Investment Thesis
Avista is a stable utility with solid operating margins (23.5%) and reliable operating cash flow ($179M), but generates minimal free cash flow ($29M) and weak returns on equity (3.3%), indicating the company is capital-intensive with limited financial flexibility. Near-flat net income growth and low returns on assets suggest mature operations without meaningful expansion prospects.
Strengths
- Strong operating margins of 23.5% typical of regulated utilities
- Reliable operating cash flow of $179M providing financial stability
- Manageable leverage with debt/equity of 0.91x and interest coverage of 5.1x
Risks
- Extremely low return on equity (3.3%) and assets (1.1%) indicating capital inefficiency
- Minimal free cash flow of only $29M relative to $8.4B asset base limits growth and dividend flexibility
- Very low cash balance ($18M) relative to long-term debt ($2.5B) and capital intensity
- Flat net income growth (0.0% YoY) despite revenue growth suggests operational headwinds
- Current ratio of 0.90x indicates potential liquidity constraints
Key Metrics to Watch
- Free cash flow generation and FCF margin trends
- Return on equity progression toward utility sector benchmarks
- Debt-to-equity ratio and absolute debt levels given weak FCF coverage
- Operating cash flow sustainability and capital expenditure requirements
- Revenue growth acceleration and operating leverage improvement
Financial Metrics
Revenue
570.0M
Net Income
92.0M
EPS (Diluted)
$1.11
Free Cash Flow
29.0M
Total Assets
8.4B
Cash
18.0M
Profitability Ratios
Gross Margin
N/A
Operating Margin
23.5%
Net Margin
16.1%
ROE
3.3%
ROA
1.1%
FCF Margin
5.1%
Balance Sheet & Liquidity
Current Ratio
0.90x
Quick Ratio
0.60x
Debt/Equity
0.91x
Debt/Assets
67.0%
Interest Coverage
5.09x
Long-term Debt
2.5B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-07T08:06:16.892155 |
Data as of: 2026-03-31 |
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