American Electric Power Company, Inc. (AEP)

FairStock Score: 43/100 — MIXED

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I look for understandable businesses with durable demand and conservative finances. American Electric Power is a regulated electric utility: it generates, transmits, and distributes power, employing 17,581 people. Regulated franchises can create a narrow moat, but the business is capital-intensive. The filed numbers show scale: in FY2025, the year ended 2025-12-31, revenue was $21.7B, net income $3.7B, and diluted EPS $6.66, up from FY2024 revenue of $20.0B, net income of $3.0B, and $5.58 EPS. In fiscal Q1 2026, the quarter ended 2026-03-31, revenue was $5.9B, net income $903.0M, and diluted EPS $1.60. However, at the 2026-10-13 close of $125.65, FairStock calculates a P/E of 21.78, P/B of 2.13, ROE of 10.13%, and ROCE of 2.98%. Its Graham Number is $87.47, so the price carries a negative 43.65% margin of safety. Free cash flow is negative $2.4B, an FCF yield of -3.6%, while debt-to-equity is 1.61. Utilities often borrow for infrastructure, but negative free cash flow and an Altman Z-Score of 0.66 leave little cushion. The Piotroski F-Score is 4/9. Growth has been decent: FairStock's Lynch category is STALWART, reflecting 11.0% annual profit growth and 7.8% revenue growth over five years. Yet the market already pays about 22 times earnings and well above the Graham Number. I want a wider margin of safety before calling this compelling.

In plain English: American Electric Power makes and delivers electricity to homes and businesses in the United States. The business is steady and essential, but it carries a lot of debt and currently spends more cash than it brings in after investment. At the recent price, the shares look expensive compared with the company's current earnings and asset value.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · fiscal Q1 2025 10-Q (period ended 2025-03-31) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer