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CMS Energy (CMS)
NYSE:CMS
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CMS Energy
(NYSE:CMS)
78Outperform
Positive Factors
Regulatory Approval
The Michigan PSC approved a final order in CMS’s electric rate case proceeding, which is viewed as a constructive outcome for CMS Energy.
Valuation Outlook
CMS Energy's price objective has been raised to $80 from $73, reflecting a positive valuation outlook.
Negative Factors
Load Growth Concerns
Regulatory concerns of late from DTE mute load upside bias.
Regulatory Environment
The evolving regulatory landscape, and likely need for frequent rate case filings, is a key item to monitor.
CMS Energy (CMS) vs. S&P 500 (SPY)
Market Cap
$21.28B
Dividend Yield2.93%
Average Volume (3M)2.70M
Price to Earnings (P/E)21.4
Beta (1Y)0.13
Revenue Growth0.71%
EPS Growth11.07%
CountryUS
Employees8,324
SectorUtilities
Sector Strength88
IndustryRegulated Electric
Share Statistics
EPS (TTM)3.33
Shares Outstanding299,114,700
10 Day Avg. Volume2,914,410
30 Day Avg. Volume2,699,405
Financial Highlights & Ratios
PEG Ratio1.93
Price to Book (P/B)N/A
Price to Sales (P/S)2.92
Price to Cash Flow (P/CF)15.40
P/FCF Ratio11.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$75.38Price Target Upside5.35% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering13
CMS Energy Business Overview & Revenue Model
Company DescriptionCMS Energy Corporation operates as an energy company primarily in Michigan. The company operates through three segments: Electric Utility; Gas Utility; and Enterprises. The Electric Utility segment is involved in the generation, purchase, transmission, distribution, and sale of electricity. This segment generates electricity through coal, wind, gas, renewable energy, oil, and nuclear sources. Its distribution system comprises 208 miles of high-voltage distribution overhead lines; 4 miles of high-voltage distribution underground lines; 4,428 miles of high-voltage distribution overhead lines; 19 miles of high-voltage distribution underground lines; 82,474 miles of electric distribution overhead lines; 9,395 miles of underground distribution lines; 1,093 substations; and 3 battery facilities. The Gas Utility segment engages in the purchase, transmission, storage, distribution, and sale of natural gas, which includes 2,392 miles of transmission lines; 15 gas storage fields; 28,065 miles of distribution mains; and 8 compressor stations. The Enterprises segment is involved in the independent power production and marketing, including the development and operation of renewable generation. It serves 1.9 million electric and 1.8 million gas customers, including residential, commercial, and diversified industrial customers. The company was incorporated in 1987 and is headquartered in Jackson, Michigan.
How the Company Makes MoneyCMS Energy generates revenue primarily through its utility operations, with Consumers Energy being the main driver. The company earns money by charging customers for electricity and natural gas services based on regulated rates established by state utility commissions. These rates are designed to cover the costs of providing energy services and to allow for a reasonable return on investment. Revenue streams include the sale of electricity generated from a diversified portfolio of power plants, and the distribution and transportation of natural gas. In addition, CMS Energy may engage in strategic partnerships and initiatives aimed at enhancing energy efficiency and expanding renewable energy sources, which can contribute to its earnings. Regulatory factors and the company's ability to manage operational costs and investments in infrastructure play a significant role in its profitability.
CMS Energy Financial Statement Overview
Summary
CMS Energy demonstrates a solid financial foundation with strong revenue growth and profitability. While leverage is somewhat high, it is consistent with industry norms. The company’s ability to generate cash is a positive indicator of financial health, although careful monitoring of debt levels is advisable.Income Statement
CMS Energy has exhibited stable revenue growth over the past few years, with a notable increase in net income. The gross profit margin remains robust due to consistent revenue streams, but the EBITDA margin shows variability, indicating fluctuating operational efficiency.78
Positive
Balance Sheet
The company's debt-to-equity ratio indicates a moderate level of leverage, which is typical for the utilities sector. Return on Equity shows a healthy return, but the equity ratio suggests that a substantial portion of the assets is financed by debt, which could be a risk if market conditions change.70
Positive
Cash Flow
CMS Energy's operating cash flow is strong, and free cash flow has shown significant improvement, indicating good cash generation capabilities. The operating cash flow to net income ratio is favorable, demonstrating efficient cash management relative to earnings.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 7.51B | 7.46B | 8.60B | 7.33B | 6.68B | Gross Profit |
| 7.51B | 2.86B | 2.76B | 2.65B | 2.77B | EBIT |
| 1.49B | 1.24B | 295.00M | 209.00M | 398.00M | EBITDA |
| 3.07B | 2.78B | 2.55B | 2.44B | 2.36B | Net Income Common Stockholders |
| 1.00B | 887.00M | 837.00M | 728.00M | 755.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 103.00M | 227.00M | 164.00M | 452.00M | 168.00M | Total Assets |
| 35.92B | 33.52B | 31.35B | 28.75B | 29.67B | Total Debt |
| 11.34B | 15.64B | 15.43B | 12.47B | 15.20B | Net Debt |
| 11.34B | 15.42B | 15.26B | 12.02B | 15.03B | Total Liabilities |
| 27.17B | 25.39B | 23.76B | 21.57B | 23.59B | Stockholders Equity |
| 11.39B | 7.54B | 7.01B | 6.63B | 5.50B |
| Cash Flow | Free Cash Flow | |||
| 2.37B | -265.00M | -1.63B | -390.00M | -1.17B | Operating Cash Flow |
| 2.37B | 2.31B | 855.00M | 1.82B | 1.28B | Investing Cash Flow |
| -3.05B | -3.39B | -2.48B | -1.23B | -2.87B | Financing Cash Flow |
| 614.00M | 1.14B | 1.32B | -295.00M | 1.62B |
CMS Energy Technical Analysis
Neutral
71.55
Price Trends
71.44
Positive
69.08
Positive
67.34
Positive
Market Momentum
0.98
Negative
64.69
Neutral
87.85
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CMS, the sentiment is Neutral. The current price of 71.55 is below the 20-day moving average (MA) of 73.16, above the 50-day MA of 71.44, and above the 200-day MA of 67.34, indicating a neutral trend. The MACD of 0.98 indicates Negative momentum. The RSI at 64.69 is Neutral, neither overbought nor oversold. The STOCH value of 87.85 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CMS.
CMS Energy Risk Analysis
CMS Energy disclosed 31 risk factors in its most recent earnings report. CMS Energy reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
CMS Energy Peers Comparison
Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $21.28B | 21.37 | 12.72% | 2.93% | 0.71% | 11.07% | |
70 Outperform | $21.58B | 16.93 | 8.83% | 5.65% | 7.72% | 6.49% | |
70 Outperform | $22.73B | 23.23 | 8.54% | 4.32% | 4.68% | -11.66% | |
68 Neutral | $25.25B | 28.53 | 6.33% | 3.06% | 1.80% | 19.78% | |
66 Neutral | $23.63B | 22.92 | 10.02% | 2.33% | -0.61% | 15.54% | |
66 Neutral | $20.67B | 24.80 | 5.56% | 5.34% | -0.08% | ― | |
65 Neutral | $11.78B | 15.57 | 6.20% | 4.58% | 5.53% | -8.93% |
* Utilities Sector Average
Performance Comparison
CMS
CMS Energy
71.55
15.67
28.04%
CNP
Centerpoint Energy
36.19
9.48
35.49%
EIX
Edison International
55.40
-10.16
-15.50%
FE
FirstEnergy
40.09
4.22
11.76%
ES
Eversource Energy
55.69
-0.41
-0.73%
PPL
PPL
34.20
8.43
32.71%
CMS Energy Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: 7.43% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance, robust investment plans, and significant achievements in customer reliability and renewable energy expansion. However, challenges such as weather-related financial headwinds and maintenance outages at key facilities were noted. The positive aspects, particularly the financial performance and future growth plans, were emphasized more prominently.Highlights
Improved Customer Reliability
In 2024, CMS Energy restored power to over 93% of customers within 24 hours, compared with 87% in 2023, and the average customer experienced 21 fewer power outage minutes.
20-Year Renewable Energy Plan
CMS Energy filed a plan to incorporate nine gigawatts of solar and four gigawatts of wind over the next two decades to meet Michigan's 2023 energy law requirements.
Financial Performance
Adjusted earnings per share of $3.34 for 2024, at the high end of the guidance range. 2025 EPS guidance raised to $3.54 to $3.60, representing 6% to 8% growth.
Increased Investment Plan
Five-year $20 billion utility customer investment plan, up $3 billion from the prior plan, to support 8.5% rate-based growth through 2029.
Non-Utility Business Growth
Expecting incremental earnings from NorthStar Clean Energy, with attractive pricing from capacity and energy sold at Dearborn Industrial Generation.
Lowlights
Weather-Related Financial Headwinds
Significant weather-related financial challenges due to mild winter temperatures, with 2024 being the warmest winter in the last 25 years based on heating degree days.
DIG Facility Maintenance Outage
Planned maintenance outage at the Dearborn Industrial Generation (DIG) facility, resulting in a temporary reduction in contribution.
Company Guidance
During the CMS Energy 2024 Year End Results call, several key metrics and guidance points were highlighted. CMS Energy achieved an adjusted earnings per share (EPS) of $3.34, which was at the high end of their guidance range for 2024. Looking ahead, the company raised its 2025 guidance to an EPS range of $3.54 to $3.60, representing a 6% to 8% growth, and continues to target the high end of this range. CMS Energy outlined a $20 billion five-year utility customer investment plan, up by $3 billion from the previous plan, to enhance customer reliability and expand its renewable energy portfolio, which includes plans for nine gigawatts of solar and four gigawatts of wind over the next two decades. The company's dividend policy remains steady, aiming for a 60% payout ratio. Additionally, CMS anticipates continued growth drivers from non-utility businesses, energy efficiency incentives, and a robust regulatory environment in Michigan. The company plans to manage its financials with up to $500 million of equity and approximately $1.3 billion in new long-term debt for 2025.CMS Energy Corporate Events
DividendsBusiness Operations and StrategyFinancial Disclosures
CMS Energy Boosts Dividend Amid Strong 2024 Earnings
Positive
Feb 6, 2025
CMS Energy reported strong financial results for 2024 with an increase in earnings per share to $3.33 from $3.01 in 2023 and adjusted earnings per share rising to $3.34 from $3.11. The company announced an 11-cent increase in its annual dividend for 2025 and raised its adjusted EPS guidance to $3.54 to $3.60. Significant investments in the electric grid and economic development efforts led to improved power restoration times and job creation in Michigan, positioning stakeholders positively for 2025.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.