# Pinnacle West Capital (PNW.US)

Canonical: https://gigainvestors.com/s/PNW

Analysis as of: 2026-10-16T07:35:31.905Z. Financial observations: FY1996–FY2025.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $101.58 per share; close as of 2026-10-15.

Estimated value: low $61.40 per share, central $76.94 per share, high $89.81 per share. Buy at or below the central value $76.94 per share. Valuation as of 2026-10-16T07:35:31.905Z; scenarios are not confidence intervals.

Expected annual return: 8.3% at the stated quote. About 8.3% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 1 revenue decline in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 1

- Years with a net loss: 0

- Operating margin variation: 0.12×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.24×

- FY2017: 0.26×

- FY2018: 0.21×

- FY2019: 0.19×

- FY2020: 0.22×

- FY2021: 0.21×

- FY2022: 0.17×

- FY2023: 0.18×

- FY2024: 0.20×

- FY2025: 0.21×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- Recent gross margin fell 17.3pp below the typical margin (limit 4pp)

- ROIC, median of available years: 5.2%

- ROIC, second-lowest year: 4.3%

- Typical minus recent gross margin: 17.3 pp

- Typical gross margin (annual median): 42.7%

- Recent gross margin (lower of latest and 3-year median): 25.4%

- Years with nonpositive capital: 0

- Capital spending / revenue: 39.0%

- ROIC including acquisitions, ten-year median: 3.0%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 6.1%

- FY2017: 6.1%

- FY2018: 5.9%

- FY2019: 6.0%

- FY2020: 5.5%

- FY2021: 4.9%

- FY2022: 4.3%

- FY2023: 4.4%

- FY2024: 4.8%

- FY2025: 3.8%

### economics: fail

- owner earnings cash conversion below threshold

- incremental invested capital return below threshold

- Owner earnings / net income, 5-yr: 0.73×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $2.1B

- Net income, five-year total: $2.8B

- Return on incremental invested capital: 4.4%

- Working capital / revenue, annual change: 0.3 pp

- Working capital / revenue, change between three-year averages: 1.9 pp

- Working capital / revenue, final three-year average: 13.4%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.00×

- FY2022: 1.00×

- FY2023: 1.00×

- FY2024: 1.00×

- FY2025: -0.23×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 6.1% vs 4.4%

- Per-share earnings: 3.95 to 5.05 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 0.9%

- Ordinary dilution, 5-year annual growth: 1.6%

- Market cap gain: $2.1B

- Cumulative retained earnings: $1.6B

- Diluted shares, 10-year annual growth: 0.9%

- Diluted shares, 5-year annual growth: 1.6%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 3.1%

- Per-share value change: $1.11

- Per-share value, starting three-year median: $3.95

- Per-share value, ending three-year median: $5.05

- Buybacks concentrated in cheaper years (correlation): -0.79

- Average buyback yield: 0.1%

- Buyback history: 7 years

- Debt-funded buybacks: No

- Acquisition spending: $201M

- Cumulative net income, 10 years: $5.4B

- ROIC, first three-year median: 6.1%

- ROIC, last three-year median: 4.4%

Chart: Earnings per share; fiscal year observations.

- FY2016: $3.95

- FY2017: $4.35

- FY2018: $4.54

- FY2019: $4.77

- FY2020: $4.87

- FY2021: $5.47

- FY2022: $4.26

- FY2023: $4.41

- FY2024: $5.24

- FY2025: $5.05

### accounting: pass

- Sloan accruals: -3.8%

- Receivables to sales index (DSRI): 1.04×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 1.5%

- Earnings backed by cash: Yes

- Operating cash / earnings: 2.93×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.08×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -3.6%

- FY2017: -3.7%

- FY2018: -4.3%

- FY2019: -2.3%

- FY2020: -2.1%

- FY2021: -1.1%

- FY2022: -3.3%

- FY2023: -2.9%

- FY2024: -3.8%

- FY2025: -3.8%

## Holders

## Price story

Price needs cash profits to grow 6.7% a year for ten years · sales +4.2%

Story as of 2026-10-16T10:00:05.396Z; price observation 2026-10-15.

Price needs cash profits to grow 6.7% a year for ten years

- 2026-02-25: Pinnacle West Beats Q4 Earnings and Sales Estimates, to Invest $8B ([finance.yahoo.com](https://finance.yahoo.com/news/pinnacle-west-beats-q4-earnings-172000299.html))

### Sales · FY2024–2025

sales +4.2%; source https://www.sec.gov/Archives/edgar/data/764622/000076462226000011/pnw-20251231.htm; observed 2026-02-25.

- FY2016: $3.5B 

- FY2017: $3.6B 

- FY2018: $3.7B 

- FY2019: $3.5B 

- FY2020: $3.6B 

- FY2021: $3.8B 

- FY2022: $4.3B 

- FY2023: $4.7B 

- FY2024: $5.1B 

- FY2025: $5.3B 

### Gross margin · FY2025

gross margin 25.4%; source https://www.sec.gov/Archives/edgar/data/764622/000076462226000011/pnw-20251231.htm; observed 2026-02-25.

- FY2016: 42.6% 

- FY2017: 45.9% 

- FY2018: 42.8% 

- FY2019: 42.8% 

- FY2020: 45.6% 

- FY2021: 44.6% 

- FY2022: 39.5% 

- FY2023: 39.3% 

- FY2024: 41.7% 

- FY2025: 25.4% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in utilities regulated electric; annual sales are USD 5.3 billion.

- Source: https://eodhd.com/api/fundamentals/PNW.US.json#2025-12-31 (filed 2026-02-25); FY2025: revenue 5339939000; grossProfit 1356677000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); PNW.US: Pinnacle West Capital Corporation, through its subsidiary, provides retail and wholesale electric services in the state of Arizona. The company engages in the generation, transmission, and distribution of electricity using nuclear, gas, oil, coal, and solar generating facilities. Its transmission facilities include overhead lines and underground lines; and distribution facilities consist of overhead lines and underground primary cables. The company also owns and maintains substations, including transmission and distribution yards; and owns energy storage facilities. Pinnacle West Capital Corporation was incorporated in 1985 and is headquartered in Phoenix, Arizona.

### Why customers stay

Margins ranged from 25.4% to 41.7% during 2023–25; it earns 5.2% on its capital.

- Source: https://eodhd.com/api/fundamentals/PNW.US.json#2023-12-31 (filed 2026-02-25); FY2023: grossProfit / revenue = 39.3%.

- Source: https://eodhd.com/api/fundamentals/PNW.US.json#2024-12-31 (filed 2026-02-25); FY2024: grossProfit / revenue = 41.7%.

- Source: https://eodhd.com/api/fundamentals/PNW.US.json#2025-12-31 (filed 2026-02-25); FY2025: grossProfit / revenue = 25.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); 10-year return on capital observations [[2016,0.06059687814250501],[2017,0.060553447159785646],[2018,0.05921993068906965],[2019,0.0598245238703821],[2020,0.05547976985322679],[2021,0.048752628515122305],[2022,0.04267637428624999],[2023,0.04358898293161609],[2024,0.04832858322330957],[2025,0.038440186448508315]]; median 0.05211619918417455. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid dividends in 10 of 10 years.

- Source: https://eodhd.com/api/fundamentals/PNW.US.json#2018-12-31 (filed 2026-02-25); FY2018: growth capex 442126001.919907; upkeep 736042998.080093; owner earnings 425959001.919907. Growth capex / owner earnings = 1.037954356938417.

- Source: https://eodhd.com/api/fundamentals/PNW.US.json#2019-12-31 (filed 2026-02-25); FY2019: growth capex 0; upkeep 1191447000; owner earnings 11013000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/api/fundamentals/PNW.US.json#2020-12-31 (filed 2026-02-25); FY2020: growth capex 450751968.3469069; upkeep 875832031.6530931; owner earnings 360979968.3469069. Growth capex / owner earnings = 1.248689699905253.

- Source: https://eodhd.com/api/fundamentals/PNW.US.json#2021-12-31 (filed 2026-02-25); FY2021: growth capex 754334000; upkeep 719141000; owner earnings 618720000. Growth capex / owner earnings = 1.219184768554435.

- Source: https://eodhd.com/api/fundamentals/PNW.US.json#2022-12-31 (filed 2026-02-25); FY2022: growth capex 889676000; upkeep 817814000; cash acquisitions 0; owner earnings 483602000. Growth capex plus acquisitions / owner earnings = 1.8396863536544514.

- Source: https://eodhd.com/api/fundamentals/PNW.US.json#2023-12-31 (filed 2026-02-25); FY2023: growth capex 992234000; upkeep 854136000; cash acquisitions 0; owner earnings 501557000. Growth capex plus acquisitions / owner earnings = 1.978307550288402.

- Source: https://eodhd.com/api/fundamentals/PNW.US.json#2024-12-31 (filed 2026-02-25); FY2024: growth capex 1293011000; upkeep 956184000; cash acquisitions 0; owner earnings 608806000. Growth capex plus acquisitions / owner earnings = 2.123847333961886.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); Dividend observations: [[2016,274229000],[2017,289793000],[2018,308892000],[2019,329643000],[2020,350577000],[2021,369478000],[2022,378881000],[2023,386486000],[2024,394663000],[2025,422792000]]. Zero only counted when supported by a complete cash-flow statement.

### Are managers owners

Insiders own 0.2% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); PNW.US SharesStats.PercentInsiders = 0.155 percentage points; cache date 2026-10-16.

### What could break it

"The impact of wildfires could negatively affect APS’s results of operations." (SEC filing, Feb 2026)

- Source: https://www.sec.gov/Archives/edgar/data/764622/000076462226000011/pnw-20251231.htm (filed 2026-02-25); The impact of wildfires could negatively affect APS’s results of operations.

### What the price says

The price assumes cash profits grow 6.7% yearly over ten years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); Ten-year compound average after fade. Initial solved rate 0.08369688817619403. Price 101.58; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share -0.49454845154500976 → FY2025 -1.1667502784760944. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $76.13 per share

- 2016-11: $73.93 per share

- 2016-12: $78.03 per share

- 2017-01: $77.63 per share

- 2017-02: $82.19 per share

- 2017-03: $83.38 per share

- 2017-04: $85.09 per share

- 2017-05: $88.35 per share

- 2017-06: $85.16 per share

- 2017-07: $86.73 per share

- 2017-08: $89.97 per share

- 2017-09: $84.56 per share

- 2017-10: $87.71 per share

- 2017-11: $91.81 per share

- 2017-12: $85.18 per share

- 2018-01: $79.95 per share

- 2018-02: $76.96 per share

- 2018-03: $79.80 per share

- 2018-04: $80.50 per share

- 2018-05: $79.61 per share

- 2018-06: $80.56 per share

- 2018-07: $80.43 per share

- 2018-08: $78.55 per share

- 2018-09: $79.18 per share

- 2018-10: $82.25 per share

- 2018-11: $89.36 per share

- 2018-12: $85.20 per share

- 2019-01: $88.12 per share

- 2019-02: $93.74 per share

- 2019-03: $95.58 per share

- 2019-04: $95.27 per share

- 2019-05: $93.91 per share

- 2019-06: $94.09 per share

- 2019-07: $91.22 per share

- 2019-08: $95.31 per share

- 2019-09: $97.07 per share

- 2019-10: $94.12 per share

- 2019-11: $87.39 per share

- 2019-12: $89.93 per share

- 2020-01: $97.69 per share

- 2020-02: $89.49 per share

- 2020-03: $75.79 per share

- 2020-04: $76.99 per share

- 2020-05: $77.90 per share

- 2020-06: $73.29 per share

- 2020-07: $83.08 per share

- 2020-08: $73.35 per share

- 2020-09: $74.55 per share

- 2020-10: $81.57 per share

- 2020-11: $81.85 per share

- 2020-12: $79.95 per share

- 2021-01: $75.25 per share

- 2021-02: $69.93 per share

- 2021-03: $81.35 per share

- 2021-04: $84.65 per share

- 2021-05: $84.58 per share

- 2021-06: $81.97 per share

- 2021-07: $83.55 per share

- 2021-08: $76.90 per share

- 2021-09: $72.36 per share

- 2021-10: $64.49 per share

- 2021-11: $65.05 per share

- 2021-12: $70.59 per share

- 2022-01: $69.61 per share

- 2022-02: $70.83 per share

- 2022-03: $78.10 per share

- 2022-04: $71.20 per share

- 2022-05: $77.65 per share

- 2022-06: $73.12 per share

- 2022-07: $73.47 per share

- 2022-08: $75.35 per share

- 2022-09: $64.51 per share

- 2022-10: $67.21 per share

- 2022-11: $78.32 per share

- 2022-12: $76.04 per share

- 2023-01: $74.55 per share

- 2023-02: $73.68 per share

- 2023-03: $79.24 per share

- 2023-04: $78.46 per share

- 2023-05: $77.28 per share

- 2023-06: $81.46 per share

- 2023-07: $82.82 per share

- 2023-08: $77.27 per share

- 2023-09: $73.68 per share

- 2023-10: $74.18 per share

- 2023-11: $74.94 per share

- 2023-12: $71.84 per share

- 2024-01: $68.90 per share

- 2024-02: $68.33 per share

- 2024-03: $74.73 per share

- 2024-04: $73.65 per share

- 2024-05: $78.86 per share

- 2024-06: $76.38 per share

- 2024-07: $85.59 per share

- 2024-08: $87.52 per share

- 2024-09: $88.59 per share

- 2024-10: $87.81 per share

- 2024-11: $93.70 per share

- 2024-12: $84.77 per share

- 2025-01: $86.96 per share

- 2025-02: $92.54 per share

- 2025-03: $95.25 per share

- 2025-04: $95.18 per share

- 2025-05: $91.23 per share

- 2025-06: $89.47 per share

- 2025-07: $90.62 per share

- 2025-08: $89.36 per share

- 2025-09: $89.66 per share

- 2025-10: $88.52 per share

- 2025-11: $90.86 per share

- 2025-12: $88.70 per share

- 2026-01: $93.56 per share

- 2026-02: $100.30 per share

- 2026-03: $100.75 per share

- 2026-04: $103.72 per share

- 2026-05: $99.74 per share

- 2026-06: $107.00 per share

- 2026-07: $100.99 per share

- 2026-08: $97.64 per share

- 2026-09: $93.04 per share

- 2026-10: $101.58 per share

## Annual estimated value (USD per share)

- FY2016: low $9.36 per share, central $10.65 per share, high $12.36 per share

- FY2020: low $1.11 per share, central $1.28 per share, high $1.49 per share

- FY2021: low $38.28 per share, central $45.20 per share, high $52.59 per share

- FY2022: low $48.37 per share, central $57.24 per share, high $66.61 per share

- FY2023: low $51.71 per share, central $63.40 per share, high $73.92 per share

- FY2024: low $59.13 per share, central $74.16 per share, high $86.57 per share

- FY2025: low $58.66 per share, central $73.51 per share, high $85.80 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/764622/000076462226000011/pnw-20251231.htm); period 2025-12-31, filed 2026-02-25.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.

## Reported holder observations