Pinnacle West Capital Corporation (PNW)
Pinnacle West Capital Corporation, through its subsidiary Arizona Public Service, provides electricity services in Arizona. With a focus on regulated operations, PNW serves approximately 1.3 million customers, utilizing a diverse mix of generation sources including nuclear and solar.
Company Overview
Pinnacle West Capital (PNW) offers stable returns through its regulated Arizona utility operations, providing essential electric services to 1.3 million customers. With a 3.86% dividend yield and a diversified energy portfolio, PNW presents a compelling investment in a growing Southwestern market.
Investment Thesis
Pinnacle West Capital presents a compelling investment opportunity due to its regulated utility business model and its strategic position in a high-growth region. With a current dividend yield of 3.86% and a P/E ratio of 18.82, PNW offers a blend of income and stability. The company's ongoing investments in renewable energy sources, particularly solar, align with the increasing demand for clean energy and position it favorably for future growth. Key value drivers include continued customer growth in Arizona, regulatory support for infrastructure investments, and efficient management of its diverse generation portfolio. Upcoming regulatory rate cases and infrastructure upgrades are potential catalysts that could enhance shareholder value.
Key Highlights
- Serves approximately 1.3 million customers in Arizona, providing a stable revenue base.
- Maintains a dividend yield of 3.86%, offering attractive income to investors.
- Operates with a profit margin of 11.2%, reflecting efficient cost management.
- Gross margin of 38.2% demonstrates effective revenue generation from its electric services.
- Beta of 0.55 indicates lower volatility compared to the broader market, providing stability in investment portfolios.
Competitors
Strengths
- Regulated utility business model provides stable and predictable earnings.
- Strong market position in Arizona, a high-growth state.
- Diversified energy portfolio with increasing investments in renewable energy.
- Experienced management team with a focus on operational efficiency.
Weaknesses
- Exposure to regulatory risks and rate case outcomes.
- Dependence on fossil fuels for a portion of its generation capacity.
- Potential for increased competition from alternative energy providers.
- Vulnerability to extreme weather events and natural disasters.
Catalysts
- Upcoming: Regulatory rate case decisions that could impact revenue and earnings.
- Ongoing: Investments in renewable energy projects that will increase generation capacity.
- Ongoing: Infrastructure modernization projects to improve grid reliability and efficiency.
- Ongoing: Customer growth in Arizona, driving increased demand for electricity.
Risks
- Potential: Adverse regulatory outcomes that could reduce allowed rates of return.
- Potential: Delays or cost overruns in major capital projects.
- Potential: Increased competition from alternative energy providers.
- Ongoing: Fluctuations in fuel prices and commodity markets.
- Ongoing: Extreme weather events and natural disasters that could disrupt operations.
Growth Opportunities
- Expansion of Renewable Energy Portfolio: Arizona's increasing demand for clean energy provides a significant growth opportunity for Pinnacle West. Investing in and expanding its solar generating facilities will allow the company to meet regulatory requirements and customer preferences for renewable energy. This expansion can drive revenue growth and improve the company's environmental profile. The market for renewable energy in Arizona is projected to grow significantly over the next decade.
- Infrastructure Modernization: Upgrading and modernizing its transmission and distribution infrastructure will improve the reliability and efficiency of Pinnacle West's services. These investments, supported by regulatory rate cases, can drive earnings growth and enhance customer satisfaction. The company can leverage technological advancements to optimize grid operations and reduce operational costs. This represents a multi-billion dollar investment opportunity over the next 5-10 years.
- Electric Vehicle (EV) Charging Infrastructure: The increasing adoption of electric vehicles presents a new growth opportunity for Pinnacle West. Investing in EV charging infrastructure will allow the company to capture a share of the growing EV market and support the transition to electric transportation. This includes developing charging stations for residential, commercial, and public use. The EV market in Arizona is expected to grow rapidly over the next decade.
- Data Analytics and Smart Grid Technologies: Implementing advanced data analytics and smart grid technologies will enable Pinnacle West to optimize its operations, improve grid reliability, and enhance customer service. These technologies can provide real-time insights into energy consumption patterns, allowing the company to better manage demand and reduce costs. This investment will also support the integration of renewable energy sources into the grid.
- Customer Growth in Arizona: Arizona's strong population growth provides a fundamental growth driver for Pinnacle West. As the state's population continues to increase, the demand for electricity will also rise, providing a stable and predictable source of revenue growth for the company. Pinnacle West can capitalize on this trend by expanding its service territory and attracting new customers. Arizona is consistently ranked among the fastest-growing states in the US.
Opportunities
- Expansion of renewable energy generation capacity to meet increasing demand.
- Investments in smart grid technologies to improve grid reliability and efficiency.
- Development of EV charging infrastructure to support the transition to electric transportation.
- Strategic acquisitions and partnerships to expand its service territory.
Threats
- Changes in regulatory policies and environmental regulations.
- Increased competition from distributed generation and energy storage technologies.
- Fluctuations in fuel prices and commodity markets.
- Cybersecurity threats and potential disruptions to grid operations.
Competitive Advantages
- Regulated Monopoly: Operates as a regulated utility in Arizona, providing a protected market with limited competition.
- High Barriers to Entry: Significant capital investments and regulatory approvals required to enter the electric utility market.
- Essential Service: Provides an essential service (electricity) with stable and predictable demand.
- Established Infrastructure: Extensive transmission and distribution network provides a competitive advantage.
About
Pinnacle West Capital Corporation, incorporated in 1985 and headquartered in Phoenix, Arizona, operates primarily through its subsidiary, Arizona Public Service Company (APS). APS is the largest electric utility in Arizona, providing retail and wholesale electric services to approximately 1.3 million customers across the state. The company's operations encompass the generation, transmission, and distribution of electricity, utilizing a diverse portfolio of energy sources including coal, nuclear, gas, oil, and a growing emphasis on solar generating facilities. APS owns or leases approximately 6,323 megawatts of regulated generation capacity. Its transmission infrastructure includes 5,814 pole miles of overhead lines and 74 miles of underground lines, while its distribution network comprises 11,258 miles of overhead lines and 22,821 miles of underground primary cable, supported by 475 transmission and distribution substations. Pinnacle West's strategic focus on regulated operations within a favorable demographic growth region positions it as a stable and reliable investment within the utilities sector. The company is committed to meeting Arizona's increasing energy demands while transitioning to cleaner energy sources.
What They Do
- Generates electricity using coal, nuclear, gas, oil, and solar facilities.
- Transmits electricity through overhead and underground lines.
- Distributes electricity to residential, commercial, and industrial customers.
- Owns and maintains transmission and distribution substations.
- Provides retail and wholesale electric services in Arizona.
- Manages a diverse portfolio of energy sources to ensure reliable power supply.
- Focuses on expanding renewable energy generation capacity.
Business Model
- Generates revenue through regulated electricity sales to residential, commercial, and industrial customers.
- Invests in and maintains its infrastructure, including power plants, transmission lines, and distribution networks.
- Recovers its costs and earns a regulated rate of return on its investments through regulatory rate cases.
- Focuses on operational efficiency and cost management to maximize profitability.
Industry Context
Pinnacle West operates within the regulated electric utility industry, which is characterized by stable demand and regulated pricing structures. The industry is undergoing a significant transformation driven by the increasing adoption of renewable energy sources and the modernization of grid infrastructure. The market is competitive, with companies like AES and CMS also vying for market share. The industry is expected to see continued growth, driven by population increases and electrification trends. Pinnacle West's focus on Arizona, one of the fastest-growing states in the US, positions it favorably to capitalize on these trends.
Key Customers
- Residential customers: Homeowners and renters who use electricity for lighting, heating, cooling, and appliances.
- Commercial customers: Businesses, schools, hospitals, and government agencies that use electricity for their operations.
- Industrial customers: Manufacturing plants, mines, and other industrial facilities that use large amounts of electricity.
- Wholesale customers: Other utilities and power companies that purchase electricity from Pinnacle West.
Financials
Recent Quarterly Results
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2024 | $1.77B | $395M | $3.37 |
| Q4 2024 | $1.10B | -$7M | $-0.06 |
| Q1 2025 | $1.03B | -$5M | $-0.04 |
| Q2 2025 | $1.36B | $193M | $1.58 |
Source: Company filings
Chart & Info
Price Chart
Pinnacle West Capital Corporation (PNW) stock price: $99.39 (+0.00, +0.00%)
Why Bull
- •Recent insider buying suggests confidence in the company's future, indicating that executives believe in its growth potential.
- •Community sentiment has shifted positively, with discussions around renewable energy initiatives gaining traction among investors.
- •Pinnacle West's commitment to sustainability aligns with increasing regulatory support for green energy, appealing to socially responsible investors.
- •The company has maintained stable dividends, which reinforces its attractiveness to income-focused investors.
Why Bear
- •Concerns over rising operational costs have been prevalent, leading to skepticism about profit margins in the near term.
- •Some community members express doubts about the company's ability to adapt quickly to changing energy regulations, creating uncertainty.
- •Recent discussions highlight potential risks associated with infrastructure investments, raising questions about long-term viability.
- •Market sentiment reflects apprehension over economic headwinds that may impact utility stocks, causing some investors to reconsider their positions.
Latest News
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Evergy to Post Q4 Earnings: What to Expect From the Stock?
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PPL to Release Q4 Earnings: Time to Buy, Hold or Sell the Stock?
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Zacks.com featured highlights include Universal Health Services, Pinnacle West Capital and Methanex
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Earnings Scheduled For August 6, 2025
benzinga · Aug 6, 2025
Technical Analysis
Rationale
AI-generated technical analysis for PNW including trend direction, momentum, and pattern recognition.
What to Watch
Key support and resistance levels, volume signals, and upcoming events.
Risk Management
Position sizing, stop-loss levels, and risk-reward assessment.
Community
Discussion
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Sentiment
Community sentiment and discussion activity for PNW.
Make a Prediction
Set your price target for Pinnacle West Capital Corporation (PNW), choose a timeframe, and track your prediction accuracy.
Current price: $99.39
Analyst Consensus
Consensus Rating
Aggregated Buy/Hold/Sell recommendations from Benzinga, Yahoo Finance, and Finnhub for PNW.
Price Targets
Wall Street price target analysis for PNW.
Insider Flow (30d)
MoonshotScore
Score Factors
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Revenue Growth 4/100
Revenue grew only 9.1% YoY, suggesting the company is in a slower growth phase.
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Gross Margin 8/100
Gross margin at 41.2% indicates good unit economics and healthy profitability per sale.
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Operating Leverage 4/100
Limited operating leverage due to slower revenue growth, keeping profit scaling constrained.
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Cash Runway 5/100
Cash position data is currently unavailable for this company.
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R&D Intensity 5/100
R&D spending data is currently unavailable for this company.
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Insider Activity 6/100
No significant insider buying or selling recently, which is neutral for the stock outlook.
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Short Interest 5/100
Float and volume data unavailable for liquidity analysis.
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Price Momentum 0/100
No bullish technical signals detected. The stock lacks upward price momentum currently.
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News Sentiment 5/100
No sentiment data available
What does this score mean?
The MoonshotScore rates PNW's growth potential on a scale of 0-100 across multiple factors including innovation, market disruption, financial health, and momentum.
Competitors & Peers
Latest News
Evergy to Post Q4 Earnings: What to Expect From the Stock?
PPL to Release Q4 Earnings: Time to Buy, Hold or Sell the Stock?
Zacks.com featured highlights include Universal Health Services, Pinnacle West Capital and Methanex
Earnings Scheduled For August 6, 2025
Frequently Asked Questions
What does Pinnacle West Capital Corporation do?
Pinnacle West Capital Corporation, through its subsidiary Arizona Public Service Company (APS), is primarily engaged in providing retail and wholesale electric services in the state of Arizona. APS generates, transmits, and distributes electricity using a diverse mix of energy sources, including coal, nuclear, gas, oil, and solar. The company serves approximately 1.3 million customers and owns or leases approximately 6,323 megawatts of regulated generation capacity. Pinnacle West focuses on regulated operations, ensuring a stable and reliable power supply to meet the growing energy demands of Arizona.
Is PNW stock a good buy?
PNW stock presents a balanced investment opportunity with a current dividend yield of 3.86% and a P/E ratio of 18.82. The company's regulated utility business model provides stable earnings, and its strategic position in the high-growth Arizona market offers potential for future growth. While regulatory risks and dependence on fossil fuels are factors to consider, Pinnacle West's investments in renewable energy and infrastructure modernization position it favorably for long-term value creation. Investors should weigh these factors against their individual risk tolerance and investment objectives.
What are the main risks for PNW?
Pinnacle West faces several key risks, including adverse regulatory outcomes that could reduce allowed rates of return, potential delays or cost overruns in major capital projects, and increased competition from alternative energy providers. Fluctuations in fuel prices and commodity markets can also impact profitability. Additionally, the company is vulnerable to extreme weather events and natural disasters that could disrupt operations. Effective risk management and mitigation strategies are crucial for Pinnacle West to navigate these challenges and maintain its financial stability.
Is PNW a good stock to buy?
Whether PNW is a good investment depends on your financial goals, risk tolerance, and investment horizon. Key factors to evaluate include the company's revenue growth trajectory, profit margins, debt-to-equity ratio, competitive moat, and valuation multiples (P/E, P/S, EV/EBITDA) relative to industry peers. Our AI-generated Investment Thesis and SWOT analysis on this page provide a data-driven starting point. Always do your own research and consider consulting a financial advisor before making investment decisions.
What is the PNW MoonshotScore?
The MoonshotScore for PNW is an AI-powered rating from 0 to 100 that evaluates a stock across four dimensions: growth potential (revenue and earnings trajectory), financial health (balance sheet strength, cash flow), market momentum (price trends, volume patterns, institutional flows), and risk factors (volatility, debt levels, sector headwinds). Scores above 70 indicate strong potential, 50-70 moderate, and below 50 suggests caution. The score is recalculated daily using the latest financial data and market signals.
How often is PNW data updated?
PNW stock prices are updated in real-time during U.S. market hours (9:30 AM - 4:00 PM ET, Monday through Friday). After-hours and pre-market prices are also tracked. Company fundamentals (earnings, revenue, balance sheet) are refreshed when new quarterly or annual reports are filed. Analyst ratings, price targets, and AI-generated insights are updated daily. Breaking news related to PNW is aggregated continuously from premium financial news sources throughout the day.
What are the growth catalysts for PNW?
Growth catalysts for Pinnacle West Capital Corporation (PNW) can include several categories: product catalysts (new launches, FDA approvals, patent grants), financial catalysts (earnings beats, margin expansion, share buybacks), strategic catalysts (acquisitions, partnerships, market expansion into new regions), and macro catalysts (favorable regulation, industry tailwinds, secular growth trends). Our AI analyzes Pinnacle West Capital Corporation's specific catalysts using earnings transcripts, SEC filings, and news sentiment to identify the most impactful near-term and long-term drivers.
Who are PNW's main competitors?
Pinnacle West Capital Corporation (PNW) competes with companies in its industry that target similar customers, markets, or product categories. Competitor analysis involves comparing key metrics: market share, revenue growth rates, profit margins, R&D spending, and valuation multiples. Understanding competitive positioning helps investors assess whether PNW has a sustainable competitive advantage (moat) through brand strength, network effects, cost leadership, or switching costs. Our Competitors section provides a side-by-side comparison with relevant peers.
What do analysts say about PNW?
Wall Street analyst coverage for PNW includes consensus ratings (buy, hold, or sell), 12-month price targets, and earnings estimates. Analyst opinions are aggregated from major investment banks and research firms. Key metrics to watch include the consensus price target (average, high, and low estimates), the number of analysts covering the stock, any recent rating changes (upgrades or downgrades), and how actual earnings compare to analyst estimates (beat or miss history). Our platform aggregates these from multiple data providers for a comprehensive view.
What is PNW's market cap?
Market capitalization (market cap) for PNW is calculated by multiplying the current share price by the total number of outstanding shares. It represents the market's total valuation of the company. Stocks are typically categorized as mega-cap ($200B+), large-cap ($10B-$200B), mid-cap ($2B-$10B), small-cap ($300M-$2B), or micro-cap (under $300M). Market cap influences index inclusion, institutional ownership eligibility, and risk profile. Our Key Statistics section shows PNW's current market cap alongside enterprise value and other valuation metrics.
How has PNW stock performed recently?
PNW's recent stock performance can be evaluated across multiple timeframes: daily price changes, week-over-week momentum, monthly trends, and year-to-date returns. Important performance indicators include the stock's 52-week high and low, moving averages (50-day and 200-day SMA), relative strength index (RSI), and volume trends. Comparing PNW's performance against its sector index and the S&P 500 provides context on whether it is outperforming or underperforming the broader market.
What are the risks of investing in PNW?
Key risk categories for PNW include: market risk (overall market downturns affecting stock prices), company-specific risk (management changes, product failures, competitive threats), financial risk (high debt levels, cash burn, dilution from stock issuance), regulatory risk (government policy changes, lawsuits, compliance issues), and macroeconomic risk (interest rate changes, inflation, currency fluctuations). Beta measures PNW's volatility relative to the market - a beta above 1.0 means higher volatility than the S&P 500. Our AI-generated risk assessment identifies the most relevant risk factors for this specific stock.
Are insiders buying or selling PNW?
Insider trading activity for PNW tracks purchases and sales by company executives, directors, and major shareholders (10%+ owners) as reported in SEC Form 4 filings. Insider buying is generally considered a bullish signal because insiders have the deepest knowledge of company operations, while selling may have various motivations (diversification, tax planning, pre-planned 10b5-1 trading plans). Key metrics include the buy-to-sell ratio, total dollar value of insider transactions, and whether multiple insiders are trading in the same direction. Our Insider Flow tab shows recent transactions with dates and dollar amounts.
Is PNW a good stock for beginners?
Pinnacle West Capital Corporation (PNW) can be suitable for beginner investors depending on several factors. Look at the MoonshotScore on this page for an overall AI-powered assessment of growth potential and risk. Beginners should also check the company's market cap (larger companies tend to be less volatile), gross margin (higher margins mean stronger business fundamentals), and cash position (healthy cash reduces bankruptcy risk). Always start with a small position size and never invest money you cannot afford to lose.
How risky is PNW for first-time investors?
Every stock carries risk, including Pinnacle West Capital Corporation (PNW). First-time investors should review the Risk Factors section on this page for company-specific risks. Key risk indicators include price volatility (check the chart for daily swings), insider selling activity (see Insider Flow tab), and cash runway (see MoonshotScore breakdown). A diversified portfolio with an index fund like the S&P 500 as a core holding is generally recommended before adding individual stocks like PNW.
Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.
Data provided for informational purposes only.
- Data is based on publicly available information and may be subject to change.
- Investment decisions should be based on individual risk tolerance and financial circumstances.