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Equatorial Energia SA (EQUEY)
OTHER OTC:EQUEY
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Equatorial Energia SA
(OTC:EQUEY)
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Rating:70Outperform
Price Target:
$7.50
▲(10.46% Upside)
Equatorial Energia SA's overall stock score reflects its solid financial performance, reasonable valuation, and neutral technical indicators. The company's strong profitability and consistent revenue growth are significant strengths, but high leverage and declining free cash flow growth present potential risks. The technical analysis suggests a neutral market sentiment, while the valuation indicates the stock is fairly priced with a modest dividend yield.
Equatorial Energia SA (EQUEY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.33B
Dividend Yield2.07%
Average Volume (3M)339.00
Price to Earnings (P/E)12.8
Beta (1Y)0.02
Revenue Growth2.96%
EPS Growth35.76%
CountryUS
Employees11,123
SectorUtilities
Sector Strength65
IndustryRegulated Electric
Share Statistics
EPS (TTM)0.15
Shares Outstanding1,255,505,000
10 Day Avg. Volume236
30 Day Avg. Volume339
Financial Highlights & Ratios
PEG Ratio0.44
Price to Book (P/B)1.19
Price to Sales (P/S)0.72
P/FCF Ratio7.40
Enterprise Value/Market Cap2.10
Enterprise Value/Revenue0.37
Enterprise Value/Gross Profit1.58
Enterprise Value/Ebitda1.37
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusHold
Number of Analyst Covering0
Equatorial Energia SA Business Overview & Revenue Model
Company DescriptionEquatorial Energia S.A., through its subsidiaries, generates, transmits, and distributes electricity in Brazil. It operates through Energy Distribution, Transmission, Renewables, Distributed Generation, Sanitation, Energy Trading, Telecommunications, and Services segments. The company distributes electric energy in the 217 municipalities of Maranhão State with a concession area of approximately 332,000 square kilometers serving approximately 2.5 million consumers; 144 municipalities of Pará State with a concession area covering 1,248,000 square kilometers serving approximately 2.6 million consumers; 224 municipalities of Piauí State with a concession area covering 251,000 square kilometers serving approximately 1.3 million consumers; 102 municipalities of Alagoas State with a concession area covering 27,848 square kilometers serving approximately 1.2 million consumers; 16 municipalities of Amapá State serving approximately 209,000 consumers; and 72 municipalities of Rio de Janeiro State serving approximately 1.8 million consumers. It is also involved in the electricity trading business, as well as telecommunication, services, energy, and sanitation business. The company was founded in 1958 and is based in Brasília, Brazil.
How the Company Makes MoneyEquatorial Energia generates revenue through multiple streams, primarily from the distribution and sale of electricity. The company operates a network of electricity distribution companies, serving millions of consumers in Brazil. Revenue is largely derived from tariffs set by regulatory bodies, which allow the company to charge customers for the electricity consumed. Additionally, Equatorial Energia engages in power generation, selling electricity produced from its facilities to the national grid or directly to large consumers and other distributors. Significant partnerships with local governments and energy regulators also play a crucial role in ensuring stable revenue flows, as they help secure long-term contracts and favorable operating conditions. The company's investments in renewable energy projects further enhance its revenue potential while aligning with global trends toward sustainable energy solutions.
Equatorial Energia SA Earnings Call Summary
Earnings Call Date:Aug 13, 2025
(Q3-2024)
| % Change Since: |
Next Earnings Date:Nov 12, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong financial and operational performance with significant growth in various segments, particularly in energy distribution and renewables. However, there are challenges with increased debt due to recent acquisitions and some impact on the transmission segment. The positive aspects, including robust EBITDA growth and successful capital raising, outweigh the negatives.Q3-2024 Updates
Positive Updates
Capital Increase and Subscription Success
Approved a capital increase via private subscription totaling BRL 2.5 billion, successfully completed with 100% subscription in the first round.
Strong Operating Performance in Energy Distribution
Distributed energy showed significant growth, up 6.7% above Q3 '23, maintaining good collection levels and cost discipline.
Adjusted EBITDA Growth
Achieved an adjusted EBITDA of BRL 2.9 billion, up 16% compared to the same quarter last year.
Improvement in Distribution Segment
Gross margin for distribution grew by 15.3%, with adjusted EBITDA increasing by 20.8%.
Renewables Segment Growth
Adjusted EBITDA grew by 11.7% due to the start-up of new solar farms and surplus generation from wind farms.
Sanitation Segment Progress
Positive EBITDA of BRL 1.3 million with a significant increase in billed sewage savings and water coverage index.
Negative Updates
Debt Increase Due to SABESP Acquisition
Company's net debt increased by about BRL 4.4 billion due to the acquisition of a 15% stake in SABESP.
Transmission Segment Challenges
Adjusted regulatory EBITDA fell by 2.6%, although it would have grown by 2.4% after adjusting for a complementary AVC effect.
Renewables Curtailment Impact
Constraint of impact of 318-megawatt average, 36.2% of total generation, affecting the Serra do Mel wind farm complex.
Company Guidance
In the Q3 2024 earnings call for Equatorial (EQTL3.SA), the company reported a range of financial metrics and strategic developments. They announced a successful capital increase of BRL 2.5 billion, priced at BRL 32.50 per share, with full subscription in the first round. The company utilized these funds for partial repayment of commercial notes and issued incentivized debentures amounting to BRL 2.07 billion, optimizing their debt profile. Operating metrics included a 6.7% year-over-year growth in distributed energy and a fourth consecutive quarter with distribution volumes below the regulatory loss limit. Financially, Equatorial achieved a 16% increase in adjusted EBITDA, reaching BRL 2.9 billion, and a 25.4% rise in adjusted net profit compared to Q3 2023. Their net debt EBITDA ratio was maintained at 3.2x, with cash and cash equivalents totaling BRL 10.8 billion, offering a cash to short-term debt ratio of 2x. The company also highlighted a 20% reduction in investments due to the start-up of solar parks, while projecting continued financial discipline and strategic investment opportunities.Equatorial Energia SA Financial Statement Overview
Summary
Equatorial Energia SA demonstrates solid financial performance with consistent revenue growth and strong profitability margins. However, the high leverage and recent decline in free cash flow growth could pose risks. The company should focus on managing its debt levels and improving cash flow generation to sustain its growth trajectory.Income Statement
Equatorial Energia SA has shown consistent revenue growth with a 3.6% increase in the TTM period. The company maintains solid profitability with a gross profit margin of 24.5% and a net profit margin of 6.9%. EBIT and EBITDA margins are strong at 19.7% and 26.1%, respectively, indicating efficient operations. However, the net profit margin has slightly decreased compared to previous years, which could be a concern if the trend continues.78
Positive
Balance Sheet
The company's debt-to-equity ratio is relatively high at 2.04, suggesting significant leverage, which could pose risks if interest rates rise. However, the return on equity is healthy at 12.2%, indicating effective use of equity capital. The equity ratio stands at 24%, reflecting a moderate level of equity financing relative to total assets.70
Positive
Cash Flow
Free cash flow has decreased by 13.3% in the TTM period, which is a concern for future investments and debt servicing. The operating cash flow to net income ratio is 0.22, indicating that cash generation is lower relative to net income. However, the free cash flow to net income ratio is strong at 1.24, suggesting that the company is generating sufficient free cash flow relative to its net income.65
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 46.87B | 43.17B | 40.99B | 26.22B | 23.61B | 17.37B |
| Gross Profit | 11.07B | 10.86B | 10.23B | 7.65B | 6.27B | 5.47B |
| EBITDA | 12.73B | 11.00B | 9.72B | 7.17B | 6.21B | 5.92B |
| Net Income | 3.65B | 2.81B | 2.08B | 1.37B | 3.69B | 2.98B |
Balance Sheet | ||||||
| Total Assets | 116.70B | 116.41B | 103.64B | 90.62B | 61.71B | 44.12B |
| Cash, Cash Equivalents and Short-Term Investments | 9.41B | 13.04B | 12.24B | 7.88B | 10.37B | 7.62B |
| Total Debt | 55.21B | 55.93B | 46.56B | 41.30B | 25.46B | 17.82B |
| Total Liabilities | 84.59B | 86.52B | 78.36B | 72.05B | 47.11B | 31.85B |
| Stockholders Equity | 28.00B | 26.11B | 21.09B | 16.61B | 12.76B | 10.46B |
Cash Flow | ||||||
| Free Cash Flow | 5.06B | 4.21B | -6.01B | 3.23B | 330.16M | 3.47B |
| Operating Cash Flow | 5.06B | 4.25B | 3.14B | 3.47B | 1.30B | 3.48B |
| Investing Cash Flow | -12.56B | -14.19B | -7.49B | -8.74B | -4.74B | -2.44B |
| Financing Cash Flow | 7.00B | 8.63B | 5.80B | 5.44B | 4.21B | -608.28M |
Equatorial Energia SA Technical Analysis
Positive
6.79
Price Trends
6.70
Positive
6.58
Positive
6.14
Positive
Market Momentum
-0.03
Negative
52.06
Neutral
64.37
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EQUEY, the sentiment is Positive. The current price of 6.79 is above the 20-day moving average (MA) of 6.60, above the 50-day MA of 6.70, and above the 200-day MA of 6.14, indicating a bullish trend. The MACD of -0.03 indicates Negative momentum. The RSI at 52.06 is Neutral, neither overbought nor oversold. The STOCH value of 64.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EQUEY.
Equatorial Energia SA Peers Comparison
UnderperformOutperform
Sector (66)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
| ― | $24.40B | 21.27 | 6.01% | 6.10% | 6.41% | 37.23% | |
| ― | $24.40B | 19.84 | 6.01% | 5.93% | 6.41% | 37.23% | |
| ― | $2.50B | 14.72 | 9.38% | 2.17% | -9.20% | -53.99% | |
| ― | $8.33B | 12.82 | 13.91% | 2.07% | 2.96% | 35.76% | |
| ― | $1.63B | 5.64 | 21.45% | ― | 11.85% | ― | |
| ― | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
| ― | $5.29B | 78.09 | 1.30% | 5.81% | -25.78% | -91.93% |
* Utilities Sector Average
EQUEY
Equatorial Energia SA
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16.43%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.