Alliant Energy Corp (LNT)

Conclusion

Alliant Energy is a US utility holding company that runs regulated electric and natural gas services in Iowa and Wisconsin. At a price of 73.46 USD on 2026-11-09, its market capitalisation is 19.1 billion USD and its enterprise value is 31.6 billion USD.

The verdict is fair. The price-to-earnings ratio of 20.4x sits close to its ten-year median of 20.8x, a premium of -2.1%. EV to EBITDA of 14.6x stands above its ten-year median of 13.1x, a premium of 11.5%. The fair value band runs from 52.21 to 78.31 USD with a midpoint of 65.26 USD, and the margin of safety is -11.2% at the current price. A discounted cash flow value per share is not available, and neither is the reverse DCF, so the growth implied by the price cannot be set against the growth delivered. Delivered growth is 5.0% a year in revenue and 4.6% in EPS over five years.

Two numbers support the case. Operating margin is 22.6% against a ten-year median of 21.7%, and net margin is 20.7% against a median of 16.8%. The dividend yield is 2.9%. Two numbers weigh on it. Free cash flow over the trailing twelve months is negative, with a conversion of -223.7%. Net debt to EBITDA is 5.79x and interest coverage is 2.25x, so debt service absorbs a large share of operating earnings.

Financial health

Financial strength is red because four measures are assessed bad: the Altman Z-score, net debt to EBITDA, interest coverage and the current ratio. The current ratio is 0.51 and the quick ratio is 0.22. Debt to equity stands at 1.61, net debt to EBITDA at 5.79x and interest coverage at 2.25x. The Altman Z-score is 1.16, which falls in the distress zone. That model was designed for manufacturers, and this company is not one, so the zone is only a rough guide. Insolvency risk: low, about 1.6% by the estimate of the Ohlson model over one to two years.

Earnings quality

Earnings quality is red because free cash flow conversion is assessed bad, although the Piotroski score is neutral at 5 of 9. Conversion is -223.7% over the trailing twelve months and -65.0% over five years. The accrual ratio is -1.5%. The company does not report its stock-based compensation, so free cash flow after that cost cannot be fully measured. Free cash flow after stock-based compensation is -2.09 billion USD. The share count grew by 0.7% a year over five years, so there are no net buybacks. The Beneish M-score is not available. The company beat estimates in six of the last eight quarters, with an average surprise of 6.7%. Next year's estimates were cut over the last 90 days by 0.15%, with six downward revisions against two upward in the last 30 days.

Profitability

Profitability is green because the margins are assessed good and sit above their ten-year medians. Gross margin is 43.5% against a median of 40.4%. Operating margin is 22.6% against a median of 21.7%, and net margin is 20.7% against a median of 16.8%. Operating margin stability is 9.3%. ROIC is 6.3% against a WACC of 7.3%, a ROIC minus WACC of -1.0%, which is neutral. The five-year median ROIC is 6.4%. Return on equity is 12.0%. The DuPont split shows a net margin of 18.6%, an asset turnover of 0.169 and an equity multiplier of 3.52x, so leverage carries much of the return to shareholders.

Growth

Growth is yellow because revenue growth has been consistent but its pace is modest. Revenue compounds at 1.2% over three years, 5.0% over five and 3.0% over ten. EPS compounds at 4.8% over three years, 4.6% over five and 6.2% over ten. Revenue grew in seven of the ten comparable years. The next-year EPS estimate implies growth of 7.1%, which is above the recent three-year record of 4.8%.

Valuation

Valuation is yellow because the verdict is fair, but the margin of safety is negative and enterprise multiples sit above their history. The price-to-earnings ratio is 20.4x against a median of 20.8x, a premium of -2.1%. EV to EBITDA is 14.6x against a median of 13.1x, a premium of 11.5%. Price to sales is 4.23x against a median of 3.31x, a premium of 27.9%. Price to book is 2.44x against a median of 2.31x, a premium of 5.5%. The fair value band runs from 52.21 to 78.31 USD, and the fair value from historical multiples is 65.26 USD. The discounted cash flow value is not available because free cash flow is negative, although the model uses a discount rate of 8.9% and a terminal growth rate of 2.5%. The reverse DCF is not available. The dividend yield is 2.85%. A payout ratio on free cash flow cannot be calculated while free cash flow is negative. The fair value is built on fixed assumptions, including a 5% equity risk premium, and is not a price target.

Risks

The main risk is that negative free cash flow means the company must fund its dividend and investment from outside cash, which keeps debt high. A net debt to EBITDA of 5.79x and interest coverage of 2.25x leave little room for weaker earnings. A current ratio of 0.51 adds pressure on short-term obligations. Several values are not available: the discounted cash flow value, the reverse DCF, stock-based compensation, the Beneish M-score and the payout ratio on free cash flow. This analysis also lacks a debt maturity schedule and revenue by segment, so refinancing timing and the regulated and non-regulated mix cannot be assessed.