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📘 IDACORP INC (IDA) — Investment Overview

🧩 Business Model Overview

IDACORP INC (IDA) is a U.S.-based regulated electric utility holding company headquartered in Boise, Idaho. Through its principal operating subsidiary, Idaho Power Company, IDACORP delivers electricity to a diverse mix of residential, commercial, industrial, and irrigation customers across Idaho and parts of eastern Oregon. The company operates as a vertically integrated utility, owning assets spanning the entire electric value chain, including generation, transmission, and distribution networks. Its resource footprint comprises a blend of hydroelectric, natural gas, coal, and renewable sources, with a historical emphasis on hydropower—a distinguishing feature in terms of both cost and environmental impact. Regulated operations underpin nearly all of IDACORP’s revenue, structured under frameworks approved by state commissions, which govern both pricing and allowed returns on capital invested. The utility’s service territory covers a region characterized by above-average population and economic growth, offering a stable end-market while retaining some growth prospects uncommon for regulated names.

💰 Revenue Streams & Monetisation Model

IDACORP’s revenue generation is predominately tied to electricity sales within its franchised monopoly territory. Revenues are collected under multi-year regulatory rate agreements, reflecting the recovery of operating expenses and a return on invested capital (“rate base”) as determined by state regulators. Key revenue drivers include: - **Retail Electric Rates:** Set through utility rate cases, these form the core of IDACORP’s income, structured to earn a regulated rate of return. - **Usage Volumes:** Demand from residential, commercial, agriculture (notably irrigation), and industrial users influences top-line results. - **Transmission & Miscellaneous Fees:** Supplementary income sources include transmission services for third parties and other permitted utility-related activities. The regulated model provides transparency and predictability, with periodic rate filings allowing cost recovery for invested capital and, in many cases, mechanisms that partly decouple revenue from absolute electricity volumes—mitigating weather or economic variability. IDACORP’s monetization model is thus deeply aligned with the prudently invested assets in its rate base and the evolving, regulatorily-sanctioned tariffs.

🧠 Competitive Advantages & Market Positioning

IDACORP operates in a relatively protected competitive environment, shielded by regulatory-ensured monopolies in its service areas. Several factors reinforce its defensibility and market position: - **Hydroelectric Legacy & Resource Diversity:** A substantial share of self-owned, low-cost hydropower offers an edge in both cost competitiveness and environmental credentials. This portfolio also insulates IDACORP from the full brunt of fossil fuel price volatility and carbon regulation. - **Regulatory Relationships and Constructive Environment:** IDACORP maintains a longstanding positive rapport with state regulators, allowing for predictable rate-making and relatively smooth cost recovery relative to peers in more contentious jurisdictions. - **Operational Scale and Focused Geography:** Dominion over a service area with growing demand, coupled with ownership of its infrastructure, curbs competitive threats and supports efficient expansion. - **Stable Customer Base:** Industrial, commercial, and rapidly growing residential demand undergirds steady load growth, reducing customer concentration risks.

🚀 Multi-Year Growth Drivers

IDACORP’s growth prospects—although muted compared to typical unregulated companies—are underpinned by several robust, multi-year themes: - **Regional Population and Economic Growth:** The company’s Idaho and eastern Oregon footprint witnesses strong demographic inflows and business migration, fueling electricity demand above national peer averages. - **Modernization and Infrastructure Investment:** Ongoing system upgrades, grid hardening, advanced metering, and generation fleet investments expand the rate base, directly driving allowed returns. - **Clean Energy Transition:** State-level decarbonization initiatives and demand for cleaner electricity prompt investment in renewables and grid upgrades, unlocking regulatory capital expenditures and associated earnings growth. - **Load Growth from Irrigation and Data Centers:** Specialized regional drivers, including large-scale irrigation and new high-tech loads (e.g., data centers, high-density users) contribute to incremental demand. - **Rate Base Expansion:** The regulatory framework ties earnings growth to prudent capital deployment, making long-cycle infrastructure investments a reliable earnings lever. IDACORP’s value proposition, anchored in regional growth and ongoing capital investment, positions it to outgrow average utilities with more stagnant territories or less favorable commission environments.

⚠ Risk Factors to Monitor

Despite its defensive profile, IDACORP faces several risks, both common to the regulated utility sector and more specific to its operating region: - **Hydrology Variability:** Given its dependence on hydropower, unusual drought conditions or adverse water flow scenarios pose risks to both generation costs and capacity adequacy. - **Regulatory Risks:** Adverse rulings in future rate cases, changes to allowed returns on equity, or shifting policy priorities could impair earnings visibility. - **Commodity and Environmental Policy Uncertainty:** While partially insulated, the company is still exposed to commodity fuel and purchased power costs, as well as to future carbon regulation or mandates that could impair legacy generation assets. - **Cost Overruns on Capital Projects:** Infrastructure investments may experience delays, overruns, or disallowance for rate recovery, impacting returns. - **Weather and Natural Events:** Severe weather events can disrupt service, damage assets, and escalate operating or capital costs. - **Technological & Market Disruption:** Distributed generation (solar, storage) and evolving customer preferences could gradually erode load or shift cost responsibility.

📊 Valuation & Market View

IDACORP is typically valued in line with regulated utility peers, on both P/E and price-to-book (P/B) bases, reflecting its stable earnings outlook and dividend profile. Investors often assign a moderate premium for IDACORP’s above-average rate base growth, constructive regulatory environment, and favorable demographic backdrop. The company provides a reliable and growing dividend, supported by robust cash flows and conservative payout ratios. Key valuation inputs include projected rate base growth, regulatory relationships, regional economic trends, and the evolving resource mix. The market often rewards companies with predictable returns, stable regulatory regimes, and exposure to growth regions, attributes that generally characterize IDACORP.

🔍 Investment Takeaway

IDACORP stands out as a high-quality, regulated electric utility benefitting from ownership of low-cost hydropower, stable and growing service territory demographics, and a generally constructive regulatory landscape. The company’s intrinsic advantages—rooted in its balanced generation mix, operational efficiency, and strategic regional exposure—position it favorably for prudent, low-risk growth. For long-term investors seeking a blend of capital preservation, steady dividend yield, and moderate earnings growth, IDACORP offers an appealing core utility holding. Key risks warrant monitoring—especially hydrological variability and regulatory changes—but the fundamental investment thesis rests on durable competitive advantages and ongoing regional demand growth. This anchors IDACORP's profile as a resilient, income-generating investment in the North American utilities sector.

⚠ AI-generated — informational only. Validate using filings before investing.

📊 IDACORP, Inc. (IDA) — AI Scoring Summary

📊 AI Stock Rating — Summary

For the quarter ending September 2025, IDA reported revenue of approximately $524.4 million and a net income of $124.4 million, translating to an EPS of $2.3. The company has faced some challenges in cash flow, with a negative free cash flow of $127.9 million, driven mainly by substantial capital expenditure of $290.7 million. Despite this, IDA maintained a healthy net profit margin of about 23.7% and paid out $46.5 million in dividends over the year, indicating solid profitability. However, liquidity is a concern, with cash at $333.2 million showcasing a reliance on debt financing, evident from a net debt of approximately $3.67 billion against total equity of $3.49 billion. Analysts have set the stock's price target up to $157, with median forecasts suggesting valuations around $144, which may infer potential growth opportunities. With no share repurchases but consistent dividends, IDA focuses on steady shareholder returns, although the lack of free cash flow poses a risk in a tighter credit environment.

AI Score Breakdown

Revenue Growth — Score: 5/10

Revenue growth appears stable with total revenue reported at $524.4 million. However, without comparative growth figures, it is difficult to assess pace or drivers.

Profitability — Score: 8/10

Strong profitability with a net margin of 23.7% and an EPS of $2.3, reflecting efficient operations.

Cash Flow Quality — Score: 4/10

Free cash flow is negative $127.9 million due to high capital expenditure. Dividend payments are stable, but the negative FCF suggests a reliance on debt.

Leverage & Balance Sheet — Score: 4/10

High leverage with net debt at $3.67 billion compared to equity of $3.49 billion. Nonetheless, cash reserves of $333.2 million provide some liquidity.

Shareholder Returns — Score: 6/10

Returns rely on dividends totaling $46.5 million. Market performance details missing, but dividend yield and stability offer value despite negative FCF.

Analyst Sentiment & Valuation — Score: 7/10

Analyst targets up to $157 suggest potential upside. The median target of $144 indicates reasonably positive sentiment toward future valuation.

⚠ AI-generated — informational only, not financial advice.

SEC Filings

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