Constellation Energy Corp (CEG) Stock Analysis
Constellation Energy Corp (CEG) Stock Analysis
Analysis from 10-Q filed 2025-11-07. Data as of Q4 2025.
Overall Grade: F (Concerning)
Constellation Energy Corp faces challenges in financial performance that warrant careful analysis.
| Metric | Value | Context |
|---|---|---|
| ROIC | 7.9% | Below expectations |
| FCF Margin | 5.0% | Healthy cash flow |
| Debt/Equity | 0.6x | Moderate leverage |
Investment Thesis: Financial metrics indicate concerning business quality with areas requiring attention.
Explore Constellation Energy Corp: Earnings History | Filing Intelligence | ROIC Analysis
Profitability: Constellation Energy Corp earns 7.9% ROIC, Top 50% in Utilities
Constellation Energy Corp's trailing-twelve-month ROIC of 7.9% ranks Top 50% in Utilities companies (sector median: 5.8%), driven by NOPAT margin of 8.0% combined with asset turnover of 0.5x. Source: 10-Q filed 2025-11-07.
| Metric | CEG | Rating | Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 7.9% | Warning | Above sector median of 5.8% |
| Return on Equity (ROE) | 17.0% | Good | Efficient use of shareholder equity |
| Operating Margin | 12.1% | Good | Moderate operational efficiency |
Cash Flow: Constellation Energy Corp generates $1.3B FCF at 5.0% margin, positive NaN/8 quarters
Constellation Energy Corp generated $1.3B in free cash flow (TTM), a 5.0% FCF margin, a margin that ranks Top 50% in Utilities. Operating cash flow exceeds net income by 1.8x, indicating high earnings quality. FCF was positive in N/A of the last 8 quarters. Source: 10-Q filed 2025-11-07.
| Metric | CEG | Rating | Context |
|---|---|---|---|
| Free Cash Flow Margin | 5.0% | Adequate | Healthy cash generation |
| Free Cash Flow (TTM) | $1.3B | Good | Positive cash generation |
| OCF/Net Income | 1.8x | Excellent | High earnings quality |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
Balance Sheet: Constellation Energy Corp at 0.6x leverage
Constellation Energy Corp's debt-to-equity ratio of 0.6x reflects moderate leverage. Total debt of $9.0B offset by $3.7B in cash. Source: 10-Q filed 2025-11-07.
| Metric | CEG | Rating | Context |
|---|---|---|---|
| Debt to Equity | 0.6x | Good | Moderate leverage |
| Net Cash Position | $-5.2B | Warning | Net debt position |
Valuation: Constellation Energy Corp trades at 47.7x earnings
Constellation Energy Corp trades at a P/E of 47.7x. Free cash flow yield of 1.2% reflects market expectations for growth.
| Metric | CEG | Rating | Context |
|---|---|---|---|
| P/E Ratio | 47.7x | Adequate | Premium valuation |
| EV/Sales | 4.5x | Good | Growth premium priced in |
| FCF Yield | 1.2% | Warning | Lower cash yield |
| Dividend Yield | 0.4% | Adequate | Growth focus over income |
Capital Allocation: Constellation Energy Corp returns 0.8% shareholder yield
Constellation Energy Corp's total shareholder yield is 0.8% (dividends 0.4% + buybacks 0.4%). Source: 10-Q filed 2025-11-07.
| Metric | CEG | Rating | Context |
|---|---|---|---|
| Total Shareholder Yield | 0.8% | Adequate | Dividend + buyback yield combined |
| Buyback Yield | 0.4% | Adequate | Minimal buyback activity |
| Total Capital Returned (TTM) | $886.0M | Good | Dividends + buybacks returned to shareholders |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 7.9% | Top 50% | 1.4x above |
| Free Cash Flow Margin | 5.0% | Top 50% | - |
| Operating Margin | 12.1% | Bottom 25% | 0.6x below |
| Return on Equity (ROE) | 17.0% | Top 25% | 1.8x above |
| P/E Ratio | 47.7x | N/A | - |
Financial Scorecard
| Metric | CEG | Rating | Sector Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 7.9% | Warning | Top 50% of sector (median: 5.8%) |
| Free Cash Flow Margin | 5.0% | Adequate | Top 50% of sector (median: 0.0%) |
| Debt to Equity Ratio | 61.9% | Good | Moderate leverage |
| P/E Ratio (Price-to-Earnings) | 47.7x | Adequate | High expectations priced in |
| Free Cash Flow Yield | 1.2% | Warning | Growth-focused valuation |
Frequently Asked Questions
Q: What is Constellation Energy Corp's Return on Invested Capital (ROIC)?
Constellation Energy Corp (CEG) has a trailing twelve-month Return on Invested Capital (ROIC) of 7.9%. This compares above the sector median of 5.8%. An ROIC below 8% suggests the company may be destroying shareholder value.
Q: What is Constellation Energy Corp's Free Cash Flow Margin?
Constellation Energy Corp (CEG) has a free cash flow margin of 5.0%, generating $1.3 billion in free cash flow over the trailing twelve months. A FCF margin between 5-10% is typical for capital-intensive businesses.
Q: Is Constellation Energy Corp stock overvalued or undervalued?
Constellation Energy Corp (CEG) trades at a P/E ratio of 47.7x, which is above the sector median of N/A. The EV/Sales multiple is 4.5x. Free cash flow yield is 1.2%, reflecting growth expectations priced into the stock.
Q: Does Constellation Energy Corp pay a dividend?
Constellation Energy Corp (CEG) currently pays a dividend yield of 0.4%. Including share buybacks, the total shareholder yield is 0.8%. The relatively low yield suggests the company prioritizes growth reinvestment over income distribution.
Q: How much debt does Constellation Energy Corp have?
Constellation Energy Corp (CEG) has a debt-to-equity ratio of 0.6x with total debt of $9.0 billion. Net debt position is $5.2 billion.
Q: What is Constellation Energy Corp's revenue and earnings growth?
Constellation Energy Corp (CEG) grew revenue by 8.3% year-over-year. Earnings per share decreased by 37.8% compared to the prior year. Modest growth indicates a mature business with stable demand.
Q: Is Constellation Energy Corp buying back stock?
Constellation Energy Corp (CEG) repurchased $400.0 million of stock over the trailing twelve months. This represents a buyback yield of 0.4%.
Q: How does Constellation Energy Corp compare to competitors in Utilities?
Compared to other companies in Utilities, Constellation Energy Corp (CEG) shows: ROIC of 7.9% is above the sector median of 5.8% (Top 31%). FCF margin of 5.0% exceeds the sector median of 0.0% (Top 39% of sector). These rankings are based on MetricDuck's analysis of all Utilities companies with available SEC filings.
Q: What warning signs should I watch for with Constellation Energy Corp?
Investors in Constellation Energy Corp (CEG) should monitor these potential warning signs: 1) ROIC has been declining, potentially signaling deteriorating competitive position. Regular monitoring of SEC filings and quarterly trends is recommended.
Data Source: Data sourced from 10-Q filed 2025-11-07. TTM metrics as of Q4 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.
This analysis is for informational purposes only and does not constitute investment advice.