NextEra Energy, Inc. (NEE) Intrinsic Value & DCF Valuation
Regulated Electric · NYSE
Current Price
$88.46
Intrinsic Value
Use the calculator below to estimate
COMPETITIVE MOAT
↑Regulated Monopoly Infrastructure
NEE operates as a regulated utility, granting it exclusive rights to serve specific geographic areas. This prevents direct competition for its core electricity distribution and transmission services.
↑High Capital Intensity
Building and maintaining electric infrastructure requires massive upfront investment. This creates a significant barrier to entry for potential competitors seeking to replicate NEE's network.
↑Long-Term Contracts
NEE secures long-term power purchase agreements with renewable energy projects. These contracts provide predictable revenue streams and insulate it from short-term energy price volatility.
INVESTMENT RISKS
↓Extreme Weather Events
NEE's infrastructure is vulnerable to damage from hurricanes, wildfires, and other severe weather. Such events can lead to significant repair costs and service disruptions.
↓Interest Rate Sensitivity
As a capital-intensive business, NEE relies heavily on debt financing. Rising interest rates increase borrowing costs, impacting profitability and investment capacity.
↓Policy and Environmental Regulations
Changes in government policies regarding renewable energy mandates, carbon emissions, and environmental standards can affect NEE's operational costs and strategic direction.
Customize the NEE valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for NextEra Energy, Inc. respond.
Open DCF Calculator for NEECompany Overview
NextEra Energy, Inc., operating through its diverse subsidiaries, is a prominent electric power provider in North America. The company's operations encompass the generation, transmission, distribution, and sale of electricity to both individual consumers and large-scale wholesale clients. Its energy portfolio is broad, featuring power generation from wind, solar, nuclear, coal, and natural gas facilities. Beyond direct power supply, NextEra Energy is actively involved in developing, constructing, and managing long-term contracted clean energy infrastructure, including renewable energy generation sites, battery storage solutions, and electric transmission networks. The firm also participates in the sale of energy commodities and oversees the development, construction, and operation of generation assets within competitive wholesale energy markets. As of December 31, 2021, NextEra Energy boasted a net generating capacity of approximately 28,564 megawatts. Its extensive infrastructure included about 77,000 circuit miles of transmission and distribution lines and 696 substations. Within Florida, the company delivers electricity to roughly 11 million individuals, serving approximately 5.7 million customer accounts across the state's eastern and lower western coastal regions. Founded in 1925, the company adopted its current name, NextEra Energy, Inc., in 2010, having previously operated as FPL Group, Inc. Its corporate headquarters are located in Juno Beach, Florida.
Financial Metrics — NEE Stock Valuation Data
Revenue/Share (TTM)
$13.89
FCF/Share (TTM)
$-4.87
ROIC (TTM)
4.0%
ROE (TTM)
16.8%
P/FCF
n/m
EV/EBITDA
10.9x
FCF Yield
-5.52%
Debt/Equity
0.20x
NEE currently has negative free cash flow, so cash-flow ratios such as P/FCF and FCF yield do not give a meaningful read on whether the stock is cheap or expensive. A DCF valuation is unreliable until cash generation turns positive — focus on the path to profitability instead.
Frequently Asked Questions
What is the intrinsic value of NEE?
NextEra Energy, Inc. currently generates $-4.87 in free cash flow per share. At the current price of $88.46, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is NEE undervalued?
NEE currently has negative free cash flow, so its P/FCF ratio is not meaningful and cannot tell you whether the stock is cheap or expensive. With cash flow negative, a DCF-based undervalued or overvalued judgment is unreliable — look at the path back to positive cash generation instead.
How do I value NEE stock using DCF?
To perform a DCF valuation on NextEra Energy, Inc.: (1) Start with the trailing free cash flow per share ($-4.87) 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 NEE's risk profile — with a debt-to-equity of 0.20x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to NEE?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For NextEra Energy, Inc., this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Regulated Electric trends, then discounting those amounts to today's dollars. NEE's ROIC of 4.0% means the company's return on invested capital sits below the level that typically clears its cost of capital.
How does WACC affect NEE stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For NEE, with a debt-to-equity ratio of 0.20x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 10.9x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See NEE PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Utilities valuationsDCF and P/E value NEE with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-07-29. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.