Zespol Elektrocieplowni Wroclawskich KOGENERACJA S.A. (KGN) AI Stock Analysis

• Market Cap: €865.69M
• Dividend Yield: N/A
• Average Volume (3M): 2.48K
• Price to Earnings (P/E): 4.7
• Beta (1Y): 0.69
• Revenue Growth: -6.88%
• EPS Growth: -6.00%
• Country: PL
• Employees: 536
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Electric
• EPS (TTM): 1.50
• Shares Outstanding: 14,900,000
• 10 Day Avg. Volume: 2,188
• 30 Day Avg. Volume: 2,485
• PEG Ratio: -0.18
• Price to Book (P/B): 0.32
• Price to Sales (P/S): 0.29
• P/FCF Ratio: 1.22
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €64.13
• Price Target Upside: 10.38% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 71 Outperform
• Price Target: zł64.00 ▲(10.15% Upside)

The stock's overall score is driven by its strong valuation, indicating potential undervaluation, and solid financial performance with robust cash flow and low debt levels. However, the neutral technical indicators and recent revenue decline slightly temper the score.

Zespol Elektrocieplowni Wroclawskich KOGENERACJA S.A. Business Overview & Revenue Model

Company Description

Zespól Elektrocieplowni Wroclawskich KOGENERACJA S.A. engages in the production of electricity and heat in Poland. The company is also involved in the wholesale and retail sale of electricity, heat, and power industry products and services. It operates three production plants, including the Wroclaw, Czechnica, and Zawidawie heat and power plants located in Wroclaw with a total electric capacity of 365.7 megawatts; and a total thermal capacity of 1,080.4 MW. The company is based in Wroclaw, Poland. Zespól Elektrocieplowni Wroclawskich KOGENERACJA S.A. is a subsidiary of PGE Energia Ciepla S.A.

How the Company Makes Money

KGN primarily generates revenue through the sale of electricity and thermal energy. Its revenue model is based on long-term contracts and agreements with local municipalities and businesses, ensuring a steady demand for its products. The company benefits from regulatory frameworks that support cogeneration technologies, allowing it to receive subsidies and incentives for producing energy efficiently. Additionally, KGN engages in maintenance and operational services for its energy production facilities, further diversifying its income streams. Strategic partnerships with other energy providers and technology firms enhance its operational capabilities, contributing to its profitability.

Zespol Elektrocieplowni Wroclawskich KOGENERACJA S.A. Financial Statement Overview

Summary

The company shows solid financial health with strong cash flow generation and a stable balance sheet. Despite a recent decline in revenue, it maintains healthy profit margins. The low debt levels reduce financial risk, but the drop in gross profit margin and revenue growth rate warrants attention to sustain long-term profitability.

Income Statement

The income statement shows a decline in revenue growth rate by 7.53% in the latest year, indicating a potential challenge in maintaining sales momentum. However, the company maintains a healthy EBIT margin of 10.04% and a net profit margin of 7.89%, suggesting operational efficiency. The gross profit margin has decreased significantly from previous years, which could impact future profitability if not addressed.

Balance Sheet

The balance sheet reflects a strong equity position with a debt-to-equity ratio of 0.19, indicating low financial leverage and reduced risk from debt obligations. The return on equity stands at 8.63%, which is moderate but shows room for improvement. The equity ratio of 49.39% suggests a stable financial structure with a substantial portion of assets funded by equity.

Cash Flow

Cash flow analysis reveals a robust free cash flow growth rate of 47.53%, highlighting strong cash generation capabilities. The operating cash flow to net income ratio of 0.50 indicates efficient conversion of income into cash. However, the free cash flow to net income ratio of 0.68 suggests that not all earnings are translating into free cash flow, which could be a concern if it persists.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.58B	2.56B	3.16B	1.81B	1.43B	1.18B
Gross Profit	287.42M	331.35M	993.27M	269.70M	143.39M	140.24M
EBITDA	438.32M	484.59M	536.02M	389.73M	253.65M	322.24M
Net Income	183.92M	201.75M	255.70M	149.53M	56.25M	123.94M
Balance Sheet
Total Assets	4.21B	4.73B	4.72B	3.53B	3.21B	2.85B
Cash, Cash Equivalents and Short-Term Investments	23.91M	31.63M	34.28M	5.17M	21.92M	14.08M
Total Debt	419.75M	437.93M	433.57M	112.43M	57.97M	58.24M
Total Liabilities	1.72B	2.39B	2.58B	1.64B	1.46B	1.17B
Stockholders Equity	2.49B	2.34B	2.14B	1.88B	1.74B	1.68B
Cash Flow
Free Cash Flow	462.09M	613.76M	26.49M	-122.98M	5.70M	-10.66M
Operating Cash Flow	740.41M	850.72M	611.91M	425.56M	328.19M	154.39M
Investing Cash Flow	-436.66M	-371.38M	-917.53M	-629.69M	-321.87M	-162.04M
Financing Cash Flow	-290.99M	-481.99M	334.73M	187.38M	1.52M	5.54M

Zespol Elektrocieplowni Wroclawskich KOGENERACJA S.A. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 58.10
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PL:KGN, the sentiment is Negative. The current price of 58.1 is above the 20-day moving average (MA) of 57.41, below the 50-day MA of 58.49, and above the 200-day MA of 54.72, indicating a neutral trend. The MACD of -0.17 indicates Negative momentum. The RSI at 42.70 is Neutral, neither overbought nor oversold. The STOCH value of 54.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PL:KGN.

Zespol Elektrocieplowni Wroclawskich KOGENERACJA S.A. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KGN	71 Outperform	€865.69M	4.71	7.76%	―	-6.88%	-6.00%
ZEP	71 Outperform	zł1.22B	4.81	12.10%	―	-20.30%	-74.56%
ENG	67 Neutral	zł6.13B	19.96	2.03%	―	0.32%	685.59%
ENA	64 Neutral	zł9.36B	8.99	9.12%	2.83%	-23.28%	-39.53%
TPE	64 Neutral	zł15.19B	4.36	3.30%	―	-8.68%	―
PGE	46 Neutral	zł24.08B	-1.95	-7.11%	―	-17.42%	-144.01%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%