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What this page is: Delvantic's full research page for TxnM Energy Inc. (TXNM) — AI-driven forensic equity research: mechanical valuation models (DCF, EPV, anchored-PE, scenario) plus three independent AI lenses (Quality / Value / Sentiment). Everything below is rendered server-side; you are not missing content that requires JavaScript. All scores are predictions and research opinions, not financial advice.
Our current read (analysis of 2026-08-23): Designation Low · Gem Score -65 (−100…+100 Quality+Value blend) · Quality -50 · Value -77 · Sentiment -15 (timing only, not weighted) · Composite fair value $39.64 vs $57.97 at analysis
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profile-header/price-overview— company profile, live quote, market capextended-analysis— the core: three AI lens reads with findings, scores, and the analyst memofuture-predictions— our forward price-band predictionsmarket-narrative/ai-findings/gpt-critique— narrative context, cross-model findings, and an adversarial critique of our own analysis (near the end of the document)- Members-only sections (render as login gates for anonymous readers):
price-history,income-trend,key-metrics,financials(statement tables),insider-trading. The analysis above is public; the raw data tables require a free account.
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TxnM Energy Inc.
TXNM NYSETxnM Energy Inc. is a diversified energy company involved in the exploration, production, and distribution of energy resources. Specializing in both fossil fuels and renewable energy, the company plays a crucial role in supplying power to various sectors including industrial, residential, and commercial markets. TxnM Energy Inc. is actively engaged in the development of sustainable energy solutions, aligning with the global shift towards reduced carbon emissions. This dual approach of traditional and alternative energy production positions the company within significant discussions about energy transition, impacting both local economies and international energy policies. Through its integrated operations, TxnM Energy Inc. contributes to ensuring energy security and stability, reflecting the broader dynamics of global energy supply and demand.
Price Overview
Price History (1 Year)
Revenue & Net Income Trend
| Period | Revenue | Net Income | Net Margin | YoY/QoQ |
|---|
Key Metrics
EPS (Diluted): 1.48
Total Equity: $3.46B
Shares: 102,392,000
Total Debt: $5.42B
Cash: $18.26M
EBITDA: $924.56M
Total Debt: $5.42B
Cash: $18.26M
Revenue: $2.17B
Revenue: $2.17B
Revenue: $2.17B
Total Equity: $3.46B
Tax Rate: 5.7%
Equity: $3.46B
Total Debt: $5.42B
Cash: $18.26M
Current Liabilities: $1.02B
Long-Term Debt: $5.12B
Total Debt: $5.42B
Total Equity: $3.46B
Shares: 102,392,000
Shares: 102,392,000
CapEx: -$1.20B
Shares: 102,392,000
Stock Price: $57.97
Net Income: $169.83M
Industry Benchmarks
Income Statement (Annual)
Last updated: Jul 30, 2026 6:26pm (24d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $1.8B | $2.2B | $1.9B | $2.0B | $2.2B |
| Cost of Revenue | $1.1B | $1.5B | $1.3B | — | — |
| Gross Profit | $648.9M | $740.5M | $655.8M | — | — |
| Operating Expenses | $340.8M | $346.7M | $424.5M | $247.1M | $274.5M |
| Operating Income | $308.2M | $393.8M | $231.3M | $453.5M | $441.2M |
| Net Income | $211.8M | $185.2M | $106.9M | $258.7M | $169.8M |
| EBITDA | $628.4M | $734.9M | $585.0M | $876.5M | $924.6M |
| EPS | $2.28 | $1.97 | $1.02 | $2.67 | $1.49 |
| EPS (Diluted) | $2.27 | $1.97 | $1.02 | $2.67 | $1.48 |
Balance Sheet (Annual)
Last updated: Jul 30, 2026 6:18pm (24d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Cash & Equivalents | $1.1M | $4.1M | $2.2M | $4.5M | $18.3M |
| Total Current Assets | $324.6M | $411.0M | $475.5M | $498.8M | $564.7M |
| Total Assets | $8.7B | $9.3B | $10.3B | $11.2B | $12.1B |
| Current Liabilities | $664.2M | $890.4M | $1.2B | $1.8B | $1.0B |
| Long-Term Debt | $3.5B | $3.9B | $4.2B | $4.3B | $5.1B |
| Total Liabilities | $6.4B | $7.0B | $7.8B | $8.6B | $8.6B |
| Total Equity | $2.2B | $2.3B | $2.4B | $2.6B | $3.5B |
| Retained Earnings | $810.2M | $828.9M | $787.1M | $887.6M | $866.9M |
Cash Flow (Annual)
Last updated: Jul 30, 2026 6:26pm (24d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Operating Cash Flow | $547.9M | $567.3M | $551.2M | $508.2M | $584.5M |
| Capital Expenditure | -$935.0M | -$912.6M | -$1.1B | -$1.2B | -$1.2B |
| Free Cash Flow | -$387.1M | -$345.3M | -$524.6M | -$738.9M | -$611.4M |
| Acquisitions (net) | — | — | — | — | — |
| Net Debt Issued / (Repaid) | $405.0M | $378.5M | $448.1M | $413.5M | $503.1M |
| Dividends Paid | -$113.0M | -$119.8M | -$126.7M | -$140.3M | -$163.4M |
| Stock Buybacks | -$10.1M | -$8.0M | -$9.6M | -$8.5M | -$12.0M |
| Net Change in Cash | -$46.8M | $3.0M | $-135,000 | $18.1M | $9.9M |
Growth Trends (YoY %)
Last updated: Jul 30, 2026 6:26pm (24d ago)| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue Growth | +26.4% | -13.8% | +1.7% | +9.9% |
| Gross Profit Growth | +14.1% | -11.4% | — | — |
| Operating Income Growth | +27.8% | -41.2% | +96.0% | -2.7% |
| Net Income Growth | -12.6% | -42.3% | +142.1% | -34.4% |
| EBITDA Growth | +17.0% | -20.4% | +49.8% | +5.5% |
Dividend History (Last 20)
Last updated: Jul 23, 2026 9:45pm (30d ago)| Date | Dividend | Declaration | Record | Payment |
|---|---|---|---|---|
| 2026-04-27 | $0.42 | — | — | — |
| 2026-01-30 | $0.42 | — | — | — |
| 2025-10-24 | $0.41 | — | — | — |
| 2025-08-08 | $0.41 | — | — | — |
| 2025-04-25 | $0.41 | — | — | — |
| 2025-01-31 | $0.41 | — | — | — |
| 2024-10-28 | $0.39 | — | — | — |
| 2024-07-26 | $0.39 | — | — | — |
| 2024-04-25 | $0.39 | — | — | — |
| 2024-02-01 | $0.39 | — | — | — |
| 2023-10-26 | $0.37 | — | — | — |
| 2023-08-10 | $0.37 | — | — | — |
| 2023-04-27 | $0.37 | — | — | — |
| 2023-02-02 | $0.37 | — | — | — |
| 2022-10-26 | $0.35 | — | — | — |
| 2022-08-16 | $0.35 | — | — | — |
| 2022-04-28 | $0.35 | — | — | — |
| 2022-02-11 | $0.35 | — | — | — |
| 2021-10-29 | $0.33 | — | — | — |
| 2021-08-05 | $0.33 | — | — | — |
Deep Analysis
Narrative Economics
market-narrative step).
Claude Reading
Looking at the raw numbers first: TXNM generated $2.17B revenue in 2025, up 10% YoY, but net income *fell* from $258.7M to $169.8M — a 35% earnings decline masked by the top-line growth. The quarterly pattern is telling: Q3 2025 delivered $136.3M NI (21% margin) vs Q1 2026 at just $8.0M NI (1.6% margin) and Q4 2025 at a $5.3M loss. This is not smooth earnings — regulated utilities should not swing from 21% to -1% margins quarter to quarter unless there are rate case timing effects or one-time items. Q3 2024 was similarly $136.4M — so the September quarter is doing essentially all the annual heavy lifting. Strip out Q3 and TTM earnings are anemic. On the balance sheet: $5.42B debt against $18.3M cash and $584.5M OCF means net debt/OCF near 9.2x, FCF is *negative $611M* after $1.2B capex, and payout ratio is 96%. The dividend is being funded by debt issuance. Current ratio 0.55 confirms working capital stress.
The synthesis verdict of $40 fair value vs $58 price (~31% overvalued) looks directionally correct but the models are being too polite about *why*. ROE of 4.9% and ROIC of 4.7% are below the cost of debt in this rate environment — this utility is destroying economic value on incremental capital, not creating it. A P/E of 39x on a business earning sub-5% ROIC with a 96% payout is genuinely bizarre. The Market Narrative layer's claim of a "20-25% narrative premium for renewable growth optionality" is generous — I read closer to 45% pure multiple expansion with no earnings support. The Pre-Flight note that peers trade at 15-20x P/E is the right anchor; at 17x mid-cycle earnings of ~$210M (normalizing the Q3-heavy pattern), fair value is ~$32-36 per share, *below* the $40 DCF, not above it.
The contrarian case: TXNM is New Mexico's PNM Resources rebranded, and there's a pending acquisition context here that the models are entirely missing — Avangrid agreed to acquire PNM/TXNM at roughly $61.25/share (the deal was announced in 2024). That would explain the persistent premium to fundamentals: this isn't a growth or narrative premium, it's *merger arbitrage*. Current price of $57.97 sitting ~5% below a $61.25 deal price is exactly what you'd expect if the market assigns ~80-85% probability to close, with downside to ~$40 fundamental value if the deal breaks. Every model here — synthesis, market forces, narrative — treats this as a standalone valuation problem and misses what is almost certainly the actual price-setter. If I'm right about the deal context, the "overvalued" verdict is technically true on fundamentals but operationally wrong: the stock is a deal spread trade, not a valuation trade.
Where the data is thin: insider transactions are all A-Awards (grants, not open-market buys) with unnamed insiders and future-dated (2026-06-10 already past?) — these are compensation, not signal. FCF CAGR is missing. The Q3 seasonality is unexplained. And critically, no model surfaced the Avangrid deal status, which is the *only* variable that matters here. If the deal is still live, this stock trades on regulatory approval odds (NM PRC has previously blocked it — that's the real risk). If the deal is dead, the stock should already have retraced to ~$40. The fact that it hasn't suggests either the deal is alive or the market is slow. I lean toward: partial dissent from the synthesis. Standalone DCF of $40 is defensible, but treating a merger target as a standalone equity misses the setup. The right trade is either (a) buy at $58 if you think the deal closes at $61+ (5-6% spread, event-driven) or (b) short only if you believe the deal breaks and the market hasn't priced it — a much harder call.
GPT Reading
What stands out is not “utility stability” but how thin the actual earnings base is relative to the price being paid. At $57.97, TXNM is worth $6.42B on a business that produced just $169.8M of net income in 2025 and only $8.0M in the most recent quarter. Even allowing for the seasonality and lumpiness common in regulated utilities, the trailing quarterly pattern is weak: revenue rose from $482.8M to $505.0M year over year in the March quarter, but net income fell from $12.8M to $8.0M, taking margin down from 2.7% to 1.6%. Full-year revenue improved 10% from $1.97B to $2.17B, yet operating income slipped from $453.5M to $441.2M and net income dropped 34% from $258.7M to $169.8M. That is the core contradiction: top-line and capex are moving up, but current profitability is not following through.
The balance sheet and cash flow profile make that contradiction more important, not less. Debt is $5.42B against just $18.3M of cash, with debt-to-equity at 1.57x and a current ratio of 0.55x. Operating cash flow of $584.5M looks serviceable on its own, but the business spent $1.20B on capex, leaving free cash flow at negative $611.4M. For a regulated utility, negative FCF is not automatically alarming if it is funding rate-base growth, but investors are already paying a premium multiple before that growth has shown up in earnings. A 39.2x P/E, 12.8x EV/EBITDA and 2.74x sales for a company earning 4.9% ROE and 4.7% ROIC is rich. The 2.9% dividend yield does not compensate much for waiting, and the 96% payout ratio means the dividend is being supported by a profit stream that currently has little cushion.
The quarterly earnings shape also argues against giving management the benefit of the doubt yet. Two September quarters each delivered roughly $136M of profit on strong margins above 21%, while the surrounding quarters were far less impressive, including a loss in December 2025. That suggests this is not a smooth compounding utility earning profile but one with episodic items, seasonal concentration, or regulatory timing effects that can flatter annual numbers. If I normalize away the unusually strong September quarter and focus on the rest of the year, the stock looks even more expensive than the headline 39x earnings implies. On book value, 1.7x is not absurd for a quality regulated utility, but this company’s returns on that equity base are too low to justify a premium to the sector. I think the market is capitalizing hoped-for future rate-base earnings today while ignoring that the present economics are still mediocre.
The best counterargument is straightforward: utilities are often lousy on free cash flow during heavy investment cycles, and that can be exactly when they should look expensive on current earnings. TXNM’s revenue has recovered from $1.94B in 2023 to $2.17B in 2025, operating cash flow is a respectable $584.5M, and the large capex plan could be laying the groundwork for materially higher allowed earnings in future rate cases. If that happens, today’s 39x P/E is a mirage based on depressed current earnings rather than a true reflection of long-run earning power. The fact that operating income stayed above $440M in 2025 despite margin pressure suggests the underlying utility engine is not broken. And unlike cyclical companies, regulated utilities can often carry high debt and weak liquidity because the cash flows are durable and financing markets generally remain open to them.
I still weigh those positives less heavily because the market is not offering much room for execution error. For me to change my mind, I would need to see the investment cycle convert into earnings fast: annual net income moving decisively back above $240M, ROE rising toward 7%-8%, and operating income growing rather than shrinking as revenue expands. I would also want evidence that capex is translating into less stressed funding, either through free cash flow improving toward breakeven or at least a clearer stabilization in leverage rather than debt growing off a $5.42B base. If the next few quarters show recurring profitability outside the outsized September spike, this could justify a utility premium. Until then, the stock looks priced for benefits that remain prospective.
Grok Reading
The numbers tell a straightforward and uncomfortable story: TxnM is a leveraged regulated utility running a large negative free-cash-flow machine while the market awards it a growth multiple it has not earned. Annual revenue climbed from $1.97B in 2024 to $2.17B in 2025 (+10%), and the trailing revenue CAGR of 5.7% looks respectable, but net income collapsed from $258.7M to $169.8M—a 34% drop that leaves the stock at 39× trailing earnings. That multiple sits roughly double the traditional utility band of 15–20×. Operating cash flow of $584M is real, yet capex of $1.20B produced free cash flow of –$611M; the company is funding both its rate-base build-out and a 96% payout ratio almost entirely with incremental debt. Balance-sheet stress is visible in plain sight: $5.42B of debt against $18M of cash, a current ratio of 0.55, and ROE/ROIC stuck at 4.9% and 4.7%. Quarterly results reinforce the fragility—Q4 2025 swung to a $5.3M loss and Q1 2026 produced only $8M of net income on $505M of revenue—showing that the high-margin third quarter is doing almost all the annual heavy lifting. At $57.97 the equity is pricing a seamless energy-transition optionality story; the cash-flow and return metrics price a mature earner that is destroying more cash than it generates.
The valuation composite at roughly $40 is directionally correct. EV/EBITDA of 12.8× is not extreme on its face for a utility, but it is expensive once you normalize for the fact that EBITDA is being purchased with heavy leverage and negative FCF. The 2.9% dividend yield looks ordinary until you notice it is essentially debt-financed. Insider activity is pure award and option-exercise noise—no open-market buying to signal conviction at these levels. Revenue confidence is labeled “good” yet the quarterly trend is already decelerating; the 9.9% recent revenue growth is not translating into earnings or cash returns for equity holders.
The strongest contrary case is that regulated utilities are valued on rate-base growth, not trailing FCF, and the $1.2B capex program is precisely the mechanism that expands the allowed equity return base. If regulators grant timely recovery and the renewable/grid investments earn their allowed ROE, today’s negative FCF is simply the front-end cost of a larger future earnings stream; the 39× multiple would then compress naturally as earnings catch up. Bulls can also point to the operating margin still printing above 20% annually and to the structural scarcity of regulated cash-flow streams in a higher-rate world. I weigh this less heavily because the current ROE of 4.9% already sits well below any plausible allowed return, suggesting either regulatory lag, cost overruns, or earnings quality issues that the rate-base story has not yet cured. A 96% payout while FCF is deeply negative also leaves almost no internal equity to fund the very growth the multiple is discounting, raising dilution or further leverage risk.
I would reverse to neutral or constructive only if two things appear in the next two to three prints: (1) trailing twelve-month free cash flow moves decisively toward breakeven or positive while capex remains elevated, proving rate recovery is keeping pace, and (2) net income stabilizes above $220–240M so that the forward P/E falls into the low-20s without a price collapse. A material debt reduction or a current ratio sustainably above 1.0 would also remove the refinancing overhang that currently caps upside.
Big-3 Panel — where each AI stands
Advanced Analysis Forensic deep-dive · separate lenses
TXNM is a regulated electric utility (PNM/TNMP) showing the classic mature-utility pattern: revenue drifting from 1.78B in 2021 to 2.17B in 2025, operating margins in the high teens to low 20s, and net income oscillating between 107M and 259M. OCF/NI at 3.24x and negative accruals (-3.6% of assets) suggest reported earnings are of reasonable quality and backed by cash from operations. That is the healthy side of the ledger.
Verify before trusting this (6)
- Regulated rate-base growth plan and approved ROE across PNM (NM) and TNMP (TX) jurisdictions
- Status and terms of the Blackstone Infrastructure Partners acquisition (announced 2024) including closing conditions
- Debt maturity ladder and coverage ratios (FFO/debt, interest coverage) which are the standard utility credit metrics beyond Altman Z
- Detail on 2024 net income spike (23% op margin) - was it a rate-case true-up or non-recurring item
- Composition of the 12M share increase in 2025 - ATM issuance, forward equity, or acquisition currency
- Wildfire and regulatory liability exposure in New Mexico
The e2e synthesis pins deserved value at roughly $39-40 (composite $39.34, signal-adjusted $40.04), with an EPV floor of $46.95 and an anchored P/E of $31.72. Against a $57.97 price, that is a ~30% overvaluation on the composite and still ~19% above the more generous EPV floor. Even taking the friendliest input at face value, the stock is not cheap; taking the average, it is meaningfully rich. The Company-Quality lens flags a stretched balance sheet (Altman Z 0.8), chronic 500-700M cash burn, and 4.4% annual dilution - all of which argue for a LOWER deserved multiple, not a higher one, because per-share compounding leaks to new shares and interest. Earnings quality is decent, so no further haircut, but nothing here justifies paying above the EPV floor. What is priced in: timely, generous rate-case outcomes on a large renewables capex program, stable political backdrop, and no stranded-asset write-downs. That is the bull case as the base case. Any regulatory lag, ROE compression, or capex overrun collapses the gap between price and deserved value quickly. This is a fully-priced regulated utility, not a mispricing opportunity.
Verify before trusting this (4)
- Upcoming rate-case outcomes and allowed ROE across service territories
- Capex trajectory and regulatory recovery timing on renewables build-out
- Any M&A/take-private chatter - utilities occasionally get bid premiums that distort spot price vs FV
- Interest expense trajectory given leverage and rate environment
The market is in a nascent risk-off state (VIX 20.7, S&P -3.9% off highs) with a hostile rates backdrop (10y 4.61%, market PE 26.2). For most equities that is a real headwind, but TXNM's beta of 0.17 means the broad tape presses on this name with a fraction of the force it exerts on cyclicals or story stocks. Regulated utilities are traditionally a defensive hide-out in stress regimes, which partially offsets the drag. Net-net, the macro landing on THIS ticker is muted, not decisive. The narrative is a platform-monopoly / energy-transition story of moderate intensity and moderate durability with low cult following - not a mania, not a collapse. The bull case (regulated renewables capex, inflation hedge) is intact but nothing is actively re-rating it upward; the bear case (stranded fossil risk, hostile rate cases, ~20-25% narrative premium over DCF) is dormant but present. With rates elevated, the utility bond-proxy trade is under mild structural pressure - high 10y yields compete directly with regulated-utility dividend appeal, which is the single most stock-specific headwind here. Momentum is quietly positive (multi-year improving trend, deleveraging), which suggests the tape has not turned on the name.
Verify before trusting this (4)
- Any pending rate case decisions or regulatory rulings in service territories
- 10y Treasury direction - a break higher would intensify the utility bond-proxy headwind
- Rotation flows into defensive utilities if the risk-off regime deepens beyond nascent
- Analyst target revisions post any capex or renewables project update
This lens hasn't been run for this ticker yet.
When we made this prediction on Aug 1, 2026, TXNM was $57.92. We expect it to be $52.90 by Feb 2027, and we consider it great value under $42.00. This is an early model (v0.6.0) — the direction is more reliable than the exact price. Made Aug 1, 2026.
Blue is our prediction, starting the day we made it. Grey is a slower route to the same place — the same destination, taking longer. Black is the actual price, so you can see how we are doing.