CMS Energy Corporation (CMS) Stock Analysis
Score DValue · Grade D · Bullish
$73.06
$72.14
-1.3%
2/10
D
Value
Investment Thesis
Low quantitative score: Low quality, stretched valuation, or poor risk/reward.
For New Investors
Quantitative score: weak
For Current Holders
Quantitative score: low
Buy if
- Price drops 15-20% (improves asymmetry)
- Bull scenario catalysts materialize
- Market-wide correction creates opportunity
Sell if
- Bear scenario triggers occur
- Quality metrics deteriorate (ROIC declining)
- Better alternatives emerge
Valuation
Fair Value estimate: $72.14 (-1.3%). Approximately at fair value.
PEG-Based EPS
$58.23
FCF DCF Model
$94.98
EV/EBITDA
$38.99
Blended Fair Value
$72.14
Confidence
Medium
Methods
PEG-Based EPS, FCF 2-Stage DCF, EV/EBITDA
Quality Analysis
41/120 points
Low Quality
ROE (3Y Avg)
11.9%
ROIC-WACC Spread
-1.2%
D/E Ratio
2.1x
Current Ratio
1.0x
Interest Coverage
2x
FCF Positive Years
0/3
Quality Flags
- ROIC spread: -1.2pp (got 0/25 pts)
- FCF positive only 0/3 years (0/20 pts)
- Leverage: D/E 2.1x (5/15 pts)
- Interest coverage: 2.2x (6/10 pts)
- Volatile gross margins: std dev 11.2pp (need <3.0pp)
Market Sentiment
Wall Street Consensus
$80.50
+10.2% Upside
14 analysts
Range: $79.00 — $83.00
Rating: Buy
Our model is more cautious than Wall Street.
Trend & Technical
Price ($73.01) is 0.7% above SMA 200 ($72.50). Bullish trend confirmed.
Tech Score 73/100 — Strong technical setup. Trend, momentum, and positioning aligned bullish.
Risk & Reward
Asymmetry Ratio
2.48:1
Expected Return
+9.0%
Bull Upside
+37.0%
Bear Downside
-14.9%
Good asymmetry: 2.48:1 ratio. Upside justifies risk.
Verdict: Favorable
Scenario Analysis
Bear
Base
Bull
Buy Zone & Action Plan
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AI Executive Summary
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Technical Analysis
RSI, MACD, moving averages, trend signals, and momentum indicators.
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Frequently Asked Questions
What is the fair value of CMS?
Based on our multi-method conviction analysis, the estimated fair value of CMS Energy Corporation (CMS) is $72.14. This is calculated by blending PEG-Based EPS, FCF 2-Stage DCF, EV/EBITDA and applying a quality premium of 0% based on the company's fundamentals. The confidence level of this estimate is medium.
Is CMS a buy, sell, or hold?
CMS currently has a AVOID rating with a conviction score of 2/10. Low quantitative score: Low quality, stretched valuation, or poor risk/reward. Quantitative score: weak.
Is CMS a high-quality stock?
CMS Energy Corporation has a quality grade of D (41/120 points), rated as Low Quality. Key metrics include ROE of 11.9%, ROIC-WACC spread of -1.2%, and D/E ratio of 2.1x.
What type of stock is CMS?
CMS is classified as a "value" in our framework. High dividend: 3.0%, Mature growth: -1.5%, High debt: D/E 2.1x, Dividend paying: 3.0%, Consistent FCF: 3/3 years positive
What do Wall Street analysts say about CMS?
14 Wall Street analysts have a consensus price target of $80.50 for CMS, representing +10.2% upside. Targets range from $79.00 to $83.00. The consensus recommendation is "Buy". Our model is more cautious than Wall Street.
What are the risks of investing in CMS?
The risk/reward asymmetry ratio for CMS is 2.48:1, rated as Favorable. Good asymmetry: 2.48:1 ratio. Upside justifies risk. The expected return is +9.0%, with bull case upside of +37.0% and bear case downside of -14.9%.
What is the current trend for CMS?
CMS is in a bullish trend. Price ($73.01) is 0.7% above SMA 200 ($72.50). Bullish trend confirmed. The technical score is 73/100.
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Last updated: May 19, 2026 · Framework version 3.7
This analysis is for informational purposes only and should not be considered financial advice. Always do your own research before making investment decisions.