Diversified Utilities · NYSE
Current Price
$14.45
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on The AES Corporation with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
The AES Corporation operates as a diversified power generation and utility company. It owns and/or operates power plants to generate and sell power to customers, such as utilities, industrial users, and other intermediaries. The company also owns and/or operates utilities to generate or purchase, distribute, transmit, and sell electricity to end-user customers in the residential, commercial, industrial, and governmental sectors; and generates and sells electricity on the wholesale market. It uses a range of fuels and technologies to generate electricity, including coal, gas, hydro, wind, solar, and biomass; and renewables, such as energy storage and landfill gas. The company owns and/or operates a generation portfolio of approximately 31,459 megawatts. It has operations in the United States, Puerto Rico, El Salvador, Chile, Colombia, Argentina, Brazil, Mexico, Central America, the Caribbean, Europe, and Asia. The company was formerly known as Applied Energy Services, Inc. and changed its name to The AES Corporation in April 2000. The AES Corporation was incorporated in 1981 and is headquartered in Arlington, Virginia.
ROIC (TTM)
1.7%
ROE (TTM)
20.4%
FCF Yield
-15.75%
Based on trailing twelve-month data, AES shows a free cash flow per share of N/A and a ROIC of 1.7%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of -15.75% are important context metrics when evaluating AES's stock valuation relative to peers.
The intrinsic value of AES depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether AES is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $14.45. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on The AES Corporation: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Diversified Utilities industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting AES's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For The AES Corporation, this means projecting how much free cash flow the Diversified Utilities will produce over the next 5-10 years, then discounting those amounts to today's dollars. AES's ROIC of 1.7% suggests the company may face challenges generating returns above its cost of capital.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For AES, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
