Is PNW a high-quality business?

AlphaMadera's AlphaQuality grade scores Pinnacle West Capital Corporation on six pillars — profitability, capital efficiency, balance-sheet strength, growth durability, cash generation, and shareholder yield. The composite letter grade reflects how PNW compares to a Buffett-style quality bar.

What is Pinnacle West Capital Corporation's AlphaQuality grade?

AlphaQuality assigns a letter grade (A through F) to PNW based on a six-pillar quantitative model. The live page shows the composite grade plus each pillar's individual score with the underlying metrics.

What makes PNW a quality stock?

AlphaQuality looks at return on capital, free-cash-flow margins, debt-to-equity, revenue stability, dividend and buyback policy, and operating-margin trend. Stocks scoring well across all six pillars earn higher grades — the methodology favors compounders over cyclicals.

PNW - Pinnacle West Capital Corporation

Price: -- -- | CONSENSUS: Hold DETAILS | PRICE TARGET: $102.38 DETAILS

AlphaQuality

Quantitative six-pillar business-quality grade

Stable Earnings Power

AlphaQuality — archetype-weighted quantitative grade

D 38.6 / 100 composite

Composite Grade

Composite of six pillars weighted for stable earnings power businesses. Purely quantitative — no stock price or analyst input.

Profitability

Weight: 20%

D 37.7

5yr Avg ROIC 3.4% 27/100
Operating Margin Trend +0.24 pp/yr 62/100

Capital Efficiency

Weight: 15%

C- 44.5

5yr Avg ROE 8.0% 50/100
5yr Share-Count CAGR 1.9% 34/100

Growth Quality

Weight: 15%

C+ 60.3

5yr Revenue CAGR 8.9% 77/100
5yr EPS CAGR -2.0% 16/100
Revenue-Growth Years (5) 5/5 100/100

Cash Generation

Weight: 15%

F 0.0

5yr FCF Margin -13.7% 0/100
5yr FCF/NI Conversion -1.12x 0/100

Balance Sheet

Weight: 20%

F 15.1

Net Debt / EBITDA 8.37x 0/100
Interest Coverage (EBIT/Int) 2.75x 41/100
Altman Z-Score 0.76 11/100

Stability

Weight: 15%

A- 82.6

EPS Volatility (σ/μ) 0.11 84/100
Piotroski F-Score 6 67/100
Negative-Revenue Years (5) 0/5 100/100

4 of 4 gurus held; 4 trimmed.

Holders: 4
Avg Δ position: -27.7%
New buys: 0
Full exits: 0

Wood decreased -85%
Cooperman decreased -19%
Dalio decreased -5%

How this is calculated

AlphaQuality grades six pillars from 0-100 and weights each by archetype:

Profitability (20%) — 5yr Avg ROIC, Operating Margin Trend
Capital Efficiency (15%) — 5yr Avg ROE, 5yr Share-Count CAGR
Growth Quality (15%) — 5yr Revenue CAGR, 5yr EPS CAGR, Revenue-Growth Years (5)
Cash Generation (15%) — 5yr FCF Margin, 5yr FCF/NI Conversion
Balance Sheet (20%) — Net Debt / EBITDA, Interest Coverage (EBIT/Int), Altman Z-Score
Stability (15%) — EPS Volatility (σ/μ), Piotroski F-Score, Negative-Revenue Years (5)

We deliberately ignore stock price, analyst targets, and consensus ratings so the grade is suitable for backtesting forward returns. A minimum of 5 fiscal years of audited statements is required; distressed and highly leveraged infrastructure businesses are declared ungradable rather than forced into a numeric score.