Investment Thesis
AES Corp exhibits concerning financial deterioration with collapsing profitability metrics, negative free cash flow, and severely strained liquidity despite high asset base. The company is burning cash while generating minimal operating income and faces substantial refinancing risk with weak interest coverage.
AES Strengths
- Strong operating cash flow of $4.3B demonstrates underlying operational efficiency in collections
- Substantial asset base of $51.8B provides infrastructure and revenue generation capacity
- Maintained positive net income of $910M despite operational headwinds
AES Risks
- Negative free cash flow of -$1.6B indicates capital expenditures ($5.9B) far exceed operational cash generation, unsustainable long-term
- Critical liquidity crisis with current ratio of 0.77x and quick ratio of 0.69x below safe operating thresholds
- Operating margin collapsed to 0.8% with interest coverage at 0.1x, indicating inability to service debt from operations
- EPS declined 46.6% YoY while dilution continued, suggesting significant shareholder value destruction
- Revenue flat to declining with margin compression across gross, operating, and net metrics
Key Metrics to Watch
- Free cash flow trajectory and path to positive generation
- Operating margin expansion or further compression
- Current ratio improvement and working capital management
- Debt refinancing activities and interest coverage ratio
AES Financial Metrics
Revenue
$12.2B
Net Income
$910.0M
EPS (Diluted)
$1.26
Free Cash Flow
$-1.6B
Total Assets
$51.8B
Cash Position
$1.4B
AES Profitability Ratios
Gross Margin
18.1%
Operating Margin
0.8%
Net Margin
7.4%
ROE
22.4%
ROA
1.8%
FCF Margin
-13.3%
AES Balance Sheet & Liquidity
Current Ratio
0.77x
Quick Ratio
0.69x
Debt/Equity
0.00x
Debt/Assets
0.0%
Interest Coverage
0.07x
Long-term Debt
N/A
AES Growth Metrics (YoY)
Revenue Growth
N/A
Year-over-year
Net Income Growth
N/A
Year-over-year
EPS Growth
N/A
Earnings per share
FCF Margin
-13.3%
Free cash flow / Revenue
AES Capital Allocation
Operating Cash Flow
$4.3B
Cash generated from operations
Capital Expenditures
$5.9B
Investment in assets
Dividends Paid
$501.0M
Returned to shareholders
AES SEC Filings
Access official SEC EDGAR filings for AES CORP (CIK: 0000874761)
Disclaimer: This analysis is generated by Claude AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research and consult with a qualified financial advisor before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: Mar 19, 2026 |
Data as of: 2025-12-31 |
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