Engie Brasil Energia SA (EGIEY) AI Stock Analysis

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Engie Brasil Energia SA

(OTC:EGIEY)

73Outperform

Engie Brasil Energia SA's overall score reflects strong profitability and positive technical momentum. Valuation metrics suggest the stock is attractively priced. However, challenges in liquidity and increased leverage pose risks. The recent earnings call provided a balanced outlook with significant strategic achievements but also underlined operational challenges.

Engie Brasil Energia SA (EGIEY) vs. S&P 500 (SPY)

Market Cap

$5.87B

Dividend Yield5.82%

Average Volume (3M)11.54K

Price to Earnings (P/E)9.8

Beta (1Y)0.28

Revenue GrowthN/A

EPS GrowthN/A

CountryUS

Employees1,247

SectorUtilities

Sector Strength83

IndustryRegulated Electric

Share Statistics

EPS (TTM)0.16

Shares Outstanding815,928,000

10 Day Avg. Volume4,144

30 Day Avg. Volume11,538

Financial Highlights & Ratios

PEG Ratio-0.47

Price to Book (P/B)2.80

Price to Sales (P/S)0.00

P/FCF Ratio-15.41

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Engie Brasil Energia SA Business Overview & Revenue Model

Company DescriptionEngie Brasil Energia SA (EGIEY) is a leading energy company in Brazil, primarily engaged in the generation and commercialization of electricity. The company operates a diverse portfolio of power plants across the country, including renewable energy sources such as hydroelectric, wind, and solar power, as well as conventional thermal power plants. Engie Brasil Energia is a subsidiary of the global energy group Engie, which focuses on providing sustainable energy solutions worldwide.

How the Company Makes MoneyEngie Brasil Energia SA generates revenue primarily through the sale of electricity generated from its diverse portfolio of power plants. The company sells electricity on both regulated and non-regulated markets, providing power to distribution companies, industrial clients, and other consumers. Its revenue streams are bolstered by long-term power purchase agreements and participation in energy auctions, which provide stable and predictable income. Additionally, Engie's investment in renewable energy projects aligns with global trends towards sustainability, enhancing its market position and potential for future earnings. Strategic partnerships and initiatives to optimize operational efficiency further contribute to the company's financial performance.

Engie Brasil Energia SA Financial Statement Overview

Summary

Engie Brasil Energia SA demonstrates strong profitability with robust margins and an impressive ROE. However, the high debt-to-equity ratio and negative free cash flow pose significant risks. The company needs to address these liquidity challenges to maintain sustainable growth.

Income Statement

Positive

Engie Brasil Energia SA shows a strong gross profit margin of 53.63% for TTM (Trailing-Twelve-Months), indicating efficient cost management. The net profit margin for the same period is 28.94%, reflecting substantial profitability. Revenue growth has been modest over the past year, with a 3.60% increase. However, the decline in net income from 2024 to TTM affects the overall performance. EBIT and EBITDA margins remain robust at 48.91% and 62.99%, respectively, though EBITDA has decreased compared to the previous year.

Balance Sheet

Positive

The company's balance sheet is characterized by a high debt-to-equity ratio of 2.14, indicating significant leverage. Return on Equity (ROE) stands at 27.84% for TTM, which is impressive. The equity ratio is 22.90%, suggesting a balanced approach to financing through equity. However, the high leverage could pose risks in a changing interest rate environment.

Cash Flow

Neutral

The free cash flow has deteriorated significantly, moving from negative figures in the previous year to further negative in TTM. The operating cash flow to net income ratio of 1.23 is healthy, indicating good cash generation relative to profits. However, the free cash flow to net income ratio is negative, highlighting potential liquidity concerns.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
11.62B	11.22B	10.75B	11.91B	12.54B	12.26B
	Gross Profit
6.23B	6.11B	5.91B	5.59B	5.91B	5.43B
	EBIT
5.69B	5.57B	5.47B	5.98B	5.96B	4.88B
	EBITDA
7.32B	8.56B	6.88B	6.21B	7.00B	5.79B
	Net Income Common Stockholders
3.36B	4.28B	3.43B	2.66B	1.56B	2.80B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
6.03B	4.39B	5.33B	2.81B	5.70B	5.16B
	Total Assets
52.76B	50.11B	42.22B	38.19B	38.12B	35.19B
	Total Debt
25.84B	24.13B	20.68B	17.94B	20.26B	16.89B
	Net Debt
20.27B	20.18B	15.42B	15.71B	15.10B	12.35B
	Total Liabilities
39.61B	37.83B	32.41B	29.75B	30.18B	27.44B
	Stockholders Equity
12.08B	11.27B	8.86B	8.44B	7.93B	7.74B
Cash Flow		Free Cash Flow
-2.19B	-2.49B	2.02B	1.76B	748.88M	-6.77M
	Operating Cash Flow
4.13B	4.15B	4.59B	3.34B	1.99B	1.34B
	Investing Cash Flow
-6.35B	-5.91B	-2.04B	-1.78B	-339.05M	-996.94M
	Financing Cash Flow
2.53B	459.25M	476.35M	-4.47B	-1.03B	323.37M

Engie Brasil Energia SA Technical Analysis

Technical Analysis Sentiment

Positive

Last Price7.19

Price Trends

50DMA

6.76

Positive

100DMA

6.37

Positive

200DMA

6.77

Positive

Market Momentum

MACD

0.12

Negative

RSI

59.52

Neutral

STOCH

78.64

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EGIEY, the sentiment is Positive. The current price of 7.19 is above the 20-day moving average (MA) of 7.02, above the 50-day MA of 6.76, and above the 200-day MA of 6.77, indicating a bullish trend. The MACD of 0.12 indicates Negative momentum. The RSI at 59.52 is Neutral, neither overbought nor oversold. The STOCH value of 78.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EGIEY.

Engie Brasil Energia SA Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EBR.B	74 Outperform	$17.22B	10.40	8.58%	3.87%	0.18%	99.46%
EGIEY	73 Outperform	$5.87B	9.78	44.32%	5.82%	―	―
POR	72 Outperform	$4.68B	14.77	8.33%	4.68%	11.83%	9.53%
TXNM	69 Neutral	$4.90B	23.52	8.37%	3.01%	10.10%	149.78%
PNW	68 Neutral	$10.95B	18.23	9.08%	3.87%	10.69%	12.37%
ENIC	68 Neutral	$5.30B	28.48	3.67%	6.01%	-12.73%	-74.65%
Sector *	63 Neutral	$8.53B	10.18	4.66%	4.38%	3.77%	-12.97%

* Utilities Sector Average

Performance Comparison

EGIEY

Engie Brasil Energia SA

7.19

-1.08

-13.06%

EBR.B

Centrais Elc Braz Pfb B Elbras

8.11

0.41

5.32%

PNW

Pinnacle West Capital

91.74

16.84

22.48%

TXNM

TXNM Energy

52.88

15.64

42.00%

POR

Portland GE

42.69

-0.25

-0.58%

ENIC

Enel Chile SA

3.72

0.92

32.86%

Engie Brasil Energia SA Earnings Call Summary

Earnings Call Date:May 08, 2025

(Q1-2025)

% Change Since: 5.27%|

Next Earnings Date:Aug 07, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed picture for Engie Brasil Energia, highlighting significant achievements in capacity growth, financial performance, and sustainability, while also facing challenges in power generation, curtailment, and debt management.

Q1-2025 Updates

Positive Updates

Significant Increase in Installed Capacity

Engie Brasil Energia added over 900 megawatts of installed capacity, reaching approximately 11.6 gigawatts in total, including the acquisition of Santo Antônio do Jari and Cachoeira Caldeirão hydropower plants.

Improved Financial Performance

Adjusted EBITDA increased from 8.2% to 12.4%, with a 3.8% increase in adjusted net income.

Gender Diversity Advancement

The share of women in the company increased from 30% to 32%, and women in leadership positions increased from 34% to 38%.

Sustainability Recognition

Celebrated the 20th consecutive year as part of the Corporate Sustainability Index, ISE, achieving fourth place overall among 82 companies.

Innovative Financial Management

Engie Brasil executed a pioneering operation involving carbon credits to optimize its debt portfolio, a first in Brazil.

Negative Updates

Reduction in Gross Power Generation

Gross power generation decreased from 5.9 megawatts to 5.4 megawatts, primarily due to reduced hydropower plant contributions.

High Curtailment Levels

Curtailment reached 19%, attributed to critical events in the north of Brazil and transmission system limitations.

Decline in Solar Generation

Solar generation produced only BRL965 million, representing a 4% decrease in total generation.

Increased Debt and Leverage

Gross debt increased from BRL24.4 billion to BRL26.6 billion, with leverage rising to 3.5 times adjusted EBITDA.

Challenges with Green Hydrogen Projects

Development of green hydrogen projects was paused due to technological and financial feasibility challenges.

Company Guidance

Engie Brasil Energia provided comprehensive guidance during their Q1 2025 call, highlighting key financial and operational metrics. The company added over 900 MW to its portfolio, reaching almost 10 GW of installed capacity. They signed contracts to acquire Santo Antônio do Jari and Cachoeira Caldeirão hydropower plants, which will add 612 MW. Adjusted EBITDA increased by 12.4%, and net income rose by 3.8%. They declared BRL715 million in complementary dividends for 2024, with total profits distributed at BRL1.8 billion. The share of women in the workforce increased from 30% to 32%, while in leadership roles it decreased from 38% to 34%. Operationally, power generation decreased from 5.9 MW to 5.4 MW due to reduced hydropower output, but complementary sources doubled production. Curtailment increased to 19%, driven by critical events in the north. The company reached 1,800 clients and 980 consuming units, showing significant growth. Financially, net operational revenue grew 15%, with a notable contribution from transmission, and a balanced debt profile with a net debt of BRL20.6 billion. Capital expenditures for 2025 are projected at BRL7.1 billion, with investments in major projects like Asa Branca and Assurua. The presentation concluded with insights into the company's strategic direction and commitment to sustainability, including innovative financing through carbon credits.

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.