US Equities Analysis

CMS — CMS Energy

Research evidence pack

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2. Company Fundamentals

2.1 Competitiveness

Metric Value
Operating Margins 19.82%
Profit Margins 12.55%
Return on Equity 10.37%
Return on Assets 3.13%
Free Float 0.31B
Dividend Yield 2.96%
Short Int % Utilisation 0.0%

2.2 Growth

Metric Value
Revenue Growth 11.6%
Free Cash Flow -2.16B
EBITDA 13.91 (Ratio)
Enterprise Value 42.41B
EV/Revenue 4.81
EV/EBITDA 13.91

Revenue growth of 11.6% indicates steady, moderate expansion.

2.3 Management

Role Metric
Consensus Rating N/A

2.4 Return

Metric Value
Expected Return (Ann.)* 2.92%
Risk / Std Dev (Ann.)* 17.07%
1-Year Price Return* 1.43%

Latest Market Data (as of 2026-08-14, US Eastern time):

Metric Value
Last Price $71.11
52-Week Range $68.64 – $80.36
Observation Count 251 trading days

The return and risk statistics use daily adjusted closes from the retrieved one-year series and annualise daily moments using 252 trading days. The last price is the latest regular-market price reported for the stated date. Source: Yahoo Finance market data.

2.5 FCFF DCF Valuation

Valuation basis: This research model follows a five-year, unlevered FCFF DCF. It starts from reported annual operating inputs, forecasts revenue and operating cash conversion under an explicit mechanical policy, discounts FCFF at WACC, applies a Gordon-growth terminal value, and bridges enterprise value to an indicative common-equity value per share. It is an analytical estimate rather than a recommendation or personalised target price.

Step 1 — Forecast Operating Profit and NOPAT

Reported operating input Value
Revenue $8.54B
Prior annual revenue $7.51B
EBIT $2.05B
Tax rate 19.70%
NOPAT = EBIT × (1 − tax rate) $1.64B
Forecast start-growth basis 13.63%
Forecast policy latest reported annual revenue growth, bounded to -10.00% / 15.00%

Step 2 — Calculate FCFF

Current FCFF building block Value
NOPAT $1.64B
Add: depreciation & amortisation $1.31B
Less: capital expenditure -$4.04B
Less/(add): working-capital cash-flow movement -$61.00M
Current unlevered FCFF -$1.15B

Explicit FCFF forecast

Forecast year Revenue growth NOPAT D&A Capex Change in NWC FCFF Present value
1 13.63% $1.87B $1.48B -$4.59B -$69.31M -$1.31B -$1.27B
2 10.84% $2.07B $1.64B -$4.23B -$76.83M -$588.26M -$545.09M
3 8.06% $2.24B $1.78B -$3.64B -$83.02M $293.90M $258.84M
4 5.28% $2.35B $1.87B -$2.85B -$87.41M $1.29B $1.08B
5 2.50% $2.41B $1.92B -$1.92B -$89.59M $2.32B $1.85B

Step 3 — Determine the Discount Rate (WACC)

WACC input Value
Risk-free rate 4.71%
Equity risk premium assumption 5.50%
Beta 0.34
Cost of equity 6.58%
Pre-tax cost of debt 4.50%
WACC 5.21%
WACC validation requires assumption review

Step 4 — Estimate Terminal Value

Terminal-value input Value
Perpetuity growth rate 2.50%
Terminal value $87.81B
Implied terminal EV / EBITDA 17.84x
Terminal value as % of enterprise value 98.03%

Step 5 — Discount Cash Flows to Enterprise Value

Enterprise-value component Value
Present value of explicit FCFF $1.37B
Present value of terminal value $68.11B
Indicated enterprise value $69.48B
Discounting convention mid-year for explicit FCFF; terminal value discounted at year-end five

Step 6 — Convert Enterprise Value to Equity Value

Equity bridge Value
Indicated enterprise value $69.48B
Less: gross interest-bearing debt $18.90B
Add: cash and equivalents $509.00M
Add: affiliate investments $0.00
Less: minority interests $567.00M
Indicated common equity value $50.52B

Step 7 — Calculate Indicative Value Per Share

Per-share output Value
Shares used 306,409,000.00
Share-count basis reported diluted weighted-average shares
Current market price $71.68
DCF indicative value per share $164.88
Indicative value vs. market price 130.03%

Model Integrity Checks

Check Result
Perpetuity growth is below the risk-free rate pass
Perpetuity growth is below WACC pass
WACC is within the configured operating-company range review required
Terminal-year FCFF is positive pass
Terminal capex converges to D&A pass
Terminal-value concentration review required
Implied price differs from spot by more than 30% review required

2.6 Investor-Style Research Screen

Educational screen Result
Buffett-inspired cash-quality checks 0/4 evidenced checks
Lynch-inspired balance-and-growth checks 1/4 evidenced checks

Data lineage: Yahoo Finance public market and reported-statement data; retrieval timestamp: 2026-08-18 17:27:27.772436 UTC; latest reported fiscal period: 2025-12-31 00:00:00. Default assumptions: five-year forecast, mid-year discounting for explicit FCFF, a maximum 2.50% perpetuity-growth rate below both WACC and the risk-free rate, historical operating-ratio persistence, and capex convergence to D&A by year five. No sell-side consensus or management guidance is substituted for reported inputs. This is research and analysis only, not personalized financial advice.

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