📊 AES Key Takeaways
Is Aes Corp. (AES) a Good Investment?
AES Corp exhibits critical financial distress signals with interest coverage of 0.3x, indicating inability to service debt from operating income. Negative free cash flow of -$565M combined with deteriorating EPS (-46.6%) despite positive net income growth reveals structural cash burn masked by accounting profitability.
AES shows weak underlying earnings quality despite stable revenue and net income, with an extremely thin 0.8% operating margin and just 0.1x interest coverage indicating limited buffer against financing and operating pressure. Cash generation from operations is solid, but heavy capital spending drives materially negative free cash flow, while sub-1.0x liquidity ratios and a small equity base reduce financial flexibility.
Aes Corp. Key Strengths (AES)
- Positive operating cash flow of $1.2B demonstrates underlying business generates cash
- Net profit margin of 15.3% shows profitability at bottom line despite operational constraints
- Large asset base of $52.8B and gross margins of 20.1% reflect established market position
- Strong operating cash flow generation of $4.31B
- Net income remained positive and slightly grew year over year
- Large asset base and essential-power business can support long-duration infrastructure cash flows
AES Stock Risks: Aes Corp. Investment Risks
- Critical interest coverage of 0.3x indicates inability to cover interest obligations from operating income - severe default risk
- Negative free cash flow of -$565M after capex suggests unsustainable cash burn requiring external financing
- Current ratio of 0.73x and quick ratio of 0.65x indicate acute liquidity pressure and potential covenant violations
- EPS decline of 46.6% with only 1.1% net income growth reveals significant shareholder dilution masking underlying weakness
- Minimal operating margin of 3.0% leaves insufficient buffer for operational disruptions
- Operating profitability is very weak, with only $96M of operating income on $12.23B of revenue
- Free cash flow is deeply negative due to heavy capital expenditure needs
- Liquidity is tight with current and quick ratios below 1.0x, and interest coverage is extremely low
Key Metrics to Watch
- Interest coverage ratio trend - must improve above 2.0x to indicate solvency recovery
- Free cash flow sustainability - negative FCF is unsustainable without capital raises or asset sales
- Debt maturity schedule and refinancing needs given liquidity constraints
- Operating cash flow stability - deterioration would signal core business weakness
- Free cash flow and capital expenditure intensity
- Operating margin and interest coverage
Aes Corp. (AES) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The current ratio below 1.0x warrants monitoring of short-term liquidity.
AES Profit Margin, ROE & Profitability Analysis
AES vs Services Sector: How Aes Corp. Compares
How Aes Corp. compares to Services sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Aes Corp. Stock Overvalued? AES Valuation Analysis 2026
Based on fundamental analysis, Aes Corp. appears fundamentally strong relative to the Services sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Aes Corp. Balance Sheet: AES Debt, Cash & Liquidity
AES Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Aes Corp.'s revenue has grown significantly by 14% over the 5-year period, indicating strong business expansion. The most recent EPS of $0.35 reflects profitable operations.
AES Revenue Growth, EPS Growth & YoY Performance
AES Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $2.9B | $46.0M | $0.07 |
| Q3 2025 | $3.3B | $504.0M | $0.71 |
| Q2 2025 | $2.9B | -$49.0M | $-0.08 |
| Q1 2025 | $2.9B | $46.0M | $0.07 |
| Q3 2024 | $3.3B | $231.0M | $0.32 |
| Q2 2024 | $2.9B | -$39.0M | $-0.06 |
| Q2 2022 | $2.7B | $28.0M | $0.04 |
| Q1 2022 | $2.6B | $115.0M | $0.16 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Aes Corp. Dividends, Buybacks & Capital Allocation
AES SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Aes Corp. (CIK: 0000874761)
📋 Recent SEC Filings
❓ Frequently Asked Questions about AES
What is the AI rating for AES?
Aes Corp. (AES) has a Combined AI Grade of C from Claude (C) and ChatGPT (C) with 74% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are AES's key strengths?
Claude: Positive operating cash flow of $1.2B demonstrates underlying business generates cash. Net profit margin of 15.3% shows profitability at bottom line despite operational constraints. ChatGPT: Strong operating cash flow generation of $4.31B. Net income remained positive and slightly grew year over year.
What are the risks of investing in AES?
Claude: Critical interest coverage of 0.3x indicates inability to cover interest obligations from operating income - severe default risk. Negative free cash flow of -$565M after capex suggests unsustainable cash burn requiring external financing. ChatGPT: Operating profitability is very weak, with only $96M of operating income on $12.23B of revenue. Free cash flow is deeply negative due to heavy capital expenditure needs.
What is AES's revenue and growth?
Aes Corp. reported revenue of $3.2B.
Does AES pay dividends?
Aes Corp. pays dividends, with $125.0M distributed to shareholders in the trailing twelve months.
Where can I find AES SEC filings?
Official SEC filings for Aes Corp. (CIK: 0000874761) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is AES's EPS?
Aes Corp. has a diluted EPS of $0.68.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.
What is AES's fundamental grade?
Based on our AI fundamental analysis in June 2026, Aes Corp. has a C grade with 74% confidence. Review the strengths and risks sections above for full context. This is not investment advice.
Is AES stock overvalued or undervalued?
Valuation metrics for AES: ROE of 11.0% (sector avg: 16%), net margin of 15.3% (sector avg: 10%). Compare these metrics with sector averages to assess valuation.
What is AES's AI grade for 2026?
Our dual AI analysis gives Aes Corp. a combined C grade for 2026. Revenue is data pending, with profitability above sector average. Always conduct your own research.
What is AES's free cash flow?
Aes Corp.'s operating cash flow is $1.2B, with capital expenditures of $1.8B. FCF margin is -17.8%.
How does AES compare to other Services stocks?
Vs Services sector averages: Net margin 15.3% (avg: 10%), ROE 11.0% (avg: 16%), current ratio 0.73 (avg: 1.5).