Stock Analysis & Valuation Good Energy Group PLC (GOOD.L)

• Previous Close: £489.00
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, £	Upside, %
Artificial intelligence (AI)	151.69	-69
Intrinsic value (DCF)	108.35	-78
Graham-Dodd Method	2.69	-99
Graham Formula	1.79	-100

Strategic Investment Analysis

Company Overview

Good Energy Group PLC (LSE: GOOD.L) is a leading UK-based renewable energy company specializing in the purchase, generation, and sale of electricity from sustainable sources such as wind and solar. Founded in 1999 and headquartered in Chippenham, the company operates in the Renewable Utilities sector, providing clean energy solutions to consumers and businesses. Good Energy also offers gas supply, micro-renewable generation services, and EV market data, positioning itself as a diversified player in the green energy transition. With a strong commitment to sustainability, the company supports the UK’s net-zero ambitions by investing in renewable infrastructure and fostering energy independence. Its vertically integrated model—spanning generation, supply, and ancillary services—enhances resilience in a volatile energy market. Good Energy’s focus on customer-centric renewable solutions makes it a key contender in the UK’s evolving utilities landscape.

Investment Summary

Good Energy Group presents a niche investment opportunity in the UK renewable utilities sector, with a market cap of ~£90.5M (GBp). The company reported £254.7M in revenue and £2.9M net income for FY2023, alongside a diluted EPS of 0.17p. Its low beta (0.406) suggests relative stability compared to broader markets, while a dividend yield of 3p/share may appeal to income-focused investors. Strengths include a diversified renewable portfolio and strong operating cash flow (£20.3M), but risks include exposure to regulatory changes and competition from larger utilities. The modest net income and debt load (£6.2M) warrant caution, though its cash position (£41.3M) provides liquidity. Investors should weigh its growth potential in the UK’s decarbonization drive against margin pressures in the crowded renewables space.

Competitive Analysis

Good Energy Group competes in the UK’s fragmented renewable utilities market, differentiating itself through a vertically integrated model that combines generation (wind/solar) and retail supply. Its focus on 100% renewable sourcing appeals to eco-conscious consumers, a niche underserved by traditional utilities. However, its small scale limits economies of scale compared to giants like SSE or Centrica, which benefit from diversified assets and deeper pockets. Good Energy’s competitive edge lies in its agility and brand reputation for sustainability, but it faces pricing pressure from larger rivals leveraging nuclear and fossil-fuel backups. The company’s EV data services and micro-generation offerings provide ancillary revenue streams, though these segments are nascent. Regulatory support for renewables in the UK aids growth, but policy shifts (e.g., subsidy reductions) could disproportionately impact smaller players. Its low debt and strong cash position mitigate financial risk, but scalability remains a challenge against competitors with broader infrastructure.

Major Competitors

• SSE PLC (SSE.L): SSE is a UK energy giant with a vast portfolio including renewables, thermal generation, and grid assets. Its scale and diversified revenue streams (e.g., offshore wind projects like Dogger Bank) dwarf Good Energy’s operations. However, SSE’s reliance on non-renewable assets and complex regulatory exposure contrasts with Good Energy’s pure-play renewables focus.
• National Grid PLC (NG.L): National Grid dominates UK energy transmission and distribution, offering stability but limited renewable generation. Its infrastructure monopoly provides steady cash flows, unlike Good Energy’s retail-focused model. While National Grid invests in grid decarbonization, it lacks Good Energy’s direct consumer engagement in renewable supply.
• Centrica PLC (CNA.L): Centrica, parent of British Gas, combines renewable and fossil-fuel retail supply. Its customer base and brand recognition overshadow Good Energy, but its mixed-energy approach lacks the latter’s sustainability appeal. Centrica’s financial heft allows for aggressive pricing, pressuring smaller rivals like Good Energy.
• Ecotricity Group Ltd (ECEL.L): A private competitor, Ecotricity mirrors Good Energy’s 100% renewable model but focuses more on grassroots activism and green gas. Its lack of public financials makes direct comparison difficult, but its niche marketing (e.g., ‘Vegan Energy’) competes for similar eco-conscious consumers.