Southern Co (SO) AI Stock Analysis

• Market Cap: $98.15B
• Dividend Yield: 3.28%
• Average Volume (3M): 5.16M
• Price to Earnings (P/E): 21.4
• Beta (1Y): 0.09
• Revenue Growth: 9.58%
• EPS Growth: 8.02%
• Country: US
• Employees: 28,314
• Sector: Utilities
• Sector Strength: 78
• Industry: Regulated Electric
• EPS (TTM): 1.23
• Shares Outstanding: 1,099,055,000
• 10 Day Avg. Volume: 5,402,501
• 30 Day Avg. Volume: 5,163,655
• PEG Ratio: 0.48
• Price to Book (P/B): 2.52
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -47.36
• Enterprise Value/Market Cap: 1.15
• Enterprise Value/Revenue: 1.06
• Enterprise Value/Gross Profit: 8.96
• Enterprise Value/Ebitda: 2.15
• 1Y Price Target: $94.92
• Price Target Upside: 6.00% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 12

• Rating: 69 Neutral
• Price Target: $98.00 ▲(9.44%Upside)

Southern Co's overall stock score is driven by solid financial performance and a positive outlook from the latest earnings call. While technical indicators and valuation are moderate, the company's strategic investments and dividend growth bolster confidence despite cash flow challenges and potential tariff impacts.

Positive Factors

Financial Performance

SO beat in Q1 driven by regulated investments and favorable weather, indicating strong financial performance.

Growth Prospects

Strong load growth remains, with data centers load increasing 11% YoY in Q1, indicating continued demand.

Regulatory Developments

Regulatory certainty secured via rate case settlement and financing already underway, execution risk diminishes while earnings power expands post-'27.

Negative Factors

Financial Risks

Earnings below the lower limit of 9.5% ROE would have no recovery, indicating potential financial risk if performance targets are not met.

Operational Costs

Earnings performance was offset by higher operating and maintenance expense, higher depreciation and amortization expense, and higher interest expense.

Renewable Energy Strategy

Limited role of new nuclear - 112 MW of uprates, no new nuclear before 2037.

Southern Co Business Overview & Revenue Model

Company Description

Southern Company (SO) is a prominent American energy company headquartered in Atlanta, Georgia. It operates in the utilities sector, primarily focusing on the generation, transmission, and distribution of electricity. Southern Company serves millions of customers across the southeastern United States through its subsidiaries, which include Alabama Power, Georgia Power, Mississippi Power, and Southern Power. The company is also involved in natural gas distribution and has investments in renewable energy sources, reflecting its commitment to sustainable energy solutions.

How the Company Makes Money

Southern Company generates revenue primarily through the sale of electricity and natural gas to residential, commercial, and industrial customers. The company operates under a regulated utility model, where it earns a return on its investments in infrastructure and services as approved by state regulatory commissions. Key revenue streams include electricity sales from its subsidiaries like Alabama Power and Georgia Power, which operate under state-regulated rates. Additionally, Southern Company earns income from its natural gas distribution operations and investments in renewable energy projects, including solar and wind farms. Strategic partnerships and long-term contracts with industrial and wholesale customers also contribute to its earnings.

Southern Co Financial Statement Overview

Summary

Southern Co demonstrates solid revenue growth and profitability with a net profit margin of 16.5% and robust operating efficiency. However, high leverage and negative free cash flow due to capital expenditures highlight the need for careful cash management.

Income Statement

Southern Co exhibits solid revenue growth with a 4.2% increase in TTM compared to the previous annual figure. The gross profit margin stands at 45.4% TTM, indicating strong profitability. The net profit margin of 16.5% TTM is robust, and both EBIT and EBITDA margins reflect operational efficiency at 26.4% and 48.7% respectively. Overall, the company demonstrates stable profitability and efficient operations, although gross profit has slightly decreased compared to the previous year.

Balance Sheet

The balance sheet shows a debt-to-equity ratio of 2.07, indicating a high leverage level typical in the regulated electric industry. The return on equity is healthy at 13.6% TTM, reflecting effective use of shareholders' capital. The equity ratio of 22.8% suggests a moderate reliance on equity financing. While leverage is high, the company maintains a stable equity base and good returns for shareholders.

Cash Flow

Operating cash flow remains strong at $9.73 billion TTM, although free cash flow is negative at -$39 million, mainly due to high capital expenditures. The operating cash flow to net income ratio is solid at 2.11, indicating good cash conversion from earnings. However, the decline in free cash flow growth is a concern, necessitating careful management of capital expenditures to improve cash generation.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
27.85B	26.72B	25.25B	29.28B	23.11B	20.38B
	Gross Profit
12.65B	13.34B	11.71B	10.82B	10.06B	9.90B
	EBIT
7.35B	7.07B	5.83B	5.37B	3.70B	4.88B
	EBITDA
13.58B	13.20B	11.74B	9.97B	8.31B	9.20B
	Net Income Common Stockholders
4.61B	4.40B	3.98B	3.54B	2.41B	3.13B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.33B	1.07B	748.00M	1.92B	1.80B	1.06B
	Total Assets
148.11B	145.18B	139.33B	134.89B	127.53B	122.94B
	Total Debt
70.12B	66.28B	63.49B	59.13B	55.47B	51.04B
	Net Debt
67.79B	65.21B	62.74B	57.22B	53.67B	49.98B
	Total Liabilities
110.89B	108.51B	104.11B	100.36B	94.97B	90.41B
	Stockholders Equity
33.84B	33.21B	31.44B	30.41B	28.16B	28.26B
Cash Flow		Free Cash Flow
-39.00M	833.00M	-1.54B	-1.62B	-1.07B	-745.00M
	Operating Cash Flow
9.73B	9.79B	7.55B	6.30B	6.17B	6.70B
	Investing Cash Flow
-9.86B	-9.40B	-9.67B	-8.43B	-7.35B	-7.03B
	Financing Cash Flow
1.63B	-208.00M	999.00M	2.34B	1.95B	-576.00M

Southern Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 89.55
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SO, the sentiment is Positive. The current price of 89.55 is above the 20-day moving average (MA) of 88.80, above the 50-day MA of 89.26, and above the 200-day MA of 86.68, indicating a bullish trend. The MACD of -0.02 indicates Negative momentum. The RSI at 52.65 is Neutral, neither overbought nor oversold. The STOCH value of 63.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SO.

Southern Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NEE	78 Outperform	$149.89B	27.23	11.19%	3.11%	20.35%	-27.07%
D	75 Outperform	$47.42B	20.86	8.22%	4.80%	3.62%	40.33%
DUK	72 Outperform	$90.42B	19.40	9.48%	3.59%	5.02%	45.08%
AEP	70 Outperform	$54.42B	19.65	10.41%	3.65%	4.20%	-3.64%
SO	69 Neutral	$98.15B	21.41	14.01%	3.28%	9.58%	8.02%
EXC	69 Neutral	$43.33B	15.92	10.10%	3.73%	6.71%	16.09%
Sector *	64 Neutral	$8.54B	10.40	4.24%	4.63%	4.14%	-13.05%

Southern Co Corporate Events

Southern Co Confirms Board and Approves Key Amendments

On May 21, 2025, Southern Company held its Annual Meeting of Stockholders, where several key decisions were made. The election of the Board of Directors was confirmed, with all nominees receiving a majority of votes. Additionally, the stockholders approved the compensation for named executive officers and the appointment of Deloitte & Touche LLP as the independent registered public accounting firm for 2025. An amendment to the company’s Restated Certificate of Incorporation was also approved, reducing the supermajority vote requirement to a majority vote. However, several stockholder proposals, including those concerning a simple majority vote, fossil fuel reliance, a net zero audit, and workforce civil liberties, were not approved.

The most recent analyst rating on (SO) stock is a Buy with a $96.00 price target. To see the full list of analyst forecasts on Southern Co stock, see the SO Stock Forecast page.

Southern Co Issues $1.65 Billion Convertible Notes

On May 23, 2025, Southern Company issued $1.65 billion in Series 2025A 3.25% Convertible Senior Notes, maturing on June 15, 2028. These notes are unsecured and unsubordinated, with conversion options tied to the company’s stock performance and specific corporate events, potentially impacting the company’s financial strategy and market positioning.

The most recent analyst rating on (SO) stock is a Buy with a $96.00 price target. To see the full list of analyst forecasts on Southern Co stock, see the SO Stock Forecast page.

Southern Co Upsizes $1.45B Convertible Notes Offering

On May 20, 2025, Southern Company announced the upsize and pricing of a $1.45 billion offering of its Series 2025A 3.25% Convertible Senior Notes, due June 15, 2028, in a private placement to qualified institutional buyers. The offering, which was increased by $200 million from the previously announced size, is expected to close on May 23, 2025. The company plans to use approximately $1.25 billion of the net proceeds to repurchase existing convertible senior notes and the remainder for general corporate purposes. This move is part of Southern Company’s strategy to manage its debt portfolio and optimize its capital structure, potentially impacting its stock market dynamics and stakeholder interests.

The most recent analyst rating on (SO) stock is a Buy with a $96.00 price target. To see the full list of analyst forecasts on Southern Co stock, see the SO Stock Forecast page.

Southern Co Announces $1.25 Billion Note Offering

On May 20, 2025, Southern Company announced a private offering of $1.25 billion in convertible senior notes due June 15, 2028, with an option for initial purchasers to buy an additional $200 million. The proceeds are intended for repurchasing existing convertible notes and repaying commercial paper borrowings. This move is expected to impact the company’s stock market activity and conversion pricing, potentially affecting its market positioning.

The most recent analyst rating on (SO) stock is a Buy with a $96.00 price target. To see the full list of analyst forecasts on Southern Co stock, see the SO Stock Forecast page.

Georgia Power Reaches Settlement on Rate Plan Extension

On May 19, 2025, Georgia Power and the Georgia Public Service Commission’s Public Interest Advocacy Staff reached a settlement agreement to extend the alternate rate plan through December 31, 2028. The agreement, pending approval, would maintain current base rates and retail return on equity, while addressing storm damage costs and regulatory asset amortization. The outcome of this agreement could impact Georgia Power’s financial operations and customer rates, with the Georgia PSC scheduled to vote by July 1, 2025.

The most recent analyst rating on (SO) stock is a Buy with a $96.00 price target. To see the full list of analyst forecasts on Southern Co stock, see the SO Stock Forecast page.