Southern Co (SO) AI Stock Analysis

• Market Cap: $100.98B
• Dividend Yield: 3.18%
• Average Volume (3M): 4.45M
• Price to Earnings (P/E): 23.7
• Beta (1Y): 0.06
• Revenue Growth: 8.53%
• EPS Growth: -7.53%
• Country: US
• Employees: 28,314
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Electric
• EPS (TTM): 0.92
• Shares Outstanding: 1,100,047,400
• 10 Day Avg. Volume: 4,975,888
• 30 Day Avg. Volume: 4,447,806
• PEG Ratio: 1.96
• Price to Book (P/B): 2.72
• Price to Sales (P/S): 3.38
• P/FCF Ratio: 108.31
• Enterprise Value/Market Cap: 1.73
• Enterprise Value/Revenue: 6.16
• Enterprise Value/Gross Profit: 12.61
• Enterprise Value/Ebitda: 12.77
• 1Y Price Target: $99.80
• Price Target Upside: 8.71% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11

• Rating: 66 Neutral
• Price Target: $99.00 ▲(7.84% Upside)

Southern Co's overall stock score is driven by strong financial performance and positive earnings call highlights, such as growth in retail electricity sales and strategic capital investments. However, high leverage, negative free cash flow, and increased operating costs present risks. The technical analysis indicates a neutral trend, and the valuation is moderate with a decent dividend yield.

Positive Factors

Revenue Growth

Consistent growth in retail electricity sales indicates strong demand and market position, supporting long-term revenue stability.

Capital Investment

The expanded capital plan demonstrates commitment to growth and infrastructure, potentially enhancing future earnings and market competitiveness.

Economic Development

Significant economic development in service territories suggests a supportive business environment and potential for increased demand.

Negative Factors

High Leverage

High leverage can limit financial flexibility and increase risk, potentially impacting long-term financial stability and investment capacity.

Negative Free Cash Flow

Negative free cash flow may constrain the company's ability to fund operations and investments without raising additional capital.

Earnings Decline

A decline in earnings compared to the previous year suggests potential challenges in maintaining profitability amid rising costs.

Southern Co Business Overview & Revenue Model

Company Description

The Southern Company, through its subsidiaries, engages in the generation, transmission, and distribution of electricity. It operates through Gas Distribution Operations, Gas Pipeline Investments, Wholesale Gas Services, and Gas Marketing Services segments. The company also develops, constructs, acquires, owns, and manages power generation assets, including renewable energy projects and sells electricity in the wholesale market; and distributes natural gas in Illinois, Georgia, Virginia, and Tennessee, as well as provides gas marketing services, wholesale gas services, and gas pipeline investments operations. In addition, it owns and/or operates 30 hydroelectric generating stations, 24 fossil fuel generating stations, three nuclear generating stations, 13 combined cycle/cogeneration stations, 45 solar facilities, 15 wind facilities, one fuel cell facility, and four battery storage facility; and constructs, operates, and maintains 76,289 miles of natural gas pipelines and 14 storage facilities with total capacity of 157 Bcf to provide natural gas to residential, commercial, and industrial customers. The company serves approximately 8.7 million electric and gas utility customers. Further, the company offers digital wireless communications and fiber optics services. The Southern Company was incorporated in 1945 and is headquartered in Atlanta, Georgia.

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's revenue model is largely based on regulated utility operations, where it earns a return on investment approved by state utility commissions. Key revenue streams include retail electricity sales, natural gas distribution services, and long-term contracts for energy generation. Additionally, Southern Company invests in renewable energy projects and may receive incentives or subsidies for clean energy initiatives. The company has established partnerships with various energy firms and governmental bodies to enhance its service offerings and expand its renewable energy portfolio, further contributing to its earnings.

Southern Co Financial Statement Overview

Summary

Southern Co demonstrates solid revenue growth with a strong net profit margin of 16.5% and effective operational efficiency. However, the high leverage and negative free cash flow due to significant capital expenditures are concerns, indicating a need for careful cash flow 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	28.36B	26.72B	25.25B	29.28B	23.11B	20.38B
Gross Profit	13.85B	13.34B	11.71B	10.63B	10.25B	9.90B
EBITDA	13.68B	13.24B	11.78B	10.31B	8.39B	9.22B
Net Income	4.28B	4.40B	3.98B	3.54B	2.41B	3.13B
Balance Sheet
Total Assets	148.85B	145.18B	139.33B	134.89B	127.53B	122.94B
Cash, Cash Equivalents and Short-Term Investments	1.26B	1.07B	748.00M	1.92B	1.80B	1.06B
Total Debt	70.82B	66.28B	63.49B	59.13B	55.47B	51.04B
Total Liabilities	111.51B	108.51B	104.11B	100.36B	94.97B	90.41B
Stockholders Equity	34.01B	33.21B	31.44B	30.41B	28.16B	28.26B
Cash Flow
Free Cash Flow	-1.08B	833.00M	-1.54B	-1.62B	-1.07B	-745.00M
Operating Cash Flow	9.22B	9.79B	7.55B	6.30B	6.17B	6.70B
Investing Cash Flow	-10.91B	-9.40B	-9.67B	-8.43B	-7.35B	-7.03B
Financing Cash Flow	1.75B	-208.00M	999.00M	2.34B	1.95B	-576.00M

Southern Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 91.80
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 91.8 is below the 20-day moving average (MA) of 92.12, below the 50-day MA of 93.10, and above the 200-day MA of 87.99, indicating a neutral trend. The MACD of -0.40 indicates Positive momentum. The RSI at 45.74 is Neutral, neither overbought nor oversold. The STOCH value of 58.55 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
D	75 Outperform	51.08B	20.68	8.39%	4.46%	7.60%	55.99%
AEP	74 Outperform	57.26B	15.68	12.22%	3.47%	5.84%	36.33%
DUK	71 Outperform	94.15B	19.80	9.50%	3.47%	4.07%	9.94%
NEE	68 Neutral	146.37B	24.77	11.65%	3.12%	18.80%	-6.73%
SO	66 Neutral	$100.98B	23.70	12.89%	3.18%	8.53%	-7.53%
EXC	66 Neutral	43.84B	16.48	9.61%	3.64%	4.46%	8.68%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%

Southern Co Corporate Events

Southern Co Adjusts Conversion Rate for Notes

On September 15, 2025, Southern Co announced an adjustment to the conversion rate for its Series 2023A 3.875% Convertible Senior Notes due December 15, 2025. This adjustment was necessary as the company had declared six regular quarterly cash dividends exceeding the distribution threshold, and no prior adjustments were made since each required less than a one percent increase. The new conversion rate is set at 11.9035 shares per $1,000 principal amount of the notes, reflecting the cumulative effect of previously deferred adjustments.

The most recent analyst rating on (SO) stock is a Hold with a $99.00 price target. To see the full list of analyst forecasts on Southern Co stock, see the SO Stock Forecast page.