Intrinsic Value IDACORP, Inc. (IDA)

• Previous Close: $125.36
• Intrinsic Value: $13.39
• Upside potential: -89%

Stock Valuation Context

Business Model And Market Position

IDACORP, Inc. operates as a holding company for Idaho Power, a regulated electric utility serving over 600,000 customers in southern Idaho and eastern Oregon. The company generates revenue primarily through the sale of electricity, with its operations heavily influenced by regulatory frameworks that determine rate structures and capital recovery. Idaho Power’s service area benefits from a diverse energy mix, including hydroelectric, natural gas, coal, and renewable sources, which provides cost stability and environmental compliance. The utility holds a monopolistic position in its service territory, supported by long-term regulatory agreements that ensure predictable cash flows. Its market position is further strengthened by investments in grid modernization and renewable energy projects, aligning with regional decarbonization goals. As a vertically integrated utility, IDACORP manages generation, transmission, and distribution, giving it control over the entire electricity value chain. The company’s focus on reliability and affordability has cemented its reputation as a dependable provider in a region with growing energy demand.

Revenue Profitability And Efficiency

In FY 2024, IDACORP reported revenue of $1.83 billion and net income of $289.2 million, translating to diluted EPS of $5.50. The company’s operating cash flow stood at $594.4 million, reflecting stable cash generation from its regulated operations. With no reported capital expenditures in the period, the firm maintained strong cash conversion efficiency, typical of a utility with predictable capital deployment cycles.

Earnings Power And Capital Efficiency

IDACORP’s earnings power is underpinned by its regulated utility model, which ensures steady returns on equity. The absence of capital expenditures in the reported period suggests disciplined capital allocation, though this may reflect timing differences in project spending. The company’s ability to generate consistent cash flows supports its dividend payments and debt service obligations.

Balance Sheet And Financial Health

The company held $368.9 million in cash and equivalents against total debt of $3.07 billion, indicating a leveraged but manageable capital structure typical for utilities. Regulatory mechanisms provide cash flow stability, mitigating refinancing risks. The balance sheet remains well-positioned to fund ongoing infrastructure investments without compromising liquidity.

Growth Trends And Dividend Policy

IDACORP’s growth is tied to rate base expansion and regulatory approvals for capital projects. The company paid a dividend of $3.41 per share, reflecting a commitment to returning capital to shareholders. Future growth will likely hinge on renewable energy investments and regional demand trends, supported by a predictable dividend policy.

Valuation And Market Expectations

The market values IDACORP as a low-risk utility with stable earnings, reflected in its dividend yield and P/E ratio. Investors likely price in modest growth from rate increases and renewable projects, balancing regulatory oversight with long-term cash flow visibility.

Strategic Advantages And Outlook

IDACORP’s strategic advantages include its regulated monopoly status, diversified energy portfolio, and proactive grid investments. The outlook remains stable, with growth driven by regulatory support for clean energy transitions and infrastructure upgrades. Risks include regulatory delays and climate-related impacts on hydro generation, though these are partially mitigated by long-term planning.

Sources

Company filings (10-K), investor presentations