Algonquin Power & Utilities Corp. (AQN)
Valuation Overview•Is Algonquin Power & Utilities Corp. Overvalued or Undervalued?
The market is pricing the stock in line with historical averages, assuming steady-state growth.
Fragile underlying quality score of 41/100; weak margins or elevated debt leverage warrant caution.
Analysts remain bullish, forecasting further upside expansion with consensus targets suggesting solid gains.
Verdict: Average quality business weighed down by significant profitability concerns.
Wall Street is highly bullish, projecting significant upside alongside robust expected earnings growth. This is paired with healthy capital returns, anchored by a strong, well-covered dividend yield.
AQN struggles with subpar profitability and pressured margins. However, this is severely offset by a highly leveraged balance sheet (Debt/EBITDA > 4.0x) and elevated financial risk.
The company is facing top-line contraction (-4.2% 3Y CAGR) paired with stable bottom-line earnings. The company maintains healthy operational efficiency with a 19.8% operating margin.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $773.5M | +4.9% | -4.2% | +7.7% | +12.6% | |
| EBITDA | $277.1M | — | +2.5% | — | — | |
| Net Income | $85.0M | +113.1% | — | — | +7.9% | |
| EPS (Diluted) | $0.11 | +112.7% | — | -30.0% | -2.6% | |
| Free Cash Flow | -$85.1M | +582.5% | — | — | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 58.7% | 72.4% | 70.9% | 72.1% |
| Operating Margin | 19.8% | 20.1% | 18.6% | 20.7% |
| Net Margin | 6.7% | -17.0% | -9.4% | 6.5% |
| FCF Margin | -4.4% | 13.6% | -5.4% | -39.7% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $0.11 | $0.13 | +18.2% | ||
| Q1'26 | $0.04 | $0.06 | +50.0% | ||
| Q4'25 | $0.06 | $0.09 | +50.0% | ||
| Q3'25 | $0.04 | $0.04 | +0.0% | ||
| Q2'25 | $0.09 | $0.14 | +55.6% | ||
| Q1'25 | $0.10 | $0.06 | -40.0% | ||
| Q4'24 | $0.09 | $0.08 | -11.1% | ||
| Q3'24 | $0.08 | $0.09 | +12.5% |
Total return is +7.0% (1Y), lagging the benchmark by -18.0%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | -2.7% | -12.0% | — |
| 1Y | +7.0% | -18.0% | +4.5% |
| 3YCAGR | -6.6% | -26.2% | +12.5% |
| 5YCAGR | -10.9% | -23.3% | +17.0% |
| 10YCAGR | +1.8% | -11.8% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Algonquin Power & Utilities Corp. (AQN) valuation, health, and returns.
Algonquin Power & Utilities Corp. is estimated to be fairly valued under our discounted cash flow framework. relative multiples indicate the stock is Fair versus peers compared to industry peers. trading near fair value (DCF: $0.00)
Algonquin Power & Utilities Corp. has multiple valuation anchors: DCF Intrinsic Value: $0.00 | Peer Relative Fair Value: $5.59 | Wall Street Analyst Target: $6.81 (implying +15.6% upside). A convergence of these signals offers higher conviction.
Algonquin Power & Utilities Corp. displays fair financial health with a composite quality score of 41/100, supported by a Piotroski F-Score of 6/9, Return on Invested Capital (ROIC) of 3.2%.
Algonquin Power & Utilities Corp. pays a 4.5% dividend yield, covered by a 113% payout ratio with 0 years of growth, supplemented by a 0.0% buyback yield.
Algonquin Power & Utilities Corp.'s current growth trajectory is Accelerating. The company achieved +4.9% 1Y revenue growth and +112.7% 1Y EPS growth, compared to its 3Y revenue CAGR of -4.2%.
Wall Street consensus is Hold based on 13 analysts, beating EPS expectations in 50% of recent quarters with a 3-quarter streak. The consensus price target represents a +15.6% change from current levels.
Investment risks for Algonquin Power & Utilities Corp. include: -17.6% 1-year max drawdown, stretched payout ratio. Volatility risk is characterized by a beta of 0.39x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.