Dominion Energy to Report Q4 Earnings: Buy, Sell or Hold the Stock?

Dominion  Energy D is scheduled to release its fourth-quarter 2025 results on Feb. 23, before market open. The Zacks Consensus Estimate for earnings is currently pegged at 64 cents per share on revenues of $3.56 billion.

Fourth-quarter earnings estimates have gone down 5.88% over the past 60 days. The Zacks Consensus Estimate for quarterly revenues indicates a year-over-year increase of 4.78%.

D Stock’s Earnings Surprise History

Dominion Energy’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 12.72%.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Dominion Energy this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you can see below.

Dominion Energy Inc. Price and EPS Surprise

Dominion Energy Inc. price-eps-surprise | Dominion Energy Inc. Quote

You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

NEE’s Earnings ESP: Dominion Energy has an Earnings ESP of -2.48%.

Zacks Rank of NEE: The company currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank stocks here.

A company from the same industry with the right combination of the two factors for an earnings surprise this season is The AES Corporation AES. AES currently has a Zacks Rank #2 and an Earnings ESP of +0.54%.

A couple of other stocks from the same industry that reported positive earnings surprise this season are NextEra Energy NEE and WEC Energy Group WEC, among others. The Zacks Consensus Estimate for 2026 earnings per share for NEE and WEC indicates year-over-year growth of 7.82% and 6.26%, respectively.

Factors Likely to Have Influenced D Stock’s Q4 Results

Dominion Energy’s fourth-quarter sales volumes are expected to have improved from the prior year, courtesy of strong demand from the data centers. Strong returns from the regulated investments are also expected to have boosted fourth-quarter earnings. Moreover, the lack of a scheduled refueling outage at Millstone Power Station in the fourth quarter of 2025 serves as a significant tailwind for earnings.

However, an increase in financing expenses, contracted energy prices, lack of Nuclear PTC, share dilution and operation and maintenance expenses timing are likely to have offset most of the positive impact.

D Stock Returns Lower Than Its Industry

Dominion Energy’s trailing 12-month return on equity (“ROE”) is 9.6%, lower than the industry average of 10.7%. ROE is a financial ratio that measures how well a company uses its shareholders’ equity to generate profits. The company's current ROE indicates that it is not using shareholders’ funds more efficiently than peers.

D Stock’s Price Performance

D’s shares have gained 6.5% in the past three months compared with the Zacks Utility – Electric Power industry’s rise of 1.6%.

Dominion Energy’s Shares Trading at a Premium

The company is currently valued at a premium compared with its industry on a forward 12-month P/E basis. Dominion Energy is trading at 18.03X compared with its industry’s 16.75X.

Investment Thesis

Higher demand in its service regions and the data centers is expected to have boosted the operation of the company. To cater to the rising demand, Dominion Energy has been planning to invest in its infrastructure and operations.

Dominion Energy aims to invest nearly $50 billion in the 2025-2029 period to further strengthen its operations. The company’s long-term objective is to have more battery storage, solar, hydro and wind projects by 2036 and increase the renewable energy capacity by over 15% per year, on average, in the next 15 years.

Weaker energy margins and rising operations and maintenance expenses to offset some of the positives in the fourth quarter. With returns currently trailing the broader industry and the stock trading at a premium valuation, investors may find it prudent to step away and explore more attractive opportunities elsewhere in the utilities space.

Wrapping Up

Dominion Energy continues to deliver stable performance, supported by rising demand for clean energy across its service territories. Attractive customer growth across Virginia and South Carolina service areas is going to boost its sales volumes.

However, share dilution and lower contracted energy margins might have offset some of the positives in the quarter.


 

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research