2 models fit TXNM Energy Inc. Common Stock and they disagree: 0 of 2 land within 15% of the average.
Two or more of our models back this value.
Large discount(i)Silver69
Valued as a utility: P/E comparison and EV/EBITDA comparison.
ACCE opinionTXNM Energy Inc. Common Stock (TXNM)
Fair value (2 models)
$77.41
ACCE price target
$58.50
Rating
Undervalued
Horizon
12 months
Fair value published on 19 Oct 2026, 18:04 CEST; previously $81.90 since 15 Oct 2026, 00:00 CEST.
ACCE price target published on 10 Oct 2026, 00:00 CEST.
Rating published on 19 Oct 2026, 18:04 CEST.
Price used: $58.27 at the close on 23 Oct 2026, 22:00 CEST.
Models: P/E comparison and EV/EBITDA comparison.
Fair value: the average of the applicable valuation models (discounted cash flow, multiples, residual income, dividend discount, shareholder yield), each run on the latest financial statements and the market price shown. Opinion columns (fair value, target, rating) are shown apart from the data. Full methodology: acceinvestments.com/data/how-we-value-stocks
Conflicts of interest: The author holds no personal position in this security. General statement
Produced by ACCE Investments (acceinvestments.com)
Data
Price vs fair value
24.7% below
+32.8% to fair value
ACCE score
62
out of 100
Analysts
20% buy
5 covering
P/E
33.6x
forward 18.0x
1-year return
+2.2%
Dividend yield
2.86%
TXNM Energy Inc. Common Stock in four questions
Plain answers, details below
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Overview
ACCE thesis
TXNM Energy, the holding company for PNM Resources' utilities, runs regulated electric service in New Mexico and Texas, along with natural gas distribution in New Mexico, and it earns a return on the rate base its regulators approve. That structure is the advantage here: the franchise is monopoly-protected and capital spending on grid and generation converts into earnings growth on a predictable schedule. Revenue grew 9.2% and the forward P/E of 18.0 sits well below the trailing 33.6, which implies the market expects earnings to catch up as the current capital program flows through rates. The thesis depends on that earnings ramp and on regulators allowing returns that lift ROE well above today's 6.3%, which is thin for a utility of this size. At a 6.4B market cap with no index membership, the name is off the radar for many larger holders, so it deserves a look at whether the rate case outcomes support the forward numbers.
⚠ Investor warnings · 3 flagsAI-assisted·How I use AI
moderate
Negative free cash flow
Free cash flow is $-611.4M against a $6.4B market cap. The business is spending well beyond operating cash generation, likely on capital projects, so equity funding or future debt may be needed.
moderate
Heavy valuation on trailing earnings
Trailing P/E of 33.6 sits well above the forward P/E of 18.0, so the stock looks expensive on reported profit. Earnings YoY of +190.9% is a rebound from a weak base and may not repeat.
moderate
Quarterly revenue slipping
Revenue fell 5.3% quarter over quarter even though full-year revenue grew 9.2%. The sequential decline is worth watching for whether it reflects a softer trend.
AI research notes
AI-assisted·How I use AIWritten Oct 19, 2026 · figures from 2026-06-30 · prices to Oct 23, 2026
Why it could do well
Revenue grew 9.2% year over year, ahead of its 7.3% average yearly pace over the last five years.
The stock trades at 18.0x forward earnings, below the sector median of 19.8x, and pays a 2.9% dividend yield.
Why it could disappoint
Free cash flow over the last twelve months was negative at -$611M, so the business is spending more than it generates.
Return on equity of 6.3% and return on invested capital of 3.6% are thin for the capital being deployed.
Diluted share count rose 13.0% last fiscal year, diluting existing holders while analysts' mean target of $60.70 sits only 3.7% above the price.
Each chip shows the exact figure and where it comes from. A claim without a source is not published.
Next results
Oct 30, 2026
We update the fair value about 2 days after the results, once the new figures are filed.Add to calendarGoogle
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Valuation
INVESTOR
Where TXNM's valuation models land
Price
$58.27
Model fair value
$77.41
Model range
$52.74 to $102
Fair value $77.41
Price $58.27
The price sits inside the model range.
Model
Fair value
Upside
EV/EBITDA comparison
P/E comparison
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Quality
INVESTOR
Quality and conviction INVESTOR FEATURE
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