Constellation Energy Corporation (CEG)
OvervaluedFundamental
60
Price
$298.07
Market Cap
$105.61B
Part 1 · What the company is worth
Overview
Constellation Energy owns and operates the largest fleet of nuclear power plants in the United States, about 22 gigawatts, alongside wind, solar and hydroelectric generation. It sells the electricity it produces into wholesale power markets such as PJM and ERCOT, and supplies retail power and gas to roughly 2.5 million residential, commercial and industrial customer accounts, including data centres. In January 2026 it closed the acquisition of Calpine, adding about 23 gigawatts of natural gas and geothermal generation to the fleet.
How it makes money
Revenue comes from selling the electricity the fleet generates: through long-term supply contracts with large customers such as Microsoft, Meta and CyrusOne, through wholesale spot and bilateral market sales, and through regulated retail supply to households and businesses. Because nuclear plants have very high fixed costs but very low costs per extra unit generated once running, profitability depends heavily on the prices locked into those contracts rather than on daily swings in the power market, and swings in wholesale prices still flow through the unregulated part of the business.
Competitive moat
Scale · NarrowBuilding a new nuclear plant in the US takes over a decade and tens of billions of dollars, so Constellation's existing licensed fleet is effectively irreplaceable for the foreseeable future. That scale advantage lets it sign large, multi-decade supply contracts that few competitors could match. It is not a wide moat, though: the company still sells much of its output into competitive wholesale power markets.
What drives demand
Moderately cyclicalElectricity demand is traditionally a stable, defensive driver, but Constellation's growth increasingly comes from a specific and newer source: power-hungry AI data centres signing long-term supply deals. That is a tailwind while it lasts, but it concentrates future growth in the spending plans of a handful of technology companies rather than in broad, diversified electricity consumption across the economy.
Key risks
- Nuclear operating and regulatory risk — Nuclear plants operate under continuous oversight by the Nuclear Regulatory Commission; a safety incident, an unplanned outage, or a stricter licensing requirement at any single plant can be costly and hard to predict.
- Wholesale power price volatility — A meaningful part of output is still sold at market prices rather than under fixed contracts, so swings in natural gas prices, weather and power demand directly move Constellation's unregulated earnings.
- Concentration in large data-centre contracts — Much of the company's growth narrative now rests on long-term deals with a small number of large technology companies; a change in any one of their AI infrastructure plans could alter demand assumptions.
- Integration risk from the Calpine acquisition — The January 2026 purchase of Calpine roughly doubled the company's generating capacity; combining two large power fleets and workforces carries execution risk that a smaller deal would not.
- Energy policy and regulatory change — State and federal rules on emissions, nuclear subsidies and market design can change with little notice, and Constellation's returns depend on policy remaining favourable to the assets it already owns.
Customer concentration
Constellation serves about 2.5 million customer accounts, including roughly four in five Fortune 100 companies, so its retail base is broad. It does not disclose what share of revenue comes from its largest data-centre supply contracts.
The case for
Buyers argue that nuclear power is the only source of large-scale, always-on, carbon-free electricity available today, and that long-term supply deals with AI data-centre operators lock in years of high-value demand for a fleet that cannot realistically be replicated by competitors.
The case against
Sellers fear that growth is increasingly concentrated in a handful of technology customers' AI spending plans, that a large share of output still trades at volatile wholesale prices, and that digesting the Calpine acquisition adds execution risk on top of both.
Written by the editors, published on August 18, 2026
Direct competitors
Who this company fights with for the same customers
Generated on September 18, 2026 with claude-haiku-4-5 — shared with all users
Vistra is the closest match to Constellation's model: a merchant generator with its own nuclear fleet plus gas plants, selling into the same PJM and ERCOT wholesale markets and competing for the same long-term data-center power contracts and competitive retail customers.
Talen sells power from merchant nuclear and gas plants in PJM and has signed its own long-term nuclear supply deal with Amazon Web Services, competing directly with Constellation for hyperscaler demand in the same region.
NRG is the largest competitive retail energy supplier in North America and, like Constellation, pairs that retail book with its own generation, competing head-to-head for residential and commercial electricity customers in Texas, PJM and the Northeast.
PSEG owns the Salem and Hope Creek nuclear plants in New Jersey and sells their output into PJM, putting it in direct competition with Constellation for carbon-free wholesale supply and for data-center power agreements in the same market.
AES develops and sells contracted generation, largely renewables, directly to large corporate and data-center buyers in the United States, competing with Constellation for the same long-term clean-energy supply agreements.
Balance Sheet & Liquidity
Revenue
$24.78B
Trailing 12 months (through 6/30/2026)
Net Income
$3.46B
Trailing 12 months (through 6/30/2026)
Free Cash Flow
$1.29B
Total Equity
$14.52B
Total Liabilities
$42.40B
Current Ratio
1.46
Interest Coverage
5.87
Debt/EBITDA
4.34
Earnings Per Share
Revenue & Net Income
Free Cash Flow
Income Breakdown
Historical statement
Margins over time
Debt over time
How heavy the debt is
Growth grid
Growth — Revenue
Fair Value Estimation
Fair Value
$163.53
Current Price
$298.07
Margin of Safety
-82.3%
Fair Value Range
$106.30 - $220.77
Spread across the valuation methods used, not a statistically calibrated confidence interval.
Estimation Methods
Valuation Metrics
P/E Ratio
29.05
ROE
16.0%
P/B Ratio
3.30
P/FCF
341.77
Gross Margin
-
ROIC
4.3%
Profitability Radar
Value Creation (Economic Moat)
ROIC
4.3%
WACC
9.1%
ROIC − WACC
-4.8 pp
ROIC is below the cost of capital — the company is destroying value for every dollar invested.
Fundamental Analysis Criteria
Passed (17)
- EPS shows upward trend
- Price CAGR 32.27%
- Debt/equity ratio
- Operating margin 18.5%
- Positive free cash flow
- Current ratio
- Interest coverage
- Debt/EBITDA
- Return on tangible assets
- ROE 14.7%
- Revenue growth 5Y 7.7%
- Analyst consensus: 82% buy
- Earnings surprise, average 3.8%
- PEG ratio 0.94
- Earnings quality (operating cash flow / net income) 1.21
- Share dilution -0.6%
- Piotroski F-Score 6/9
Failed (8)
- ROIC 4.3%
- P/FCF 341.77
- P/B ratio 3.30
- CapEx intensity
- Low reliance on intangibles
- Price below Graham Number
- DCF valuation (Overvalued)
- Net margin trend 14.0% vs 14.6%
Unavailable (2)
- Gross margin –
- Dividend payout –
Piotroski F-Score
Mixed signals: some areas need attention
Earnings Quality
High quality: earnings backed by cash
Share Dilution
Buying back shares. Shareholder friendly
Institutional Holdings
Governance
Executive Team
| Name | Title | Age |
|---|---|---|
| Mr. Joseph Dominguez | President, CEO & Chairman | 61 |
| Mr. Bryan Craig Hanson | Senior Executive VP & Chief Generation Officer | 59 |
| Mr. Daniel L. Eggers C.F.A. | Senior Executive Vice President of Finance & Data Economy | 49 |
| Mr. James McHugh | Senior Executive VP & Chief Commercial Officer | 53 |
| Mr. Shane P. Smith | Executive VP & CFO | 45 |
| Mr. Michael R. Koehler | Executive VP & Chief Administration Officer | 58 |
| Tim Flottemesch | Vice President of Investor Relations | - |
| Mr. Matthew Price | Executive VP, Chief Legal Officer & General Counsel | - |
| Ms. Susie Kutansky | Executive VP & Chief Human Resources Officer | - |
| Mr. Christopher H. Mudrick | Chief Nuclear Officer | - |
Audit Risk
4
Board Risk
8
Compensation Risk
3
Shareholder Rights Risk
8
Part 2 · The price and when to enter
This part won't tell you whether the company is worth owning: it helps you choose when to buy it, once the fundamentals have convinced you. Inside: technical analysis, potential, historical drawdowns, gamma exposure.
Documents
- View document
Annual Report (10-K)
A yearly overview of the business, its financial results, and the risks it faces.
Filed on 2026-02-24
- View document
Quarterly Report (10-Q)
A snapshot of financial performance for the most recent three-month period.
Filed on 2026-08-06
- View document
Current Report (8-K)
An announcement of a major event, such as a leadership change or big news.
Filed on 2026-08-06
via SEC EDGAR
Income History
via SEC EDGAR
Latest News
Recent headlines for CEG, sourced from Markets Gazette.
- 4d agoPOSITIVEGoogle, Oracle Back US Nuclear Upgrades for Data Centers
Constellation Energy is set to benefit significantly from major power purchase agreements with tech giants Google and Oracle, aimed at securing clean energy for their expanding data centers. Google has finalized a 20-year deal to fund upgrades at 11 nuclear units, adding 890 megawatts to the grid by 2032, backed by a US$4.3 billion investment from Constellation. Oracle will subscribe to output from NextEra Energy's Point Beach nuclear plant, absorbing US$300 million in rising costs. These agreements provide long-term revenue visibility and support the economic viability of nuclear generation assets, positioning Constellation as a key energy provider for the growing AI infrastructure.
- 5d agoPOSITIVEConstellation Energy Surges 12% on Google Nuclear Power Deal | Closing Bell
Constellation Energy Corporation experienced a significant surge of 12% following news of a substantial nuclear power deal with Google. While specific financial terms of the agreement were not disclosed, the partnership is expected to bolster Constellation's position in the clean energy sector and secure long-term revenue streams. This development underscores the growing demand for reliable, carbon-free energy solutions and highlights Constellation's strategic importance in meeting these needs. Investors reacted positively, anticipating enhanced profitability and market share growth for the company.
- 10d agoPOSITIVEConstellation Energy balza dopo l'accordo ventennale con Amazon per l'energia
Constellation Energy's stock saw a 1.65% increase following the announcement of a 20-year agreement to supply 690 MW of clean energy to Amazon. This significant, long-term deal underscores the growing demand for sustainable energy solutions and solidifies Constellation's position as a key player in the renewable energy sector. For investors, this contract provides substantial revenue visibility and de-risks future cash flows, potentially leading to upward price target revisions and increased institutional interest.
- 13d agoNEUTRALNasdaq-100® Inside the Index: Constellation Energy (CEG)
Nasdaq-100® Inside the Index features Constellation Energy (CEG), focusing on its nuclear power generation assets and the increasing significance of long-term power purchase agreements within its operational strategy. This spotlight within the index series provides visibility into CEG's business model, which relies heavily on stable, long-duration contracts to underpin its nuclear-centric energy production. Investors should note the emphasis on contract stability as a key driver for the company's financial performance and future outlook.
- 7/6/2026POSITIVEConstellation Energy: a smart play on the AI energy race
Constellation Energy Corporation is positioned as a strategic investment for portfolios seeking exposure to the burgeoning AI sector's energy demands. The company's role in providing reliable and potentially carbon-free energy solutions makes it a key player in powering the significant energy consumption of artificial intelligence infrastructure. Investors are advised to consider CEG for its potential to benefit from the increasing demand for electricity driven by AI advancements, offering a unique blend of energy provision and technological growth.
- 3/23/2026NEUTRALConstellation CEO on Gas, Power Prices and Data Center Demand at CERAWeek
Constellation Energy CEO Joseph Dominguez participated in discussions at CERAWeek, addressing key market dynamics including energy prices, natural gas trends, and the burgeoning demand from data centers. While specific financial figures or forward-looking statements were not detailed in this brief, the CEO's presence at a major energy conference highlights the company's active engagement in shaping and responding to industry developments. Investors will monitor future communications for concrete strategies and financial impacts stemming from these discussed trends.
via Markets Gazette