TXNM Energy (TXNM) AI Stock Analysis

• Market Cap: $5.22B
• Dividend Yield: 2.89%
• Average Volume (3M): 1.46M
• Price to Earnings (P/E): 25.0
• Beta (1Y): 0.12
• Revenue Growth: 10.10%
• EPS Growth: 149.78%
• Country: US
• Employees: 1,695
• Sector: Utilities
• Sector Strength: 67
• Industry: Regulated Electric
• EPS (TTM): 0.19
• Shares Outstanding: 92,659,330
• 10 Day Avg. Volume: 1,658,156
• 30 Day Avg. Volume: 1,456,465
• PEG Ratio: -1.82
• Price to Book (P/B): 1.91
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -12.17
• Enterprise Value/Market Cap: 1.64
• Enterprise Value/Revenue: 1.13
• Enterprise Value/Gross Profit: 6.62
• Enterprise Value/Ebitda: 2.86
• 1Y Price Target: $59.05
• Price Target Upside: 4.85% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

• Rating: 58 Neutral
• Price Target: $62.00 ▲(10.09%Upside)

TXNM Energy's overall score reflects strong profitability growth and strategic investments, balanced by the challenges of high leverage and negative cash flow. Technical indicators show stability, while recent corporate events like the acquisition and rate approvals improve the outlook. Valuation remains fair, presenting a balanced investment opportunity with moderate risks and potential for long-term growth.

Positive Factors

Earnings Growth

The growth outlook is solid with a bullish EPS growth expectation of 7-9%.

Rate Case Settlement

The New Mexico rate case settlement signifies improving relations and smoother regulatory processes for TXNM.

Regulatory Success

TXNM's regulatory success is highlighted as a key driver of growth.

Negative Factors

Credit Pressures

Credit pressures likely remain with ESA costs in base rates, indicating potential financial challenges.

Equity Needs

Equity needs for the company increased to $1.3B in the 2025-29 period to support the $7.8B capex plan.

Wildfire Risk

Wildfire risk is acknowledged as an obstacle to achieving a higher valuation.

TXNM Energy Business Overview & Revenue Model

Company Description

TXNM Energy (TXNM) is a prominent player in the energy sector, focusing on the exploration, production, and distribution of renewable energy resources. The company primarily operates within the solar and wind energy markets, providing sustainable energy solutions to both residential and commercial customers. TXNM Energy is committed to driving innovation and sustainability in the energy industry through its advanced technology and environmentally-friendly practices.

How the Company Makes Money

TXNM Energy generates revenue through multiple streams, primarily from the sale of electricity generated by its solar and wind farms. The company enters into power purchase agreements (PPAs) with utilities and large organizations, ensuring a steady flow of income over long-term contracts. Additionally, TXNM Energy offers installation and maintenance services for solar panels and wind turbines, providing an additional revenue stream. Strategic partnerships with technology firms and government incentives for renewable energy projects also contribute to the company's financial success.

TXNM Energy Financial Statement Overview

Summary

TXNM Energy demonstrates strong profitability improvements, evidenced by enhanced margins and return on equity. However, high leverage poses a risk, and consistent negative free cash flow signals ongoing cash management challenges. The company needs to focus on strengthening its balance sheet and improving cash flow sustainability.

Income Statement

TXNM Energy shows a strong gross profit margin, improving from 53.9% in 2023 to 65.6% in 2024. The net profit margin increased significantly from 4.6% to 12.3%, indicating enhanced profitability. Revenue growth was modest at 1.65% from 2023 to 2024, following a decline in prior years. EBIT and EBITDA margins improved, reflecting operational efficiency gains.

Balance Sheet

The debt-to-equity ratio remains high at 2.28 in 2024, indicating considerable leverage. However, the return on equity improved to 9.5%, suggesting better utilization of equity. The equity ratio stands at 22.7%, reflecting a moderate level of financial stability, though leverage remains a concern.

Cash Flow

Free cash flow remains negative, although the operating cash flow to net income ratio is strong at 2.09. The free cash flow to net income ratio is negative, highlighting cash flow challenges despite operational improvements.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.97B	1.94B	2.25B	1.78B	1.52B
Gross Profit	1.29B	1.05B	1.11B	991.09M	937.79M
EBITDA	929.21M	634.58M	682.44M	663.84M	639.95M
Net Income	242.68M	88.35M	170.06M	196.36M	173.30M
Balance Sheet
Total Assets	11.21B	10.25B	9.26B	8.67B	7.94B
Cash, Cash Equivalents and Short-Term Investments	4.50M	2.21M	4.08M	1.10M	47.93M
Total Debt	5.80B	4.96B	4.37B	3.84B	3.44B
Total Liabilities	8.62B	7.84B	7.00B	6.43B	5.82B
Stockholders Equity	2.55B	2.36B	2.20B	2.18B	2.06B
Cash Flow
Free Cash Flow	-738.88M	-524.64M	-345.27M	-387.14M	-193.33M
Operating Cash Flow	508.16M	551.17M	567.28M	547.87M	485.70M
Investing Cash Flow	-1.17B	-1.09B	-950.35M	-952.26M	-733.80M
Financing Cash Flow	684.35M	537.10M	386.04M	357.56M	292.19M

TXNM Energy Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 56.32
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TXNM, the sentiment is Positive. The current price of 56.32 is below the 20-day moving average (MA) of 56.48, above the 50-day MA of 55.34, and above the 200-day MA of 49.49, indicating a neutral trend. The MACD of 0.22 indicates Positive momentum. The RSI at 54.02 is Neutral, neither overbought nor oversold. The STOCH value of 18.58 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TXNM.

TXNM Energy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IDA	67 Neutral	$6.27B	20.56	9.60%	2.96%	1.63%	13.11%
IDA	67 Neutral	$6.27B	20.56	9.60%	2.96%	1.63%	13.11%
Sector *	67 Neutral	$16.53B	17.14	4.45%	3.53%	4.76%	6.13%
CEPU	63 Neutral	$1.75B	17.88	5.84%	3.14%	-9.99%	-73.66%
CEPU	63 Neutral	$1.75B	17.88	5.84%	3.14%	-9.99%	-73.66%
POR	61 Neutral	$4.48B	14.32	8.33%	5.09%	11.83%	9.53%
POR	61 Neutral	$4.48B	14.32	8.33%	5.09%	11.83%	9.53%
TXNM	58 Neutral	$5.22B	25.05	8.37%	2.89%	10.10%	149.78%
ENIC	58 Neutral	$5.09B	27.87	3.67%	0.55%	-12.73%	-74.65%
ENIC	58 Neutral	$5.09B	27.87	3.67%	0.55%	-12.73%	-74.65%
OKLO	42 Neutral	$7.85B	―	-20.99%	―	―	-2747.57%

TXNM Energy Corporate Events

TXNM Energy Enters Stock Purchase Agreement with Zimmer

On June 24, 2025, TXNM Energy entered into a Stock Purchase Agreement with Zimmer Partners and other purchasers to issue 3,615,003 shares of common stock for approximately $200 million. The proceeds will be used for general corporate purposes. The agreement includes provisions for voting on a merger with Troy ParentCo LLC, making TXNM a wholly-owned subsidiary of Blackstone Infrastructure Partners’ affiliate. The shares will be listed on the NYSE, and there are restrictions on their sale until August 15, 2025.

The most recent analyst rating on (TXNM) stock is a Hold with a $46.00 price target. To see the full list of analyst forecasts on TXNM Energy stock, see the TXNM Stock Forecast page.

TXNM Energy Completes Bond Prepayment Offer

On June 14, 2025, Texas-New Mexico Power Company (TNMP) concluded its offer to prepay $1,505,000,000 in First Mortgage Bonds, which was initially announced on May 19, 2025. The offer resulted in $1,084,300,000 worth of bonds being validly tendered and accepted for purchase, with holders receiving the full principal amount plus accrued interest, impacting TNMP’s financial operations by reducing its outstanding bond liabilities.

The most recent analyst rating on (TXNM) stock is a Hold with a $45.00 price target. To see the full list of analyst forecasts on TXNM Energy stock, see the TXNM Stock Forecast page.

TXNM Energy Amends Credit Agreements Amid Merger Waivers

On May 23, 2025, TXNM Energy, Inc. made significant amendments to its credit agreements, including its $300 million revolving credit agreement and $500 million term loan agreement, to redefine ‘Change of Control’ and waive defaults related to its merger agreement with Troy ParentCo LLC. Additionally, Texas-New Mexico Power Company amended its $200 million revolving credit agreement to prevent a Bond Repurchase Event for its $1.505 billion First Mortgage Bonds. The termination of TXNM’s $910 million Merger Backstop Revolving Facility followed these amendments, as the necessary waivers were obtained.

The most recent analyst rating on (TXNM) stock is a Hold with a $45.00 price target. To see the full list of analyst forecasts on TXNM Energy stock, see the TXNM Stock Forecast page.

TXNM Energy to be Acquired by Blackstone Infrastructure

On May 18, 2025, TXNM Energy announced an agreement to be acquired by Blackstone Infrastructure for $61.25 per share, valuing the company at $11.5 billion. The merger, expected to close in the second half of 2026, aims to provide long-term capital to support TXNM’s growth in New Mexico and Texas. TXNM will remain locally managed, with commitments to retain its workforce and honor union agreements. The transaction has been unanimously approved by TXNM’s board and awaits regulatory approvals. The acquisition is expected to enhance TXNM’s infrastructure investments and align with its long-term financing strategy, benefiting stakeholders and supporting economic development in the region.

The most recent analyst rating on (TXNM) stock is a Hold with a $45.00 price target. To see the full list of analyst forecasts on TXNM Energy stock, see the TXNM Stock Forecast page.

TXNM Energy Gains Approval for Rate Increases

On May 15, 2025, the New Mexico Public Regulation Commission approved PNM’s 2025 Rate Request application, allowing a $105 million increase in revenue requirements to be phased in starting July 1, 2025, with a completion date of April 1, 2026. Additionally, TNMP received approval from the Public Utility Commission of Texas for a $25 million annual rate increase to recover distribution costs, effective approximately 45 days after approval. These regulatory approvals are significant for TXNM Energy‘s operations, impacting its financial structure and market positioning.

The most recent analyst rating on (TXNM) stock is a Hold with a $45.00 price target. To see the full list of analyst forecasts on TXNM Energy stock, see the TXNM Stock Forecast page.

TXNM Energy Announces Leadership Transition and Shareholder Meeting

On May 13, 2025, TXNM Energy‘s Board of Directors announced a leadership transition, effective July 1, 2025, with Patricia K. Collawn moving to Executive Chairman and Joseph D. Tarry assuming the roles of Chief Executive Officer and President. This transition is part of a long-standing succession plan, with Collawn having significantly advanced TXNM’s focus on regulated utilities and clean energy goals, achieving 72% carbon-free generation capacity by 2024. Additionally, TXNM held its Annual Meeting of Shareholders on May 13, 2025, where several directors were elected for a one-year term, KPMG LLP was ratified as independent public accountants, and the compensation of TXNM’s NEOs was approved.

The most recent analyst rating on (TXNM) stock is a Hold with a $42.00 price target. To see the full list of analyst forecasts on TXNM Energy stock, see the TXNM Stock Forecast page.