CMS Energy Corporation (CMS) Stock Valuation — PE Analysis
Regulated Electric · NYSE
Current Price
$74.22
PE Ratio (TTM)
20.2x
Intrinsic Value
$83.96
+11.6% margin of safety
COMPETITIVE MOAT
↑Regulated Monopoly Power
CMS Energy operates as a regulated utility, granting it a de facto monopoly in its service territories. This insulates it from direct competition and ensures a stable customer base.
↑Essential Service Demand
Electricity is a non-discretionary service, meaning demand remains relatively inelastic even during economic downturns. This provides a consistent revenue stream for CMS Energy.
↑Long-Term Infrastructure Assets
The company's extensive network of power generation, transmission, and distribution assets represents a significant barrier to entry for potential competitors. These are long-lived, capital-intensive assets.
INVESTMENT RISKS
↓Regulatory Uncertainty
Changes in state and federal regulations can impact CMS Energy's ability to recover costs and earn a fair return on investment. New rules could increase operating expenses or limit revenue growth.
↓Capital Expenditure Needs
Significant ongoing investment is required to maintain and upgrade aging infrastructure and to meet evolving energy demands. Delays or cost overruns in these projects can strain finances.
↓Interest Rate Sensitivity
As a capital-intensive utility, CMS Energy relies on debt financing. Rising interest rates increase borrowing costs, potentially impacting profitability and dividend capacity.
Base case
CMS base case PE valuation
A base case PE valuation for CMS estimates a fair value of about $83.96 per share, against a current price of $74.22. The model assumes 7.8% annual earnings growth, a 20x target PE multiple, and a 10% discount rate.
Intrinsic Value
$83.96
Margin of safety
+11.6%
Expected annual return
+2.5%
Base case assumptions: 7.8% annual earnings growth, 20x target PE, 10% discount rate, 5 year projection. Data as of 2026-06-15.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the CMS PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for CMS Energy Corporation respond.
Open PE Calculator for CMSCompany Overview
CMS Energy Corporation (CMS) operates as a significant utility provider with its primary services concentrated in Michigan. The company's business is structured into three main divisions: Electric Utility, Gas Utility, and Enterprises. The Electric Utility segment encompasses the full spectrum of electricity operations, from generating power using a variety of sources—including coal, wind, natural gas, renewable energies, oil, and nuclear—to its subsequent purchase, transmission, distribution, and sale to customers. Its extensive electrical grid is supported by approximately 4,636 miles of high-voltage overhead distribution lines, 23 miles of high-voltage underground distribution lines, an additional 82,474 miles of electric overhead distribution lines, and 9,395 miles of underground distribution lines. This vast network also includes 1,093 substations and 3 battery storage facilities. The Gas Utility division is responsible for procuring, transmitting, storing, distributing, and selling natural gas. This segment's infrastructure features 2,392 miles of transmission pipelines, 15 natural gas storage fields, 28,065 miles of distribution mains, and 8 compressor stations. The Enterprises segment specializes in independent power generation and energy marketing, particularly focusing on the development and operation of renewable energy projects. CMS Energy serves a considerable customer base, providing electricity to 1.9 million clients and natural gas to 1.8 million clients, spanning residential, commercial, and diverse industrial sectors. The company was established in 1987 and its corporate headquarters are situated in Jackson, Michigan.
Financial Metrics — CMS PE Stock Valuation Data
PE Ratio (TTM)
20.2x
PEG Ratio
2.52
Earnings Yield
4.96%
ROE (TTM)
12.3%
Revenue/Share (TTM)
$29.35
Dividend Yield
3.00%
Debt/Equity
2.02x
Frequently Asked Questions
What is the PE ratio of CMS?
The trailing twelve-month PE ratio of CMS reflects how much investors pay per dollar of CMS Energy Corporation's earnings. This metric is most useful when compared to Regulated Electric peers and the company's own historical range.
Is CMS overvalued based on PE ratio?
CMS's PE of 20.2x combined with a PEG ratio of 2.52 provides a growth-adjusted perspective. A PEG above 2.0 suggests CMS may be richly valued even accounting for growth. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Regulated Electric, a DCF analysis may be more appropriate.
How do I value CMS stock using PE ratio?
To value CMS Energy Corporation using PE: (1) Compare the current PE (20.2x) against the Regulated Electric median to assess relative pricing, (2) check the PEG ratio (2.52) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of CMS?
CMS's PEG ratio is 2.52, calculated by dividing the PE ratio (20.2x) by the expected earnings growth rate. A PEG above 2.0 often signals the stock is priced aggressively relative to its growth trajectory. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for CMS stock valuation?
PE ratio gives a quick relative read — how CMS is priced versus Regulated Electric peers. DCF provides an absolute value based on projected free cash flows. For the most reliable valuation, use PE as a quick comparability screen and DCF for a deeper fundamental analysis. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See CMS DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Utilities valuationsP/E and DCF value CMS with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-06-15. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.