contribution

Evergy's revenue is fundamentally rooted in the sale and delivery of electricity across its service territories in Kansas and Missouri. Unlike a tech company, the sources are straightforward: selling power to retail customers (Residential, Commercial, Industrial) and moving power for others (Wholesale and Transmission). This is a defintely predictable model, but it means you won't see explosive growth.

The core of the business is the electric retail segment. For the three months ended June 30, 2025 (Q2 2025), the total revenue was $1,437.0 million. Here's the quick math on where that cash came from:

• Residential sales were the largest single segment, contributing about 34.2% of Q2 2025 revenue.
• Commercial customers followed closely, making up roughly 32.5%.
• Industrial, Wholesale, and Transmission revenues round out the rest, providing diversification within the regulated structure.

The company's structure-generation, transmission, distribution, and sale of electricity-means your investment is tied to rate base growth and regulated returns, not market-driven product sales. You can get a deeper understanding of the company's long-term strategy by reviewing their Mission Statement, Vision, & Core Values of Evergy, Inc. (EVRG).

Near-Term Revenue Shifts and Risks

The year-over-year revenue trend shows a slowdown. While the TTM growth was +1.75%, the Q3 2025 revenue of $1.81 billion was essentially flat, showing a slight decrease of -0.08% compared to the same quarter last year. This miss was largely attributed to external factors, which is a common risk in the utility space.

What this estimate hides is the impact of weather. The company specifically cited cooler than normal summer weather in 2025 as a factor in narrowing its full-year guidance, as lower temperatures reduce demand for air conditioning, which is a major revenue driver. This is a clear reminder that a utility's top line is exposed to Mother Nature, even with a regulated rate structure.

Notice the sharp declines in the core retail segments in Q2 2025, with Residential revenue dropping (8.3%) and Commercial revenue down (3.7%) year-over-year. But, the Wholesale and Other segments saw massive percentage increases-24.4% and 95.5%, respectively-which helped stabilize the overall revenue number. This suggests a strategic shift or a temporary market condition is boosting non-retail sales, but you need to watch if those wholesale gains are sticky, or just a one-off. The retail drop is the real headwind.

Profitability Metrics

You need to know if Evergy, Inc. (EVRG) is generating enough profit from its core operations to justify its valuation and future capital investments. The short answer is yes, they are profitable, but the margins are tight and face near-term pressure. We're looking at a utility business, so don't expect the sky-high gross margins of a tech company, but we do need to see consistent net income (Net Profit).

For the Trailing Twelve Months (TTM) leading up to the end of Q3 2025, Evergy, Inc.'s profitability shows a solid, if unspectacular, performance typical of a regulated utility. Here's the quick math on the key margins, based on LTM revenue of approximately $5.879 billion:

That 61.09% Gross Profit Margin is strong, reflecting the regulated nature of the business where the cost of goods sold (primarily fuel and purchased power) is often passed through to customers. But the drop to a 25.62% Operating Profit Margin shows where the real operational costs-like depreciation, amortization, and general administrative expenses-kick in. The final 14.5% Net Profit Margin is the bottom line you care about most.

Trends and Operational Efficiency

The trend is the risk here. Evergy, Inc. is facing headwinds that are chipping away at its margins. For the year-to-date period ending September 30, 2025, the company's adjusted earnings per share (EPS) was $3.41, slightly down from $3.46 in the same period a year prior. This negative earnings growth of -0.4% over the past year is a flashing yellow light for investors.

Operational efficiency is a key concern, especially in cost management. In Q3 2025, Operating and Maintenance (O&M) expenses increased to $394.8 million, driven by rising labor costs and higher employee benefits. This is a direct hit to the operating margin. Management has acknowledged this, narrowing their full-year 2025 adjusted EPS guidance to a range of $3.92 to $4.02-a move primarily attributed to cooler-than-normal summer weather impacting demand, plus higher interest and depreciation expenses. Cooler weather is an external factor, but cost control is internal. They need to defintely execute on their announced cost and mitigation actions to offset these pressures.

The Industry Comparison Reality Check

When you compare Evergy, Inc.'s key profitability ratios to the broader Electric Utilities industry, the company is lagging, and that's the uncomfortable truth. A regulated utility should be a stable performer, but its ratios indicate it's not utilizing its assets or equity as efficiently as its peers. This is what you should focus on:

• Net Margin: At 11.92% (as of June 2025), it's noted as being below industry benchmarks.
• Return on Equity (ROE): The 1.72% ROE (as of June 2025) is significantly below industry averages, suggesting a challenge in efficiently utilizing shareholder capital.
• Return on Assets (ROA): At 0.52% (as of June 2025), this also trails the industry, pointing to difficulties in maximizing returns from its $33.44 billion in total assets.

This comparison shows that while Evergy, Inc. is making money, it's not making enough money relative to the capital it employs, especially when compared to its peer group. The negative earnings growth over the past year is also starkly different from the Electric Utilities industry average of 6% annual earnings growth. For a deeper dive into the company's full financial picture, you can check out the full analysis at Breaking Down Evergy, Inc. (EVRG) Financial Health: Key Insights for Investors. Your next step should be to look closely at the Q4 2025 report for concrete evidence of cost-cutting success.

Debt vs. Equity Structure

You need to know how Evergy, Inc. (EVRG) is funding its massive capital plan, and the answer is a balanced mix, but one that leans heavily on debt-which is typical for a utility. As of the second quarter of 2025, Evergy, Inc.'s total debt stood at approximately $14.81 billion, set against total stockholders' equity of nearly $9.96 billion. This ratio is the key to understanding its financial leverage.

Here's the quick math on how that debt breaks down:

• Long-Term Debt: Approximately $12.40 billion.
• Short-Term Debt and Current Maturities: Approximately $2.41 billion.

The total debt figure is up, reflecting the company's significant infrastructure investment needs, especially for its energy transition plans. You can see the full picture in our deep dive Breaking Down Evergy, Inc. (EVRG) Financial Health: Key Insights for Investors.

The Debt-to-Equity (D/E) ratio is the most telling metric here. Evergy, Inc.'s D/E ratio as of June 2025 was approximately 1.49. This means the company uses about $1.49 of debt for every $1.00 of shareholder equity to finance its assets. To be fair, utilities (being capital-intensive) usually have higher D/E ratios than, say, a software company. The average D/E ratio for the Electric Utilities industry in early 2025 was around 1.582, so Evergy, Inc. is running slightly below the industry average, which is defintely a good sign for solvency.

The company is managing this leverage with a deliberate financing strategy. For its 2025-2029 capital expenditure plan, Evergy, Inc. is targeting a balanced funding mix, projecting approximately $5.8 billion in incremental debt alongside $2.8 billion in equity and equity-like securities. This shows a clear intent to fund growth through both debt financing and equity funding, maintaining a calculated level of financial leverage to maximize shareholder returns.

Still, the cost of that debt matters. Evergy, Inc.'s Senior Unsecured Debt currently holds a credit rating of Baa2 from Moody's and BBB from S&P Global, both with a Stable Outlook. While S&P downgraded the rating to BBB from BBB+ in late 2023 due to weakened financial metrics from higher interest and capital spending, the stable outlook reflects the expectation that its key financial metric (Funds From Operations to Debt) will remain in the 14%-15% range through 2026. This rating is investment-grade, but it's a reminder that debt capacity is not unlimited, and rising interest rates will pressure their interest expense.

Here is a snapshot of the core financial components:

What this estimate hides is the interest rate risk; a higher debt load in a rising rate environment means more cash is diverted to interest payments, which can slow down equity growth.

Liquidity and Solvency

You need to know if Evergy, Inc. (EVRG) can meet its immediate obligations, and the short answer is that its liquidity ratios look tight, which is typical for a capital-intensive utility, but their operating cash flow provides a necessary cushion.

Utilities like Evergy, Inc. often run with low liquidity because their revenue is stable and predictable, so they don't need a massive cash hoard like a tech startup. Still, the numbers are important. As of the second quarter of 2025, the company's current ratio-which is current assets divided by current liabilities-stood at about 0.50. Here's the quick math: $1,865.5 million in Current Assets against $3,709.6 million in Current Liabilities.

The quick ratio (acid-test ratio), which excludes less liquid inventory, is even lower at approximately 0.27. This means for every dollar of short-term debt, Evergy, Inc. has only 27 cents in highly liquid assets to cover it. This low figure is defintely a point of focus for a traditional financial analyst, but for a regulated utility with predictable cash inflows, it's a structural reality. You just need to keep a close eye on their cash flow. If you want to dive deeper into their long-term strategy that supports this structure, check out their Mission Statement, Vision, & Core Values of Evergy, Inc. (EVRG).

Working Capital and Cash Flow Trends

The consequence of those low ratios is a significant working capital deficit. As of Q2 2025, Evergy, Inc.'s working capital (Current Assets minus Current Liabilities) was a negative $(1,844.1) million. This negative trend is not new and reflects the company's reliance on short-term borrowings, like commercial paper, to manage the gap between cash coming in and bills going out. It's a common, managed risk in the utility sector, but it means they must maintain consistent access to capital markets.

The cash flow statement for the nine months ended September 30, 2025, tells the real story about their ability to manage this:

• Operating Cash Flow (OCF): A strong inflow of $1,711.2 million. This is the core strength, covering day-to-day operations and dividends.
• Investing Cash Flow (ICF): A significant outflow of $(1,902.0) million. This is primarily capital expenditures for grid modernization and renewable energy projects, a necessary use of cash for a growth-focused utility.
• Financing Cash Flow (FCF): An inflow of $204.5 million. This reflects the net effect of issuing new debt and equity to fund the capital plan, partially offset by dividend payments of $(455.7) million.

The key takeaway is that their operating cash flow is robust, but it's not enough to cover the massive capital investment program. This means Evergy, Inc. is structurally dependent on the financing markets-issuing debt and equity-to fund its growth and maintain its dividend. The liquidity strength isn't in their balance sheet ratios; it's in their stable, regulated earnings stream that reliably generates that $1,711.2 million in OCF. The primary near-term risk is an unexpected spike in interest rates or a sudden tightening of the credit markets, which would make that essential financing more expensive.

Next Step: Portfolio Manager: Model the impact of a 100-basis-point increase in Evergy, Inc.'s cost of debt on the 2026 Free Cash Flow to Equity (FCFE) by the end of next week.

Valuation Analysis

You're looking at Evergy, Inc. (EVRG) and asking the right question: Is this utility stock priced for a near-term pop or is it already trading at a premium? The direct takeaway is that Evergy is currently priced at a slight premium to its historical averages, reflecting the market's positive outlook on its regulated business model and growth prospects, but it's defintely not in bubble territory.

The consensus among the 11 analysts covering the stock as of November 2025 is a Buy. Their average 12-month price target is set at $80.72, which offers a modest upside from the recent trading price of around $76.73. This suggests that while the stock has run up, there's still room to grow, especially as the company benefits from new energy infrastructure investment related to data centers.

Key Valuation Multiples (2025 Fiscal Year)

When assessing a utility like Evergy, you need to look beyond just the stock price. The core valuation multiples tell a clearer story about relative value. Here's the quick math on where Evergy stands compared to its earnings, book value, and operational cash flow:

• Price-to-Earnings (P/E): The trailing P/E is 20.94. For a regulated utility, this is on the higher end, indicating investors are willing to pay more than 20 times the company's last twelve months of earnings.
• Forward P/E: This drops to a more reasonable 17.69, based on the company's fiscal year 2025 earnings per share (EPS) guidance of $3.920 to $4.020. This forward view suggests a more attractive valuation for future earnings.
• Price-to-Book (P/B): The ratio is 1.71. A P/B over 1.0 means the stock trades above its net asset value, which is typical for a healthy utility with a strong rate base.
• EV/EBITDA: The Enterprise Value-to-EBITDA (a measure that includes debt) is 11.93. This is slightly above the median for the Utilities - Regulated industry, which is a signal to watch for potential overvaluation compared to peers.

The forward P/E is the most compelling number here. It signals that the market expects earnings growth to outpace the current stock price, which is a good sign for a utility. You can read more about the company's long-term strategy in their Mission Statement, Vision, & Core Values of Evergy, Inc. (EVRG).

Stock Performance and Dividend Profile

Evergy's stock has shown solid momentum, increasing by over 18% over the last year, pushing its price toward the 52-week high of $79.32. The 52-week low was $59.67. Still, the stock's movement has been less volatile than the broader market, which is what you want from a defensive utility play.

For income-focused investors, the dividend profile remains strong, a critical component of total return for utility stocks:

The quarterly dividend was recently raised to $0.695, marking 20 consecutive years of dividend growth. A payout ratio of 76.16% is high, but for a regulated utility with stable cash flows, it's generally considered sustainable. The company is committed to returning capital, and that's a key reason investors hold this stock.

My advice is to view Evergy as a 'Hold with a Buy bias.' The valuation is full, but the consistent dividend growth and the tailwind from data center energy demand provide a clear path for the stock to hit the $80.72 analyst target. Your next step should be to monitor the Q4 2025 earnings call for any changes to the 2026 capital expenditure plan.

Risk Factors

You're looking for the unvarnished truth about Evergy, Inc. (EVRG)'s financial health, and the reality is that even a regulated utility faces significant near-term risks. The primary challenge right now is managing external factors like weather and regulatory timing, which directly impact earnings per share (EPS).

For the 2025 fiscal year, the company had to narrow its adjusted EPS guidance to a range of $3.92 to $4.02, down from the original range of $3.92 to $4.12. Here's the quick math: unseasonably mild summer weather created a $0.13 per share headwind in the second and third quarters, which even strong mitigation efforts couldn't fully offset. That's a real-world operational risk hitting the bottom line.

Operational and Market Headwinds

The biggest operational risk Evergy, Inc. (EVRG) is actively managing is the unpredictable nature of customer demand, which is heavily influenced by weather. Cooler-than-normal summer temperatures in 2025 meant less air conditioning use, which reduced electricity sales. Still, management implemented mitigation actions that provided an estimated $0.10 of EPS benefit, offsetting a substantial portion of the weather impact. They are defintely fighting back against Mother Nature.

• Weather Volatility: A $0.13/share negative impact in Q2/Q3 2025 from mild weather.
• Financing Costs: Higher interest and depreciation expenses are a drag, linked to the necessary infrastructure investments.
• Dilution Risk: Anticipate an incremental $0.02 of EPS dilution in 2025 from convertible notes.

Another major operational risk is the sheer scale of their long-term capital plan, which calls for $17.5 billion in investment between 2025 and 2029. Any significant cost overruns or funding delays on these massive grid modernization projects would threaten their projected rate base growth and long-term adjusted EPS growth target of 4% to 6% through 2029.

Regulatory and Financial Structure Risks

As a regulated utility, Evergy, Inc. (EVRG)'s financial health is inextricably linked to state regulators in Kansas and Missouri. The risk here is that delayed or unfavorable regulatory approvals on rate cases could prevent the timely recovery of capital investments, putting pressure on cash flow. This is a constant battle for utilities.

From a balance sheet perspective, the company carries a high leverage profile. Financial health analysis highlights this risk with a Debt-to-Equity ratio of 1.49 and liquidity concerns, evidenced by a low Current Ratio of 0.50 and a Quick Ratio of 0.27.

The company is addressing this with strategic regulatory wins, like the passage of Missouri Senate Bill 4 and Kansas Senate Bill 98, which are designed to support infrastructure investment and attract large data center customers. You can read more about the strategic direction in the Mission Statement, Vision, & Core Values of Evergy, Inc. (EVRG).

The strategy is clear: use new tariffs to ensure major economic development projects, like the new data centers, pay their fair share of the required infrastructure investment. This protects existing customers and helps spread the fixed costs of the system over a broader base, which is the best way to de-risk a utility's financial future.

Growth Opportunities

You're looking at Evergy, Inc. (EVRG) and wondering where the real money is made over the next five years. The direct takeaway is this: Evergy's growth isn't about massive new territory; it's about regulated, capital-intensive grid modernization and a huge surge in demand from data centers in its Kansas and Missouri service area. This is a utility stock with a tech-sector-adjacent demand driver.

The company has narrowed its 2025 adjusted earnings per share (EPS) guidance to a range of $3.92 to $4.02, with a midpoint of $3.97, a slight dip from the original $4.02 midpoint due to cooler summer weather. Still, their long-term adjusted EPS growth target of 4% to 6% annually through 2029 remains firmly in place, and they expect to hit the upper half of that range starting in 2026. That's a solid, predictable utility return.

Capital Plan and Revenue Projections

The engine for this growth is the massive $17.5 billion capital investment plan spanning 2025 through 2029. Here's the quick math: this spending is projected to drive an annualized rate base growth of approximately 8.5% through 2029. That rate base increase is what regulators allow them to earn a return on, which translates directly into future earnings. They just increased the quarterly dividend by 4% to $0.6950 per share, or $2.78 annualized, which shows confidence in that regulated growth. They are defintely putting their money where their mouth is.

• Invest $17.5 billion in infrastructure (2025-2029).
• Target 4% to 6% annual adjusted EPS growth through 2029.
• Achieve 8.5% annualized rate base growth.

Key Growth Drivers: Data Centers and Decarbonization

The biggest near-term opportunity is the economic development pipeline, especially the demand from large customers like hyperscale data centers. Evergy, Inc. has a robust pipeline with over 15 gigawatts (GW) of potential opportunities. They already have significant projects from companies like Google, Panasonic, and Meta, representing 800 megawatts (MW) of load. This new demand is a game-changer for a utility.

This industrial load growth is expected to push their annual load growth forecast from the base 2% to 3% to a potential 4% to 5% through 2029, assuming these new data center agreements finalize. To meet this, the 2025 Integrated Resource Plan (IRP) is aggressive, calling for over 2.1 GW of new resources by 2035, including 624 MW of solar by 2025 and 1,860 MW of natural gas by 2030. They're also exploring advanced technology, having signed a memorandum of understanding with TerraPower to investigate siting a Natrium reactor in Kansas.

Competitive Advantages & Strategic Moves

Evergy, Inc.'s primary competitive edge is its regulated status combined with favorable legislative support. Recent regulatory approvals, like Missouri Senate Bill 4 and Kansas Senate Bill 98, streamline infrastructure investment and help attract those large data center customers, which is a big win. This regulatory structure also allows for cost recovery on investments, stabilizing cash flow.

Their new tariff structure for large customers is a smart move, too. It includes key safeguards like 12- to 17-year commitment terms and an 80% minimum monthly bill requirement. This de-risks the massive capital outlay and ensures a predictable return. Plus, as a utility that already gets about half of its power from carbon-free sources, they are well-positioned for the ongoing energy transition. For a deeper dive into the valuation, you should read the full post at Breaking Down Evergy, Inc. (EVRG) Financial Health: Key Insights for Investors.