Sempra (SRE) Intrinsic Value & DCF Valuation
Diversified Utilities · NYSE
Current Price
$92.29
Intrinsic Value
Use the calculator below to estimate
COMPETITIVE MOAT
↑Regulated Utility Monopoly
Sempra operates regulated utilities in California and Texas, granting it exclusive service territories. This regulatory structure creates significant barriers to entry for competitors.
↑Essential Infrastructure Ownership
The company owns and operates critical energy infrastructure like pipelines and power grids. These assets are vital for regional energy delivery and are difficult and costly to replicate.
↑LNG Export Growth Potential
The successful launch of ECA LNG Phase 1 positions Sempra to capitalize on growing global demand for liquefied natural gas. This expansion diversifies revenue and taps into a high-growth market.
INVESTMENT RISKS
↓Activist Investor Pressure
Voss Capital's push to spin off the Oncor unit creates uncertainty and potential strategic disruption. This could lead to management distraction and impact long-term planning.
↓Regulatory and Rate Changes
Sempra's utility operations are subject to government regulation and potential rate adjustments. Changes in policy or customer affordability concerns could impact profitability.
↓Climate and Extreme Weather
The company's infrastructure is exposed to the risks of extreme weather events, such as heatwaves. Maintaining grid reliability and investing in resilience requires significant capital expenditure.
Customize the SRE valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Sempra respond.
Open DCF Calculator for SRECompany Overview
Sempra, an energy holding company founded in 1998 and headquartered in San Diego, California, conducts its operations both domestically and internationally. The firm adopted its current name in July 2021, having previously been known as Sempra Energy. Through its San Diego Gas & Electric Company division, Sempra delivers electricity to approximately 3.6 million individuals and natural gas to roughly 3.3 million individuals across a 4,100 square mile service area. The Southern California Gas Company segment manages an extensive natural gas network, encompassing distribution, transmission, and storage infrastructure, which supplies gas to an estimated 22 million people within a 24,000 square mile territory. Furthermore, Sempra's Texas Utilities division specializes in the regulated transmission and distribution of electrical power, serving 3.8 million residential and commercial customers. This segment oversees 140,000 miles of transmission and distribution lines, including 18,249 circuit miles of transmission lines and 1,174 transmission and distribution substations. It also features interconnections to 130 third-party power generation facilities with a combined capacity of 45,403 megawatts.
Financial Metrics — SRE Stock Valuation Data
Revenue/Share (TTM)
$20.82
FCF/Share (TTM)
$-8.94
ROIC (TTM)
2.7%
ROE (TTM)
6.5%
P/FCF
n/m
EV/EBITDA
14.4x
FCF Yield
-9.69%
Debt/Equity
1.13x
SRE 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 SRE?
Sempra currently generates $-8.94 in free cash flow per share. At the current price of $92.29, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is SRE undervalued?
SRE currently has negative free cash flow, so its P/FCF ratio is not meaningful and cannot tell you whether the stock is cheap or expensive. With cash flow negative, a DCF-based undervalued or overvalued judgment is unreliable — look at the path back to positive cash generation instead.
How do I value SRE stock using DCF?
To perform a DCF valuation on Sempra: (1) Start with the trailing free cash flow per share ($-8.94) 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 SRE's risk profile — with a debt-to-equity of 1.13x, 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 SRE?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Sempra, this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Diversified Utilities trends, then discounting those amounts to today's dollars. SRE's ROIC of 2.7% suggests the company may face challenges generating returns above its cost of capital.
How does WACC affect SRE stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For SRE, with a debt-to-equity ratio of 1.13x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 14.4x, 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 SRE 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 SRE with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.