FirstEnergy Corp (FE) stock analysis

P/E below its 5-year median

FirstEnergy's P/E of 22.4 is below its own 5-year median of 22.9.

P/E above the industry

FirstEnergy's P/E of 22.4 is above the Electric Services median of 20.9.

EV/EBITDA above its 5-year median

FirstEnergy's EV/EBITDA of 24.2 is above its 5-year median of 20.3.

P/B above the industry

FirstEnergy's price-to-book of 2.08 is above the Electric Services median of 2.02.

Trading above fair value

The share price of $46.53 is above our fair value estimate of $33.48.

Margin of safety under 20%

The price is 39.0% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 6.6% a year over the last three fiscal years, short of the 10% we look for.

EPS growing 10%+ a year

Diluted EPS grew 35.3% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -9.7% over the last twelve months, against a 5-year average of -1.1% a year.

Growing faster than the industry

Revenue grew 12.2% over the last twelve months; the Electric Services median is 7.8%.

Guidance issued

The latest outlook (through 2030 Core Earnings compound annual growth rate, Oct 27, 2026) was issued for the first time, so it neither adds nor takes away points.

Gross margin trend

This company does not report gross profit.

Return on equity under 15%

Return on equity was 9.3% over the last twelve months and averaged 9.6% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 4.9%, below the 10% that usually covers the cost of capital.

Return on equity above the industry

FirstEnergy's return on equity of 9.3% is above the Electric Services median of 8.3%.

Earnings shrank over 5 years

Net income shrank 1.1% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 7.4% over the last twelve months, against a 5-year average of 7.5%.

Net margin below the industry

FirstEnergy's net margin of 7.4% is below the Electric Services median of 8.8%.

High debt

Debt is 232% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 338% five years ago to 232%.

Debt not well covered by cash flow

Operating cash flow over the last twelve months equals 10.6% of total debt; we look for at least 20%.

Interest not well covered

Operating income covers interest expense 1.8 times; we look for at least 5.

Short-term assets don't cover short-term debts

Current assets are 0.38 times current liabilities.

Elevated bankruptcy risk

The Altman Z-score is 0.66; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

FirstEnergy paid dividends worth 3.0% of the share price over the last twelve months.

Yield below Treasuries

The 3.0% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; FirstEnergy yields 3.0%.

Dividend was cut

The dividend per share fell by more than 10% at least once in the last 10 fiscal years.

Covered by earnings

Dividends take 87.6% of net income.

Cash-flow cover

Needs dividends paid and free cash flow.