Long-established in the Utilities - Regulated industry, Exelon Corp (EXC, Financial) has enjoyed a stellar reputation. However, it has recently witnessed a daily loss of 2.63%, juxtaposed with a three-month change of 2.45%. Fresh insights from the GF Score hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of Exelon Corp.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 3/10
- Profitability rank: 7/10
- Growth rank: 2/10
- GF Value rank: 9/10
- Momentum rank: 4/10
Based on the above method, GuruFocus assigned Exelon Corp the GF Score of 68 out of 100, which signals poor future outperformance potential.
Understanding Exelon Corp's Business
Exelon Corp serves approximately 10 million power and gas customers at its six regulated utilities in Illinois, Pennsylvania, Maryland, New Jersey, Delaware, and Washington, D.C. With a market cap of $37.77 billion and sales of $22.21 billion, the company maintains an operating margin of 18.56%. This snapshot of Exelon Corp's business operations and history provides a backdrop for understanding its financial nuances and market position.
Financial Strength Breakdown
Exelon Corp's financial strength indicators present some concerning insights about the company's balance sheet health. The interest coverage ratio of 2.3 positions it worse than 73.52% of 457 companies in the Utilities - Regulated industry. This ratio highlights potential challenges the company might face when handling its interest expenses on outstanding debt. Additionally, the company's Altman Z-Score of just 0.73 suggests potential financial distress, and its cash-to-debt ratio at 0.02 indicates struggles in managing existing debt levels. The debt-to-Ebitda ratio of 5.71 further underscores this concern.
Growth Prospects
A lack of significant growth is another area where Exelon Corp seems to falter. The company's revenue has declined by -13.6% per year over the past three years, underperforming 95.23% of 503 companies in the Utilities - Regulated industry. This stagnation may pose concerns in a fast-evolving market. Additionally, the three-year growth rate of EBITDA at -9.5%, and a five-year rate at -7.5%, highlight profitability challenges. Exelon Corp's predictability rank of one star out of five adds to investor uncertainty regarding revenue and earnings consistency.
Conclusion
Considering Exelon Corp's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential underperformance. Investors seeking more robust opportunities may explore other companies with stronger GF Scores using the GF Score Screen available to GuruFocus Premium members.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
