Nuclear power utility Constellation Energy Corporation (NASDAQ: CEG) exploded higher after reporting significantly higher revenue than expected for the first quarter of 2025.
Heading into today’s report, analysts forecast Constellation Energy would earn $2.15 per share on sales of $5.4 billion. Constellation actually missed the earnings forecast by a penny, but its revenue came in at $6.8 billion.
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Constellation Energy’s Q1 earnings
Both analysts and Constellation itself focused on Constellation’s adjusted operating earnings for the quarter. Generally accepted accounting principles (GAAP) profits were significantly lower at just $0.38 per share, down significantly from last year’s $2.78. Regardless, management described its results as “strong” and doubled down on its promise to grow its output to power “the new AI products that Americans increasingly are using in their daily lives.”
Yes, you read that right. Constellation energy is an artificial intelligence stock now, and poised to become even more so as it proceeds with its planned acquisition of Calpine Corporation, which when concluded will make Constellation America’s biggest electric utility.
Is Constellation stock a buy?
Turning to guidance, Constellation told investors it expects to earn between $8.90 and $9.60 per share, adjusted for one-time items, this year. Analysts are looking for the company to come in toward the high end of that range, at $9.45. But given that the midpoint of the range would be just $9.25 per share, it actually looks to me like Constellation is telling investors to expect earnings misses all year long — and bigger misses than the one just reported for Q1.
Constellation stock costs nearly 26 times trailing GAAP earnings right now, pays a negligible 0.6% dividend yield, and most analysts see earnings growing at less than 7% annually over the next five years. Constellation Energy stock is overpriced, and I cannot call it a buy.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Constellation Energy. The Motley Fool has a disclosure policy.
