CMS Energy Corporation (CMS)

FairStock Score: 40/100 — MIXED

Key Financials

AI Analysis

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

I look for a durable business bought at a sensible price. CMS Energy is a regulated electric and gas utility in Michigan, which gives it a local monopoly-like service area and predictable demand. That is a real moat, but regulation caps excess returns; the data's calculated ROE is 9.16% and ROCE is 2.97%, which are not exceptional. Growth is slow: filed FY2023 diluted EPS was $3.01, FY2024 was $3.33, and FY2025 was $3.53. The Lynch-style classification in the data is a slow grower, with profit up 7.2% a year over five years and revenue up 5.9%. The latest filed quarter, fiscal Q2 2026 ended 2026-06-30, had revenue of $1.8B and net income of $120M, or $0.37 per diluted share, versus $201M and $0.66 in fiscal Q2 2025. Financial health is the bigger issue: trailing free cash flow is negative $2.1B, an FCF yield of -10.1%, while debt-to-equity is 1.86 and the Altman Z-Score is 0.56. Utilities can carry debt, but negative free cash flow means growth is funded externally. FairStock calculations at the 2026-10-13 close of $66.30 are not Graham-like: P/E is 19.91, P/B is 2.18, and the Graham Number is $48.33, implying the price is about 37% above that rough value. EV/EBITDA is 12.02. The 3.49% dividend yield and beta of 0.33 offer some defensive appeal, but I would not call the price cheap given weak cash generation and flat-to-declining recent profit.

In plain English: CMS Energy provides electricity and natural gas, mostly in Michigan, along with some clean-energy operations. The business is steady and pays a dividend, but recent profit has weakened and it is spending more cash than it generates. At $66.30, the shares look expensive compared with the company's current earnings, accounting value, and cash flow, so the price does not appear cheap based on the numbers shown.

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

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · 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) · 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