As of April 4, 2026, CMS Energy Corp's estimated intrinsic value ranges from $55.58 to $108.57 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $108.57 | +38.2% |
| Discounted Cash Flow (5Y) | $74.11 | -5.7% |
| Dividend Discount Model (Multi-Stage) | $63.65 | -19.0% |
| Dividend Discount Model (Stable) | $55.58 | -29.3% |
| Earnings Power Value | $102.14 | +30.0% |
Is CMS Energy Corp (CMS) undervalued or overvalued?
With the current market price at $78.58, the stock appears to be fairly valued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate CMS Energy Corp's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.37 | 0.5 |
| Cost of equity | 5.6% | 7.7% |
| Cost of debt | 4.3% | 5.1% |
| Tax rate | 18.7% | 19.5% |
| Debt/Equity ratio | 0.81 | 0.81 |
| After-tax WACC | 4.6% | 6.1% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $74 | $41,098M | 81.1% |
| 10-Year Growth | $109 | $51,656M | 69.3% |
| 5-Year EBITDA | $70 | $39,911M | 80.6% |
| 10-Year EBITDA | $102 | $49,766M | 68.2% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $2,612M |
| Discount Rate (WACC) | 6.1% - 4.6% |
| Enterprise Value | $43,068M - $56,303M |
| Net Debt | $18,389M |
| Equity Value | $24,679M - $37,914M |
| Outstanding Shares | 306M |
| Fair Value | $81 - $124 |
| Selected Fair Value | $102.14 |
| Metric | Value |
|---|---|
| Market Capitalization | $24078M |
| Enterprise Value | $42467M |
| Trailing P/E | 22.48 |
| Forward P/E | 22.87 |
| Trailing EV/EBITDA | 6.70 |
| Current Dividend Yield | 283.91% |
| Dividend Growth Rate (5Y) | 6.83% |
| Debt-to-Equity Ratio | 0.81 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $32.57 |
| Discounted Cash Flow (5Y) | 25% | $18.53 |
| Dividend Discount Model (Multi-Stage) | 20% | $12.73 |
| Dividend Discount Model (Stable) | 15% | $8.34 |
| Earnings Power Value | 10% | $10.21 |
| Weighted Average | 100% | $82.38 |
Based on our comprehensive valuation analysis, CMS Energy Corp's intrinsic value is $82.38, which is approximately 4.8% above the current market price of $78.58.
Key investment considerations:
Given these factors, we believe CMS Energy Corp is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.