The Southern Company (SO) Stock Analysis
Score DValue · Grade D · Bullish
$94.58
$85.88
-9.2%
3/10
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: $85.88 (-9.2%). Approximately at fair value.
PEG-Based EPS
$68.62
FCF DCF Model
$109.62
EV/EBITDA
$64.91
Blended Fair Value
$85.88
Confidence
High
Methods
PEG-Based EPS, FCF 2-Stage DCF, EV/EBITDA
Quality Analysis
42/120 points
Low Quality
ROE (3Y Avg)
12.7%
ROIC-WACC Spread
-1.1%
D/E Ratio
1.8x
Current Ratio
0.7x
Interest Coverage
2x
FCF Positive Years
1/3
Quality Flags
- ROIC spread: -1.2pp (got 0/25 pts)
- FCF positive only 1/3 years (7/20 pts)
- Leverage: D/E 1.8x (6/15 pts)
- Interest coverage: 2.2x (6/10 pts)
- Liquidity: Current Ratio 0.65 (3/10 pts)
- Volatile gross margins: std dev 8.2pp (need <3.0pp)
Market Sentiment
Wall Street Consensus
$103.00
+8.9% Upside
19 analysts
Range: $76.00 — $112.00
Rating: Hold
Our model is more cautious than Wall Street.
Trend & Technical
Price ($94.57) is 3.8% above SMA 200 ($91.10). Bullish trend confirmed.
Tech Score 90/100 — MOMENTUM ALIGNMENT. Healthy uptrend confirmed by RSI and MACD. Technical tailwind.
Risk & Reward
Asymmetry Ratio
2.12:1
Expected Return
+7.1%
Bull Upside
+34.1%
Bear Downside
-16.1%
Good asymmetry: 2.12:1 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 SO?
Based on our multi-method conviction analysis, the estimated fair value of The Southern Company (SO) is $85.88. 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 high.
Is SO a buy, sell, or hold?
SO currently has a AVOID rating with a conviction score of 3/10. Low quantitative score: Low quality, stretched valuation, or poor risk/reward. Quantitative score: weak.
Is SO a high-quality stock?
The Southern Company has a quality grade of D (42/120 points), rated as Low Quality. Key metrics include ROE of 12.7%, ROIC-WACC spread of -1.1%, and D/E ratio of 1.8x.
What type of stock is SO?
SO is classified as a "value" in our framework. High dividend: 3.1%, Mature growth: -0.6%, High debt: D/E 1.8x, Large cap: $106.6B, Dividend paying: 3.1%
What do Wall Street analysts say about SO?
19 Wall Street analysts have a consensus price target of $103.00 for SO, representing +8.9% upside. Targets range from $76.00 to $112.00. The consensus recommendation is "Hold". Our model is more cautious than Wall Street.
What are the risks of investing in SO?
The risk/reward asymmetry ratio for SO is 2.12:1, rated as Favorable. Good asymmetry: 2.12:1 ratio. Upside justifies risk. The expected return is +7.1%, with bull case upside of +34.1% and bear case downside of -16.1%.
What is the current trend for SO?
SO is in a bullish trend. Price ($94.57) is 3.8% above SMA 200 ($91.10). Bullish trend confirmed. The technical score is 90/100.
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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.