Regulated Electric · NYSE
Current Price
$74.73
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on CMS Energy Corporation with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
CMS Energy Corporation operates as an energy company primarily in Michigan. The company operates through three segments: Electric Utility; Gas Utility; and Enterprises. The Electric Utility segment is involved in the generation, purchase, transmission, distribution, and sale of electricity. This segment generates electricity through coal, wind, gas, renewable energy, oil, and nuclear sources. Its distribution system comprises 208 miles of high-voltage distribution overhead lines; 4 miles of high-voltage distribution underground lines; 4,428 miles of high-voltage distribution overhead lines; 19 miles of high-voltage distribution underground lines; 82,474 miles of electric distribution overhead lines; 9,395 miles of underground distribution lines; 1,093 substations; and 3 battery facilities. The Gas Utility segment engages in the purchase, transmission, storage, distribution, and sale of natural gas, which includes 2,392 miles of transmission lines; 15 gas storage fields; 28,065 miles of distribution mains; and 8 compressor stations. The Enterprises segment is involved in the independent power production and marketing, including the development and operation of renewable generation. It serves 1.9 million electric and 1.8 million gas customers, including residential, commercial, and diversified industrial customers. The company was incorporated in 1987 and is headquartered in Jackson, Michigan.
ROIC (TTM)
-94.3%
ROE (TTM)
11.2%
FCF Yield
-4.33%
Based on trailing twelve-month data, CMS shows a free cash flow per share of N/A and a ROIC of -94.3%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of -4.33% are important context metrics when evaluating CMS's stock valuation relative to peers.
The intrinsic value of CMS 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 CMS is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $74.73. 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 CMS Energy 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 Regulated Electric industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting CMS'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 CMS Energy Corporation, this means projecting how much free cash flow the Regulated Electric will produce over the next 5-10 years, then discounting those amounts to today's dollars. CMS's ROIC of -94.3% 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 CMS, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
