📊 PNW Key Takeaways
Is Pinnacle West Capital Corp. (PNW) a Good Investment?
Pinnacle West faces deteriorating fundamentals with negative free cash flow of -$393.1M, indicating capital spending far exceeds operational cash generation. Interest coverage of 1.5x provides minimal safety margin, while declining earnings (-2.4% YoY) and poor liquidity (0.60x current ratio) suggest the company is structurally challenged in recovering its heavy capital investments through rates.
Pinnacle West shows the mixed profile typical of a regulated electric utility: solid operating profitability, strong interest coverage, and dependable operating cash generation, but limited earnings growth and persistently negative free cash flow due to heavy capital spending. Fundamentals appear stable rather than improving, with leverage and weak liquidity constraining flexibility even though core operations remain sound.
Pinnacle West Capital Corp. Key Strengths (PNW)
- Stable regulated utility revenue base of $1.1B provides predictable cash flows
- Positive operating cash flow of $235.3M covers operational needs
- Large asset base of $30.7B provides regulatory defensibility and essential infrastructure control
- Healthy operating margin of 20.0% and net margin of 11.5% support solid core utility profitability
- Operating cash flow of $1.81B and interest coverage of 12.3x indicate debt service remains manageable
- ROE of 8.7% reflects acceptable returns for a regulated utility with a large asset base
PNW Stock Risks: Pinnacle West Capital Corp. Investment Risks
- Negative free cash flow of -$393.1M with capex ($628.4M) significantly exceeding operating cash flow
- Interest coverage ratio of 1.5x is critically low, leaving minimal buffer for earnings deterioration
- Current ratio of 0.60x and cash position of only $6.4M indicate severe liquidity constraints dependent on debt markets
- Declining net income (-2.4% YoY) and EPS (-3.6% YoY) despite flat revenue growth signals earnings pressure
- Debt/Equity of 1.39x with high leverage limits financial flexibility for distressed scenarios
- Revenue was flat and net income/EPS declined year over year, pointing to limited near-term growth momentum
- Free cash flow was negative $819.52M due to capex of $2.62B, reducing internally funded financial flexibility
- Current and quick ratios of 0.54x combined with debt/equity of 1.31x indicate weak liquidity and meaningful balance-sheet leverage
Key Metrics to Watch
- Free cash flow trend and capex levels relative to operating cash flow
- Interest coverage ratio sustainability given debt service obligations
- Current ratio and cash balance to assess liquidity adequacy
- Net income and operating margin trajectory amid regulatory rate recovery delays
- Free cash flow improvement versus capital expenditure needs
- EPS and operating cash flow trend relative to debt growth
Pinnacle West Capital Corp. (PNW) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The current ratio below 1.0x warrants monitoring of short-term liquidity.
PNW Profit Margin, ROE & Profitability Analysis
PNW vs Utilities Sector: How Pinnacle West Capital Corp. Compares
How Pinnacle West Capital Corp. compares to Utilities sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Pinnacle West Capital Corp. Stock Overvalued? PNW Valuation Analysis 2026
Based on fundamental analysis, Pinnacle West Capital Corp. shows some fundamental concerns relative to the Utilities sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Pinnacle West Capital Corp. Balance Sheet: PNW Debt, Cash & Liquidity
PNW Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Pinnacle West Capital Corp.'s revenue has grown significantly by 40% over the 5-year period, indicating strong business expansion. The most recent EPS of $4.41 reflects profitable operations.
PNW Revenue Growth, EPS Growth & YoY Performance
PNW Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $1.0B | -$338.0K | $-0.04 |
| Q3 2025 | $1.8B | $399.3M | $3.37 |
| Q2 2025 | $1.3B | $196.5M | $1.54 |
| Q1 2025 | $951.7M | -$338.0K | $-0.04 |
| Q3 2024 | $1.6B | $399.3M | $3.37 |
| Q2 2024 | $1.1B | $111.0M | $0.91 |
| Q1 2024 | $945.0M | $1.0M | $-0.03 |
| Q3 2023 | $1.5B | $330.6M | $2.88 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Pinnacle West Capital Corp. Dividends, Buybacks & Capital Allocation
PNW SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Pinnacle West Capital Corp. (CIK: 0000764622)
📋 Recent SEC Filings
❓ Frequently Asked Questions about PNW
What is the AI rating for PNW?
Pinnacle West Capital Corp. (PNW) has a Combined AI Grade of C from Claude (C) and ChatGPT (B) with 76% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are PNW's key strengths?
Claude: Stable regulated utility revenue base of $1.1B provides predictable cash flows. Positive operating cash flow of $235.3M covers operational needs. ChatGPT: Healthy operating margin of 20.0% and net margin of 11.5% support solid core utility profitability. Operating cash flow of $1.81B and interest coverage of 12.3x indicate debt service remains manageable.
What are the risks of investing in PNW?
Claude: Negative free cash flow of -$393.1M with capex ($628.4M) significantly exceeding operating cash flow. Interest coverage ratio of 1.5x is critically low, leaving minimal buffer for earnings deterioration. ChatGPT: Revenue was flat and net income/EPS declined year over year, pointing to limited near-term growth momentum. Free cash flow was negative $819.52M due to capex of $2.62B, reducing internally funded financial flexibility.
What is PNW's revenue and growth?
Pinnacle West Capital Corp. reported revenue of $1.1B.
Does PNW pay dividends?
Pinnacle West Capital Corp. pays dividends, with $108.5M distributed to shareholders in the trailing twelve months.
Where can I find PNW SEC filings?
Official SEC filings for Pinnacle West Capital Corp. (CIK: 0000764622) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is PNW's EPS?
Pinnacle West Capital Corp. has a diluted EPS of $0.27.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.
What is PNW's fundamental grade?
Based on our AI fundamental analysis in June 2026, Pinnacle West Capital Corp. has a C grade with 76% confidence. Review the strengths and risks sections above for full context. This is not investment advice.
Is PNW stock overvalued or undervalued?
Valuation metrics for PNW: ROE of 0.5% (sector avg: 10%), net margin of 2.9% (sector avg: 12%). Compare these metrics with sector averages to assess valuation.
What is PNW's AI grade for 2026?
Our dual AI analysis gives Pinnacle West Capital Corp. a combined C grade for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is PNW's free cash flow?
Pinnacle West Capital Corp.'s operating cash flow is $235.3M, with capital expenditures of $628.4M. FCF margin is -34.2%.
How does PNW compare to other Utilities stocks?
Vs Utilities sector averages: Net margin 2.9% (avg: 12%), ROE 0.5% (avg: 10%), current ratio 0.60 (avg: 0.8).