Type A - IDACORP, Inc. (IDA) 20260812 Stock Analysis

📅 Idacorp Key Upcoming Events

• August 31, 2026 Q2 2026 Dividend Payment
  • Description: Management has scheduled the disbursement of the $0.88 per share regular quarterly cash dividend to all shareholders of record as of August 5, 2026, reinforcing the company’s 14-year consecutive streak of unbroken dividend hikes.
• October 29, 2026 Q3 2026 Earnings Release (Estimated)
  • Description: Institutional investors will intensely scrutinize the Q3 print to determine if the staggering 17% year-over-year industrial revenue growth observed in the second quarter—driven heavily by the initial production ramps of mega-clients like Micron Technology and Meta—continues to offset the escalating operating and maintenance (O&M) expenses associated with the company’s aggressive infrastructure expansion.
• December 2026 Boardman to Hemingway Transmission Line Milestone (Estimated)
  • Description: The company targets the completion of all access roads, foundational groundwork, and over 50% of the physical structures for the Boardman to Hemingway (B2H) project. This 500-kilovolt, 290-mile transmission asset is a critical regional artery designed to deliver 1,000 megawatts of bi-directional capacity between the Pacific Northwest and the Intermountain West, fundamentally derisking Idacorp’s future capacity constraints.

🏢 Step 1: Idacorp Company Overview & Business Model

Q1-A1. What is Idacorp?

• Company Name (Ticker): IDACORP, Inc. (IDA)
• Sector: Utilities
• Exchange: NYSE
• Founded: May 06, 1915
• Listing Date: August 26, 1998
• Fiscal Year End: December
• Headquarters: USA, Boise
• CEO: Lisa Grow
• Market Cap: $8.20B
• Shares Outstanding: 57.84M
• Current Stock Price: $141.84
• Annual Dividend Yield: 2.48%
• Ex-dividend Date: August 05, 2026 (ET, historical basis)
• As-of: August 12, 2026 (ET)

Q1-A2. How Does Idacorp Make Money?

• Business Model Definition: IDACORP, Inc. functions fundamentally as a holding company, deriving nearly the entirety of its enterprise value from its principal subsidiary, Idaho Power Company. Idaho Power operates as a vertically integrated, regulated electric utility enjoying a state-sanctioned monopoly to generate, transmit, and distribute electricity to approximately 675,000 retail customers across a sprawling 24,000-square-mile territory in southern Idaho and eastern Oregon.
• Revenue Generation Mechanics: The core revenue engine relies on the traditional regulated utility model: recovering the costs of capital investments and operating expenses while earning an authorized return on equity (ROE) on its rate base. Rates are strictly governed by the Idaho Public Utilities Commission (IPUC) and the Public Utility Commission of Oregon (OPUC).
• Earnings Normalization via ADITC: A highly unique and crucial component of Idacorp’s profit generation is its utilization of the Accumulated Deferred Investment Tax Credits (ADITC) mechanism. Because nearly 37% of the company’s legacy generation is derived from hydroelectric power, its cost structure is heavily dependent on winter snowpack and river flow. To protect shareholder returns from weather-induced volatility, regulators allow Idacorp to amortize these deferred tax credits during low-water years to artificially support net income, ensuring the company consistently hits its authorized ROE targets regardless of environmental headwinds.

Q1-A3. Idacorp’s Revenue Segments & Core Income Sources

• Utility Operations (≈99% of Total Revenue): This segment represents the absolute core of the enterprise. The revenue mix is fundamentally balanced but rapidly shifting toward industrial concentration. Historically, the composition has been approximately 39% residential, 22% commercial, 15% industrial, and 11% irrigation, with wholesale and transmission revenues accounting for the remainder.
• The Industrial Growth Engine: The industrial segment has recently evolved into Idacorp’s dominant growth driver, fundamentally altering the company’s trajectory. In the second quarter of 2026, industrial revenues surged by an astonishing 17% year-over-year. This structural shift is propelled by the reshoring of advanced manufacturing and the exponential growth of artificial intelligence data centers. Mega-projects, most notably Micron Technology’s $50 billion semiconductor fabrication expansion in Boise and massive new Meta data facilities, are creating generational load demand. Management has aggressively mitigated the risk of these massive capital outlays by enforcing strict take-or-pay contract provisions, termination penalties, and upfront payment requirements on these large commercial entities, thereby shielding residential ratepayers and shareholders from potential project cancellations.
• All Other (≈1% of Total Revenue): A negligible secondary segment managed by IDACORP Financial Services (IFS), focusing on generating non-utility income and tax advantages through strategic investments in affordable housing developments and historic real estate rehabilitation projects.

Q1-A4. Who Are Idacorp’s Competitors?

• Direct Regional Peers and Market Moat: Due to its franchised monopoly status, Idaho Power faces absolutely no direct retail competition for electric service delivery within its geographic footprint. The competitive landscape is instead defined by the competition for institutional capital against other regulated Western and Midwestern utilities, including Portland General Electric (POR), Xcel Energy (XEL), Avista (AVA), and NorthWestern Energy (NWE).
• Industry Position and Differentiated Advantages: Idacorp commands a vastly superior fundamental position compared to its peer group, driven by two distinct structural advantages. First, it benefits from one of the most robust demographic and industrial migrations in the United States, granting it organic volume growth that stagnant coastal utilities cannot replicate. The 2025 Integrated Resource Plan (IRP) projects peak demand to explode by 1,700 megawatts (MW) over the next 20 years, an increase of nearly 45%. Second, its legacy hydroelectric infrastructure acts as a massive competitive advantage, providing zero-fuel-cost baseload power that insulates the company against the volatile natural gas commodity spikes that frequently compress margins at fossil-heavy competitors.

Q1-A5. Idacorp Key Events: Past 12 Months

• June 27, 2025 Filing of the 2025 Integrated Resource Plan (IRP)
  • Description: The company submitted its comprehensive 20-year energy roadmap to state regulators, outlining a staggering requirement for 2.15 gigawatts (GW) of new renewable generation (1,445 MW of solar and 700 MW of wind) alongside 885 MW of battery storage. This document confirmed a fundamental paradigm shift for Idacorp, transitioning it from a slow-growth legacy utility into a hyper-growth infrastructure developer tasked with meeting a projected 45% surge in peak customer demand.
• February 21, 2026 Initiation of a $600 Million At-The-Market (ATM) Equity Program
  • Description: Recognizing the immense capital required to fund its infrastructure supercycle, Idacorp filed an automatic shelf registration to sell up to $600 million in common stock. Management clearly communicated that future capital expenditures would be funded with a strict 50/50 blend of debt and equity, officially cementing a period of continuous, systemic equity dilution required to maintain the company’s investment-grade balance sheet.
• June 2026 250 MW of Battery Storage Placed in Service
  • Description: Demonstrating excellent project execution capabilities, the utility successfully brought a massive quarter-gigawatt battery energy storage system (BESS) online right on schedule. This deployment immediately entered the rate base, providing critical capacity to manage summer peak loads and effectively integrating expanding solar generation while instantly boosting authorized returns.
• July 16, 2026 Declaration of Quarterly Dividend
  • Description: The Board of Directors declared a regular quarterly cash dividend of $0.88 per share. This routine administrative action carries significant weight, as it preserves Idacorp’s immaculate 14-year streak of consecutive annual dividend increases, reinforcing its appeal to income-oriented institutional investors despite the ongoing CapEx cycle.
• July 30, 2026 Q2 2026 Earnings Release
  • Description: The company reported an exceptionally strong quarter, delivering EPS of $1.79 against expectations of $1.76, fueled by a massive 17% surge in industrial revenues. Management subsequently raised the lower bound of their full-year 2026 EPS guidance to a range of $6.30 to $6.45, signaling high confidence that the accelerated load growth from mega-clients like Micron will sustainably drive operating income through the remainder of the fiscal year.

Q1-A6. Step 1 Key Takeaways

• Step 1 Summary: Idacorp is currently navigating a generational pivot; it boasts a fundamentally impenetrable regulated monopoly model supercharged by explosive, semiconductor-driven industrial load growth, though this expansion necessitates a massive, highly dilutive capital expenditure cycle.
• Top 3 Red Flags:
  • 1 The sheer scale of the $1.41 billion annual capital expenditure plan (for 2026-2030) will require persistent, aggressive equity dilution via the active $600 million ATM program, serving as a heavy structural headwind to per-share value accumulation.
  • 2 The multi-year rate case cycle required to recover these infrastructure costs introduces profound regulatory risk; if the IPUC bows to consumer pressure over rising household bills and slashes the authorized ROE or disallows construction-work-in-progress (CWIP), the valuation premium will collapse.
  • 3 Operating and maintenance (O&M) expenses are climbing rapidly—increasing by nearly $12 million in Q2 2026 alone—driven by the amortization of previously deferred costs, inflationary labor pressures, and the aggressive rollout of the state-mandated Wildfire Mitigation Plan.
• Top 5 Key Financial/Operational Indicators for Next-Level Analysis:
  • 1 Annual CapEx-to-Operating Cash Flow coverage ratio
  • 2 Trailing Authorized versus Earned Return on Equity (ROE) spread
  • 3 Year-over-year industrial megawatt-hour (MWh) load growth velocity
  • 4 The rate of Accumulated Deferred Investment Tax Credits (ADITC) utilization
  • 5 Valuation premium multiples (P/E and EV/EBITDA) relative to regulated peers
• Top 3 Unconfirmed and Estimated:
  • 1 The exact timing, load requirements, and subsequent CapEx obligations tied to the secondary phases of Micron’s Fab 2 expansion, which management admits are not yet fully modeled in the current $1.4 billion annual baseline forecast.
  • 2 The final regulatory approval timelines and cost-sharing mechanics for the Southwest Intertie Project North (SWIP-N) transmission line connecting Idaho to Nevada markets.
  • 3 The ultimate financial impact and long-term litigation exposure resulting from the heightened standard of care mandated by Idaho’s newly implemented Senate Bill 1183 regarding utility wildfire liability.

🏰 Step 2: Idacorp’s Economic Moat, Growth & Capital Allocation

Q2-A1. Does Idacorp Have a Durable Economic Moat?

• Entry barriers: Idacorp enjoys a nearly insurmountable economic moat constructed upon its legal status as a state-sanctioned, exclusive electric utility franchise. The barrier to entry is both legislative and intensely capitalistic. Constructing duplicate electrical generation facilities, navigating decade-long environmental permitting for high-voltage transmission lines (such as the estimated $1.2 billion Boardman to Hemingway project), and securing right-of-way for 30,020 linear miles of distribution lines is economically prohibitive and legally impossible for any potential challenger.
• Pricing power: As a regulated monopoly, the company does not dictate prices via free-market forces; rather, it possesses robust, guaranteed pricing power routed through state regulatory commissions. Idacorp successfully leverages rate cases to pass inflation, infrastructure modernization, and wholesale power costs directly onto the consumer base. The efficacy of this mechanism was demonstrated in the 2024 Idaho Limited-Issue Rate Case, which became effective January 2025, subsequently driving a $49.6 million increase in retail revenues per MWh net of power cost adjustments. While regulators act as a ceiling to prevent price gouging, the fundamental right to recover prudent costs and earn a margin is enshrined in utility law.
• Profitability defense: The true strength of Idacorp’s moat lies in its unique earnings stabilization mechanisms. Regulated utilities strive to consistently hit their authorized Return on Equity (ROE) (currently near 9.1%), but Idacorp’s heavy reliance on hydroelectricity exposes it to severe weather volatility. To defend its profitability, the company utilizes the Idaho ADITC sharing mechanism, drawing down accumulated tax credits during low-water years to artificially support net income, and preserving them during strong years. This structural buffer guarantees smooth, highly predictable long-term returns on invested capital.

Q2-A2. Is Idacorp’s Growth Sustainable?

• Industry Structure and Growth Outlook: While the broader U.S. utility sector operates as a mature, low-growth industry, Idacorp benefits from operating in a profound structural anomaly. Idaho is currently capturing an unprecedented wave of population in-migration and industrial reshoring. The 2025 Integrated Resource Plan forecasts an exceptional 8.3% annual growth rate for retail sales over the next five years, radically outstripping national averages. The total addressable market (TAM) in terms of megawatt demand is expanding fiercely, driven by the electrification supercycle and the artificial intelligence infrastructure boom.
• Growth Sustainability: The sustainability of this growth is remarkably high because it is tethered to multi-billion-dollar physical infrastructure investments rather than cyclical retail sentiment. Projects like Micron’s historic $50 billion semiconductor fabrication facility in Boise require massive, continuous baseload power that cannot be easily offshored or paused once structural pouring begins. Furthermore, Idacorp proactively neutralizes the risk of these massive industrial deployments by enforcing stringent take-or-pay contract provisions and requiring upfront capital contributions from large commercial entities, thereby isolating the core ratepayer base from potential macroeconomic shocks.
  • Downside Scenario 1: A severe, prolonged recession in the global semiconductor and AI sectors forces Micron and Meta to indefinitely halt the construction of subsequent data center and fabrication phases, suddenly stranding Idacorp’s newly built, expensive substation capacity without the corresponding industrial revenue to support the investment.
  • Downside Scenario 2: Severe regulatory friction emerges at the state level. The IPUC, facing intense political backlash from voters suffering under rapidly surging residential utility bills, adopts a hostile stance, denying Idacorp full cost recovery for its $1.41 billion annual CapEx plan and slashing its authorized ROE.
  • Downside Scenario 3: An intensification of climate change leads to chronic, multi-year extreme drought conditions across the Pacific Northwest, permanently crippling the output of the Brownlee hydroelectric plant. This would force a structural and highly expensive shift toward third-party natural gas or market power purchases, severely compressing operating margins.

Q2-A3. How Does Idacorp Allocate Capital & Return Cash?

• Capital Allocation Priorities: Management’s capital allocation strategy is entirely dictated by the necessity of grid expansion. The absolute first priority is reinvesting into the physical plant to capture staggering load growth. Capital expenditures are slated to double, surging from a historical average of $709 million to an eye-watering $1.416 billion annually between 2026 and 2030, peaking at $1.7 billion in 2028. This massive reinvestment mandate effectively consumes all operating cash flow.
• Shareholder Return Assessment: The secondary priority remains the preservation of the dividend, which management has consistently increased for 14 consecutive years, aiming for a payout ratio of 50% to 60% of earnings. However, the current dividend yield of 2.48% is notably lower than the industry average of ≈3.6%, reflecting the stock’s elevated price multiples rather than a lack of payout. Crucially, because of the massive reinvestment needs, Idacorp is not executing share buybacks; instead, it is actively diluting shareholders via a $600 million ATM equity program to maintain its 50/50 debt-to-equity regulatory ratio. Consequently, while the reinvested capital earns a secure, regulated ROE, the direct cash return to equity holders is modest, and total return is heavily dependent on continued valuation premium preservation.

Q2-A4. Step 2 Key Takeaways

• Scoring Rationale:
  • Economic Moat (9/10): The company commands a virtually impenetrable regulated monopoly, structurally fortified by a unique earnings-smoothing tax credit mechanism that virtually guarantees authorized returns regardless of weather volatility.
  • Growth Sustainability (7/8): Unprecedented 5-year demand growth projections are driven by the tangible reshoring of semiconductor manufacturing and data centers, backed by rigorous protective take-or-pay contracts that shield the balance sheet.
  • Capital Allocation (6/7): While the historical dividend consistency is flawless, the current hyper-growth phase requires massive, continuous equity issuances, slightly suppressing per-share cash return metrics compared to mature, low-growth peers.
• 📊 Step 2 Score: 22/25 pts (Economic Moat 9/10 + Growth Sustainability 7/8 + Capital Allocation 6/7)
• Step 2 Summary: Idacorp operates one of the most uniquely advantaged utility moats in the nation, positioned perfectly to capture explosive, contractually secured industrial growth that will structurally double its rate base over the ensuing decade.

💰 Step 3: Is Idacorp Profitable? Financial Health Analysis

Q3-A1. Idacorp’s Growth & Profitability Trends

• Revenue and Profit Trajectory: Over the past five years, IDACORP has exhibited incredibly stable, upward-trending profitability that defies the traditional sluggishness of the utility sector. Net income attributable to the company rose from $261.1 million in 2023 to $289.1 million in 2024, and reached $323.5 million in 2025. This translates to robust EPS growth, expanding from $5.14 to $5.90 over that same timeframe. The fundamental driver of this numerical change is a persistent 2.3% annual customer growth rate paired with successful rate case outcomes that adjust base tariffs upward.
• Margin and Leverage Verification: True operating leverage—where profits grow exponentially faster than sales due to fixed cost absorption—is intentionally muted in the utility sector due to regulated return caps. However, Idacorp has successfully defended its margins despite severe inflationary pressures on materials and labor. The Q2 2026 net profit margin held remarkably steady at 21.9%, indicating that the company is effectively utilizing regulatory mechanisms to pass higher operational and depreciation costs onto customers without suffering any margin compression.

Q3-A2. How Profitable Is Idacorp? (Margins & ROIC)

• ROIC and Cost of Capital: For regulated utilities, Return on Equity (ROE) is the paramount profitability metric, strictly governed by state utility commissions. Idacorp’s trailing twelve-month ROE sits at approximately 9.1%, representing a healthy, regulator-approved spread over its embedded cost of equity. Its normalized Return on Invested Capital (ROIC) is approximately 5.52%, which is precisely in line with the industry average given the immensely capital-intensive nature of electrical infrastructure (e.g., Portland General Electric at 4.97%, Xcel Energy at 6.13%).
• Industry Advantage: Idacorp’s profitability profile is structurally advantaged by its legacy hydroelectric fleet (producing 36.9% of generation in 2025), which provides a zero-fuel-cost baseload generation layer. This profoundly buffers the company against the natural gas commodity price spikes that routinely compress margins at fossil-heavy peers, allowing Idaho Power to maintain highly competitive retail rates while securing its authorized returns.

Q3-A3. What Drives Idacorp’s Returns? (ROIC Breakdown)

• Utility Efficiency Indicator: For a vertically integrated utility, the core driver of value creation is the mathematical formula of Rate Base Growth multiplied by Authorized ROE. Idacorp’s returns are not driven by traditional widget-selling efficiency, but by its ability to deploy massive amounts of capital efficiently into grid modernization and new generation, and subsequently secure regulatory approval to recover those investments in rates.
• Capital Velocity: The rapid transition of construction-work-in-progress (CWIP) into operational, rate-earning assets is accelerating impressively. For example, the swift, on-time deployment of 250 MW of battery energy storage systems (BESS) in June 2026 directly enters the rate base, allowing the company to earn its authorized return on that specific capital almost immediately. This efficient capital transition is the bedrock of its EPS growth.

Q3-A4. Are Idacorp’s Earnings High Quality?

• Earnings to Cash Conversion: Profit quality is exceptionally high and fully supported by tangible cash inflows. In FY2025, book net income of $323.5 million was backed by a massive $601.8 million in operating cash flow (OCF). This structural discrepancy (OCF ≫ NI) is standard for utilities due to enormous non-cash depreciation expenses (which jumped by $27.7 million in 2025 alone due to new plant-in-service), indicating that earnings are highly conservative and backed by real customer bill payments.
• Cash Flow Quality: The OCF-to-Net Income cash conversion rate frequently exceeds 1.5x, demonstrating outstanding profit realization over the past 3-5 years. While Free Cash Flow (FCF) is deeply negative, this is an intentional, structural feature of a utility undergoing a massive CapEx supercycle ($1.4B/year) to meet guaranteed load demand, rather than a flaw in the fundamental quality or collectability of its operating earnings.

Q3-A5. Is Idacorp’s Balance Sheet Healthy? (Debt & Leverage)

• Debt Structure and Liquidity: Management guards the balance sheet conservatively to maintain crucial investment-grade credit ratings (Moody’s Baa1 / S&P BBB), which are necessary to access the cheap debt required for utility expansion. As of mid-2026, the company holds a debt-to-equity ratio of roughly 1.06x, which is highly standard, prudent, and exactly matches the capital structure targets mandated by state regulators.
• Refinancing and Interest Risk: The interest coverage ratio sits at a comfortable 2.86x, demonstrating that current operating income easily services the existing debt load. However, the massive step-up in capital expenditures will necessitate aggressive new debt issuance. Management has proactively committed to funding this expansion with a balanced 50/50 mix of debt and equity (leveraging the $600M ATM program) to prevent over-leveraging the balance sheet and breaching credit covenants. Short-term liquidity is completely adequate, with a current ratio of 0.99x preventing any near-term maturity walls.

Q3-A6. Step 3 Key Takeaways

• Scoring Rationale:
  • Profitability·Capital Efficiency (8/10): The company consistently earns near its authorized ROE of 9.1%, brilliantly utilizing tax credit mechanisms to perfectly smooth weather-related hydro volatility and secure returns.
  • Cash Flow·Profit Quality (7/8): Operating cash flow vastly exceeds book net income due to high depreciation, proving immaculate earnings quality, though massive CapEx requirements push free cash flow deeply negative.
  • Financial Soundness·Debt Management (6/7): The balance sheet retains solid investment-grade metrics with healthy interest coverage, though the impending $1.4B annual CapEx cycle will relentlessly test its ongoing debt-absorption capacity.
• 📊 Step 3 Score: 21/25 pts (Profitability·Capital Efficiency 8/10 + Cash Flow·Profit Quality 7/8 + Financial Soundness·Debt Management 6/7)
• Step 3 Summary: Idacorp is a highly profitable entity with immaculate earnings quality, utilizing a pristine balance sheet to absorb the massive financial load required for its historic infrastructure buildout.

🔎 Step 4: Idacorp Forensic Accounting & Dilution Review

Q4-A1. Does Idacorp Have Accounting Red Flags?

• Revenue recognition: not found
  • Evidence: Revenues are recognized in standard fashion based on electricity delivered and billed to customers under heavily audited, IPUC and OPUC-regulated tariff structures, leaving zero room for front-loading or channel stuffing.
• Cost capitalization: not found
  • Evidence: Construction-work-in-progress (CWIP) and plant-in-service capitalization strictly follow Federal Energy Regulatory Commission (FERC) and state utility commission guidelines. The amortization of deferred costs (such as the Jim Bridger plant and wildfire mitigation deferrals) is explicitly authorized by regulators, not a management manipulation.
• Sharp increase in accounts receivable and inventory: not found
  • Evidence: Receivables scale linearly with the 17% industrial revenue growth and recent base rate increases; no abnormal build-up or uncollectible surge was detected.
• Non-recurring adjustment (normalization): not found
  • Evidence: The aggressive utilization of ADITC (tax credits)—such as using $40.3 million in 2025 and projecting less than $15 million in 2026—is a unique, but completely transparent and legally authorized recurring regulatory mechanism used specifically to normalize earnings, not a deceptive accounting trick.

Q4-A2. Is Idacorp Overspending? (Capex & Capital Cycle)

• ➖ Not applicable: The traditional framework of “oversupply risk” from industry over-expansion does not apply to a regulated monopoly utility. Capital expenditures (surging to $1.4 billion annually for 2026-2030) are pre-approved through the Integrated Resource Plan (IRP) process to meet guaranteed customer load demand. These massive investments directly increase the company’s rate base, thereby structurally expanding its guaranteed future profit pool rather than creating a competitive glut that crushes product pricing.

Q4-A3. How Sound Is Idacorp’s Cash Flow?

• Cash Flow Reliability: Idacorp exhibits absolutely no warning signs regarding operating cash flow. Book net income is structurally lower than OCF (e.g., $323.5M NI vs $601.8M OCF in FY2025) due to the immense non-cash depreciation expenses inherent in long-lived utility infrastructure. There are no fictitious gains inflating the income statement.
• Funding Dependency: The core business fully funds its own daily operations and dividend payments with ease. However, because OCF covers less than half of the projected $1.41 billion annual CapEx, the company is entirely reliant on external financing (debt and equity markets) to fund its multi-billion dollar growth cycle. While this is standard utility sector behavior during an expansionary phase, it represents a structural dependence on open capital markets.

Q4-A4. Is Idacorp Diluting Shareholders?

• ⏪ Confirmed (Past) Dilution: Share counts have crept up slowly over the past five years, expanding from 50.8 million diluted shares in 2023 to 56.7 million by mid-2026. This represents moderate, controlled dilution that was strictly required to maintain the 50/50 debt-to-equity ratio mandated by state regulators as the rate base slowly expanded.
• ⏩ Potential (Future) Dilution & Overhang: The dilution paradigm has violently shifted. In early 2026, IDACORP filed for a massive $600 million At-The-Market (ATM) equity offering. Management explicitly confirmed on the Q2 2026 call that future CapEx will be funded by blending debt and equity on a “roughly equal basis,” guaranteeing continuous, heavy equity dilution over the next four years as the company builds out the B2H transmission line and new solar/storage assets. This massive supply overhang caps EPS growth velocity.

Q4-A5. Data Integrity Check

• Period: TTM (Trailing Twelve Months ending Q2 2026) ➡ (Pass)
• Definition: GAAP EPS and standardized EV/EBITDA definitions applied uniformly across financial platforms ➡ (Pass)
• Number of shares: Diluted weighted average (57.84M) unified across calculations ➡ (Pass)
• Unit: USD, uniformly expressed in millions/billions ➡ (Pass)
• Single Value Confirmation: A single, consistent data set was established across SA, SEC filings, and public platforms without irreconcilable conflicts ➡ (Pass)

Q4-A6. Step 4 Key Takeaways

• Scoring Rationale:
  • Accounting anomalies·distortion signals (8/8): The company operates with extremely clean, highly regulated accounting featuring zero forensic red flags or aggressive revenue recognition practices.
  • Cash flow warning signals (5/7): OCF is incredibly strong and exceeds net income, but a minor deduction is applied due to the absolute reliance on external capital markets to fund the negative FCF gap created by the CapEx supercycle.
  • Dilution factors (3/5): The active $600M ATM program guarantees severe near-term equity dilution, acting as a profound structural headwind to per-share value growth despite absolute net income expansion.
• 📊 Step 4 Score: 16/20 pts (Accounting anomalies·distortion signals 8/8 + Cash flow warning signals 5/7 + Dilution factors 3/5)
• Step 4 Summary: Idacorp’s financial statements are impeccably transparent and healthy, but shareholders must accept ongoing equity dilution as the inevitable toll required to fund the company’s massive infrastructure rate base expansion.

👔 Step 5: Idacorp Management & Shareholder Alignment

Q5-A1. Can You Trust Idacorp’s Management? (Guidance Track Record)

• Guidance Hit Rate: The track record is exceptional and virtually unparalleled in the utility sector. Under the leadership of CEO Lisa Grow, IDACORP has achieved an unprecedented 18 consecutive years of earnings growth, consistently hitting or exceeding the top end of its guidance ranges. This execution commands immense premium credibility from Wall Street.
• Transparency: Management is highly transparent, effectively communicating complex regulatory mechanics to the market. Following a massive Q2 2026 earnings beat, they proactively raised the floor of their full-year 2026 EPS guidance from $6.25 to $6.30, while simultaneously disclosing that they would need less than $15 million of ADITC (down from $30 million). This transparency vividly demonstrates high visibility and immense confidence in their underlying organic operations.

Q5-A2. What Are Idacorp Insiders Doing?

• Insider Trading Status and Context Analysis: A meticulous review of SEC Form 4 filings over the trailing 12 months reveals a uniform pattern of insider selling, with zero open-market purchases recorded. Executives have collectively disposed of nearly $2.0 million in stock. Notable transactions include CEO Lisa Grow exercising and immediately selling options worth roughly $463,000, and COO Adam Richins selling 1,500 shares for $213,000 in June 2026.
• Evaluating executive confidence signals: While there are no cluster buys to indicate a belief in deep undervaluation, the selling pattern primarily reflects routine compensation monetization and tax planning rather than an emergency exit by management. However, the complete and total absence of insider buying at current all-time high valuation multiples strongly suggests that management themselves view the stock as fully priced and offer no signal that the equity is a bargain.

Q5-A3. Is Idacorp’s Management Aligned With Shareholders?

• Voting Rights and Governance Check: Idacorp utilizes a standard, transparent single-class shareholder structure with no differential or dual-class voting rights, ensuring equitable representation and voting power for minority shareholders.
• Performance and Compensation Indicator (KPI) Analysis: Executive compensation is heavily weighted toward performance. For example, 86.1% of CEO Lisa Grow’s $7.53 million total compensation in recent years was tied to performance bonuses and stock options, aligning her wealth generation directly with long-term shareholder returns.
• Incentive alignment assessment: KPIs for utility executives are uniquely constrained; they are carefully negotiated with state regulators to balance financial returns (EPS growth) with strict operational mandates (grid reliability, wildfire mitigation, and safety). This regulatory oversight prevents management from starving the grid of necessary maintenance capital just to temporarily boost the stock price, ensuring a healthy alignment between customer safety and long-term shareholder stability.

Q5-A4. Step 5 Key Takeaways

• Scoring Rationale:
  • Management Trust (5/5): An extraordinary 18-year streak of continuous earnings growth and flawless guidance beats establishes immense, unshakeable credibility with institutional investors.
  • Insider Trends (3/5): A moderate deduction is applied due to a persistent pattern of insider selling and a complete lack of open-market buying near peak valuations, offering no internal confidence signal on price.
  • Governance·Compensation System (4/5): Features standard, effective alignment through heavy equity compensation, though utility constraints prevent purely aggressive stock-price maximization.
• 📊 Step 5 Score: 12/15 pts (Management Trust 5/5 + Insider Trends 3/5 + Governance·Compensation System 4/5)
• Step 5 Summary: Led by a highly credible management team with a flawless execution record, Idacorp operates with strong shareholder alignment, though recent insider selling suggests limited internal appetite for the stock at current elevated multiples.

⛵ Step 6: Idacorp Market Flow & Sentiment

Q6-A1. Analyst Consensus vs Idacorp Guidance

• Guidance gap and direction analysis: Following the Q2 2026 report, management raised the bottom end of its FY2026 EPS guidance to a range of $6.30 to $6.45 (midpoint $6.375). Market consensus estimates sit squarely at $6.37, indicating that the street perfectly aligns with management’s internal projections. There is no guidance gap, signifying a highly efficient market that has accurately priced the fundamental outlook.
• Tracking recent sentiment changes: Sentiment over the past 3 months has been modestly bullish. Following the Q2 earnings beat, several analysts (including Wells Fargo and BTIG) raised their price targets to the $155–$160 range, explicitly citing the influx of semiconductor (Micron) industrial load and an attractive rate base growth profile as justification for paying a premium multiple.

Q6-A2. What Is Idacorp’s Short Interest?

• Institutional Trends: Institutional ownership is overwhelmingly dominant and highly stable, accounting for approximately 96.7% of outstanding shares. Major index and mutual funds (Vanguard, BlackRock) hold the majority, ensuring low float volatility. However, recent filings indicate a net reduction in institutional value held (a decrease of roughly $188 million), suggesting that some institutions are actively taking profits after the stock’s recent 17% year-to-date run.
• Short Selling Indicators: Short interest stands at 5.17 million shares, which represents a moderately high 9.38% of the public float. With an average daily trading volume of roughly 570,000 shares, the Days-to-Cover ratio sits at an elevated 15.59 days. This high days-to-cover ratio indicates a tangible short-squeeze risk if a sudden positive catalyst (like a highly accretive regulatory rate case ruling) forces short sellers to cover their positions simultaneously.

Q6-A3. Step 6 Key Takeaways

• Scoring Rationale:
  • Consensus vs Guidance (2/3): Perfect alignment between analyst consensus and management guidance suggests a stable, predictable trajectory, but lacks the explosive upward surprise factor needed to secure a perfect score.
  • Supply·Short Interest (1/2): High institutional ownership provides a solid price floor, but elevated short interest (nearly 10% of float) indicates underlying smart-money skepticism regarding the sustainability of the current valuation premium.
• 📊 Step 6 Score: 3/5 pts (Consensus vs Guidance 2/3 + Supply·Short Interest 1/2)
• Step 6 Summary: Market sentiment is cautiously optimistic, perfectly pricing in management’s updated growth guidance, though a notable contingent of short sellers is actively betting against further valuation expansion in the face of the CapEx cycle.

🚀 Step 7: Idacorp Catalysts & Price Triggers

Q7-A1. What Could Move Idacorp Stock? (Top 3 Catalysts)

• 1 Micron Fab 1 and Fab 2 Accelerated Power Ramp
  • Timing: Next 6-12 months
  • Success Conditions: Micron accelerates the operational timeline of its historic $50 billion semiconductor fabrication facilities in Boise, smoothly pulling forward massive, high-margin industrial power demand into Idacorp’s 2027 earnings base without localized grid disruptions.
  • Failure Risk: Continued global memory chip sluggishness forces Micron to aggressively delay equipment installation, stranding Idacorp’s newly built substations and temporarily compressing the utility’s return on assets.
• 2 Approval and Cost Recovery of the $1.4B Annual CapEx Plan
  • Timing: Next 6-12 months
  • Success Conditions: The IPUC formally approves Idacorp’s aggressive 2026-2030 rate base expansion without significant disallowances, immediately validating the massive equity investments, removing regulatory overhang, and pushing EPS forecasts structurally higher.
  • Failure Risk: Regulators, facing intense political and consumer pressure over rising household electric bills, reject portions of the CapEx plan or slash the authorized ROE, instantly crushing the company’s valuation premium.
• 3 B2H (Boardman to Hemingway) Transmission Line Milestones
  • Timing: Late 2026
  • Success Conditions: The company successfully completes over 50% of the 500-kV B2H structures on time and under budget, securing a critical regional transmission artery that lowers imported power costs, boots system reliability, and validates Idaho Power’s increased 45.45% ownership stake.
  • Failure Risk: Unexpected environmental litigation, right-of-way disputes, or supply chain bottlenecks for high-voltage equipment halt construction, pushing back the 2026 in-service date and increasing total project costs beyond the $1.2 billion estimate.

Q7-A2. Idacorp’s Earnings Revision Trend

• Tracking EPS estimate changes: Following the Q2 2026 earnings beat—where industrial revenues surged by an astonishing 17%—analysts initiated a wave of upward revisions. The FY2026 consensus ticked up systematically to match the newly raised management guidance floor of $6.30, demonstrating that the sell-side is fully absorbing the impact of the industrial load ramp.
• Earnings expectations and momentum assessment: The earnings momentum is structurally positive but mathematically slow, which is typical of regulated utilities governed by fixed ROEs. However, the sudden influx of large contract customer data centers and semiconductor fabs is forcing a structural rerating of Idacorp’s long-term EPS Compound Annual Growth Rate (CAGR) from a historical 5% baseline up to a projected 8%+ trajectory.

Q7-A3. Step 7 Key Takeaways

• Scoring Rationale:
  • Catalyst (6/7): The physical construction of mega-fabs by Micron and Meta provides virtually guaranteed, generation-defining load growth catalysts that fundamentally alter the company’s trajectory.
  • EPS Trend (2/3): Steady upward revisions from analysts confirm the growth thesis, though the highly regulated utility environment strictly caps the sheer velocity of any EPS breakout.
• 📊 Step 7 Score: 8/10 pts (Catalyst 6/7 + EPS Trend 2/3)
• Step 7 Summary: The physical realization of the largest industrial expansion in Idaho’s history provides highly visible, low-risk catalysts that will securely and predictably drive Idacorp’s rate base higher for years to come.

⚖️ Step 8: Is Idacorp Fairly Valued? Valuation Analysis

Q8-A1. Idacorp’s Key Valuation Multiples (P/E, EV/EBITDA)

• PE Ratio (TTM): 24.2x (overvalued)
• Forward PE: 22.2x (overvalued)
• PS Ratio: 4.38x (overvalued)
• PB Ratio: 2.09x (overvalued)
• P/CF Ratio: 15.24x (overvalued)
• EV/EBITDA Ratio: 18.1x (overvalued)
• Dividend Yield: 2.48% (overvalued)
• Scoring Rationale: Across every absolute metric, Idacorp trades at a blistering premium. An EV/EBITDA of 18.1x and a P/E of 24.2x are exceptionally high absolute levels for a capital-intensive utility facing massive CapEx requirements, and the dividend yield of 2.48% offers a weak absolute safety margin for income investors.
• 📌 (1) Axis Q8-A1 Score: -2

Q8-A2. Idacorp vs Peers: Valuation Comparison

• Multiple selection based on peer comparison: Forward PER
• Calculation of peer-to-peer deviation rate: +24.1%
  • 🧮 Calculation Formula: ((24.2 - 19.5) / 19.5) × 100 = +24.1%
• Scoring Rationale: Compared to a multi-peer average of closely matched regulated utilities (19.5x), Idacorp is trading at a steep 24.1% premium. While its geographic growth footprint is vastly superior to stagnant peers, a nearly 25% premium pushes it firmly into overvalued territory relative to the sector benchmark.
• 📌 (2) Axis Q8-A2 Score: -2

Q8-A3. Is Idacorp Cheap or Expensive vs Its History?

• Comparison Indicators: Trailing PER
• Scoring Rationale: Over the past five years, Idacorp’s P/E has historically fluctuated between 17.5x and 21.4x. At the current multiple of 24.2x, the stock is trading well above its historical upper bounds (Top 0-20% band), indicating it is priced for perfection near all-time historical highs, completely abandoning its traditional utility safety margin.
• 📌 (3) Axis Q8-A3 Score: -4

Q8-A4. What Growth Is Priced Into Idacorp? (Reverse DCF)

• Implied Growth Rate: 8.0%
  • 1 Methodology: PEG-based inversion
  • 2 Core assumptions: Applying the current 24.2x P/E against the sector average PEG ratio implies the market demands approximately 8.0% long-term earnings growth to mathematically justify the current stock price.
• Achievable Growth Rate: 6.5%
  • Basis: Recent 5-year actual EPS CAGR and consensus estimates accounting for continuous equity dilution via the ATM program.
• Growth gap and difficulty assessment:
  • 🧮 Formula: Achievable Growth Rate 6.5% - Implied Growth Rate 8.0% = -1.5%p
• Scoring Rationale: The gap of -1.5 percentage points indicates that the market’s expectations (8.0%) slightly exceed the company’s historical and achievable baseline (6.5%). While expensive, it remains just inside the ±2% threshold of a fairly valued growth expectation, recognizing the unprecedented Micron load catalyst.
• 📌 (4) Axis Q8-A4 Score: 0

Q8-A4-1. What Growth Hurdle Does the Market Demand From Idacorp? (Reverse DCF Alternative)

• ➖ Not applicable: (Not applicable)
• Scoring Rationale: Q8-A4 reverse DCF analysis was successfully completed; therefore, this alternative qualitative axis is omitted.
• 📌 (4) Axis Q8-A4-1 Score: ➖

Q8-A5. Valuation Cross-Check

• Scoring Rationale:
  • (1) Axis Q8-A1 (Key Valuation Indicator): Overvalued
  • (2) Axis Q8-A2 (Peer-to-peer deviation rate): Overvalued
  • (3) Axis Q8-A3 (Historical Band Position): Very Overvalued
  • (4) Axis Q8-A4 (Justification for Growth): Fairly Valued
  • The systematic valuation framework mandates a zero penalty here because three of the four primary valuation axes clearly point in the same direction (Overvalued/Very Overvalued), successfully establishing a definitive directional consensus.
• 📌 (5) Axis Q8-A5 Score: 0

Q8-A6. Idacorp’s Hidden Asset & Stake Valuation

• ➖ Not applicable: (Not applicable)
• Scoring Rationale: Idacorp is a traditional vertically integrated utility where enterprise value is directly derived from its regulated rate base, not a holding company where unlisted equity, spin-offs, or hidden real estate assets drive market capitalization.
• 📌 (6) Axis Q8-A6 Score: ➖

Q8-A7. Final Valuation Adjustment

• Scoring Rationale: No exceptional circumstances exist outside the captured data that warrant overriding the mechanical valuation metrics. The premium associated with the Micron/Meta industrial expansion is already quantified, priced in, and fully addressed within the elevated peer and historical multiples.
• 📌 (7) Axis Q8-A7 Score: 0

Q8-A8. Valuation Adjustment Score Calculation

• Calculation Process:
  • (1) Axis (Key Valuation Indicators): -2 pts (Overvalued)
  • (2) Axis (Peer-to-peer deviation rate): -2 pts (+24.1% vs peers)
  • (3) Axis (Historical Band Position): -4 pts (Top 0-20%)
  • (4) Axis (Justification for Growth): 0 pts (Market expectations align closely with achievable utility constraints)
  • (5) Axis (Cross-Verification Adjustment): 0 pts (Conclusions agree)
  • (6) Axis (Held assets·Share Valuation): 0 pts (Not applicable)
  • (7) Axis (Final adjustment): 0 pts (No exceptional adjustments)
• 📊 Valuation Adjustment Score: A1 (-2) + A2 (-2) + A3 (-4) + A4 (0) + A5 (0) + A6 (0) + A7 (0) = -8 pts
• Commentary: The systematic valuation methodology reveals a stock that is definitively expensive. Trading at a 24% premium to its utility peers and sitting at the very top of its own 5-year historical valuation band, Idacorp’s current price offers zero margin of safety, demanding flawless execution of its massive capital expansion plan to justify current levels.
• Step 8 Summary: While the underlying business quality is superb, the stock is currently priced for perfection, leaving investors highly vulnerable to severe multiple compression if interest rates rise or regulatory friction occurs.

💀 Step 9: What Are the Risks of Idacorp? Fatal Risks & Pre-Mortem

Q9-A1. What Are the Biggest Risks to Idacorp?

• 1 Severe Regulatory Lag on $1.4B Annual CapEx Cycle:
  • Cause: The IPUC delays, denies, or heavily reduces cost recovery for portions of Idacorp’s massive infrastructure buildout (such as the B2H or SWIP-N transmission lines) due to intense political pressure over surging consumer electricity bills.
  • Impact: Financial (Structural ROE compression and massive negative free cash flow gaps).
  • Mitigation/Monitoring Indicators: Monitor the outcomes of upcoming general rate cases and the annual utilization rate of the ADITC mechanism.
• 2 Catastrophic Wildfire Liability in Idaho and Oregon:
  • Cause: A prolonged drought and severe wind event cause Idaho Power transmission equipment to ignite a catastrophic wildfire in a Tier 3 risk zone, leading to billion-dollar negligence claims under the newly implemented Senate Bill 1183 legal framework.
  • Impact: Multiple (Devastating equity wipeout and credit rating downgrades).
  • Mitigation/Monitoring Indicators: Track the aggressive implementation of Public Safety Power Shutoffs (PSPS) during high-risk weather and the rollout of the 2026-2028 Oregon Wildfire Mitigation Plan.
• 3 Structural Equity Dilution:
  • Cause: The company is forced to issue hundreds of millions in common stock via its $600M ATM program at inopportune times (e.g., during a market correction) simply to maintain the 50/50 debt-to-equity ratio required to fund infrastructure.
  • Impact: Financial (Permanent suppression of per-share earnings growth despite absolute net income growth).
  • Mitigation/Monitoring Indicators: Monitor quarterly SEC filings for the volume and average execution price of ATM share issuances.

Q9-A2. How Sensitive Is Idacorp to the Economy?

• 1 U.S. Interest Rate Environment (⬇): A “higher for longer” interest rate environment would rapidly compress utility valuation multiples globally, while simultaneously inflating Idacorp’s cost of debt just as it enters a historic $1.4 billion annual borrowing cycle.
• 2 Semiconductor Industry Cyclicality (⬇): If a sudden recession crushes global memory chip demand, Micron could freeze its Boise expansion, immediately halting Idacorp’s most important industrial growth catalyst and leaving the utility with overbuilt infrastructure.

Q9-A3. Idacorp Pre-Mortem: What Could Go Wrong?

• 1 The CapEx Debt Spiral: Massive cost overruns on the Boardman to Hemingway transmission line coincide with a hostile regulatory ruling denying cost recovery. Forced to absorb the losses, Idacorp issues massive amounts of debt, triggering a credit rating downgrade that sends interest expenses soaring and the stock plummeting.
  • Early Warning Signal: The IPUC issues a preliminary order disallowing significant portions of construction-work-in-progress (CWIP) into the rate base.
• 2 Catastrophic Wildfire Event: Despite enhanced protection settings, a high-voltage line fails during a windstorm, sparking a massive blaze in a populated Oregon zone. Panic ensues as investors price in limitless liability damages, mirroring the collapse of Pacific Gas & Electric.
  • Early Warning Signal: State fire investigators issue a preliminary report attributing a major summer ignition to Idaho Power equipment.
• 3 The Tech Load Mirage: Data center and AI infrastructure buildouts stall globally due to power constraints or technological shifts, leaving Idacorp with overbuilt generation capacity (e.g., 885 MW of expensive BESS and new solar) and stranded assets that residential ratepayers refuse to subsidize.
  • Early Warning Signal: Meta or other large contract customers exercise termination clauses on planned data center phases, eating the upfront penalty to halt construction.

Q9-A4. Risk Adjustment Score

• Reason for Scoring: The risks reside squarely in the -1 to -10 point deduction range. While catastrophic wildfire risk is an existential tail risk, management is proactively and heavily mitigating it with PSPS protocols and grid hardening. However, the regulatory friction risk and equity dilution risk tied to the massive $1.4B CapEx cycle are highly probable, structural, and currently ongoing, warranting a moderate but firm deduction.
• 📊 Risk Adjustment Score: -6 pts
• Step 9 Summary: Idacorp’s transition into a hyper-growth infrastructure developer carries substantial execution and regulatory risks, exposing shareholders to heavy, continuous equity dilution and extreme vulnerability to interest rate shocks.

🎯 Step 10: Idacorp Final Verdict: Score & Rating

Q10-A1. Investment Score & Rating

• Investment Score Calculation Formula:
  • Step breakdown: S2 (22) + S3 (21) + S4 (16) + S5 (12) + S6 (3) + S7 (8) = 82 pts
  • Steps 2-7 Sum (82 pts) + Valuation Adjustment (-8 pts) + Risk Adjustment (-6 pts) = Investment Score 68 pts
• Investment Score & Rating: 68 pts (C Rating ⭐⭐)
  • Commentary: The fundamental evaluation highlights a stellar, monopoly-protected business operating in a highly favorable geographic growth corridor, offset by a heavy valuation penalty and a moderate risk deduction stemming from its massive, dilutive capital expenditure requirements.

Q10-A2. Should You Buy Idacorp? (Recommendation)

• Recommendation: Sell
  • Commentary: While the underlying asset quality is undeniable, the current valuation completely strips away any margin of safety. Purchasing a capital-intensive utility at a 24% peer premium while it embarks on a massively dilutive $1.4 billion annual CapEx cycle presents an asymmetric downside risk, making it an unattractive entry point for fresh capital.

Q10-A3. Investment Thesis in One Line

• Idacorp possesses a robust, monopoly-protected electric utility model in a hyper-growth region driven by semiconductor reshoring and data center expansion, but its massive $1.4 billion annual capital expenditure cycle combined with a steep valuation premium creates an unfavorable risk-reward profile for new investors at current price levels.

Q10-A4. Idacorp’s Price Trend & Key Drivers

• Stock Price Trends Over the Past 12 Months: Sideways movement ➡️
• July 30, 2026 Q2 2026 Earnings Release and Guidance Raise
  • Description: The company reported a strong net income beat driven by a staggering 17% increase in industrial revenues from large contract customers, subsequently raising the floor of its full-year EPS guidance. ➡ Stock Price Sideways/Slight Decline (Profit-taking on valuation)
• February 21, 2026 Initiation of $600 Million ATM Equity Program
  • Description: Management filed to systematically sell massive amounts of equity into the open market to fund its CapEx supercycle, signaling to the market that ongoing dilution would cap near-term per-share value growth. ➡ Stock Price Sideways
• June 27, 2025 Filing of the 2025 Integrated Resource Plan
  • Description: The utility outlined the need for 2.15 GW of new renewables and an unprecedented $1.4B annual CapEx spend to meet a 45% peak demand surge, fundamentally shifting the narrative from a stable dividend payer to a high-risk infrastructure developer. ➡ Stock Price Upward (Anticipation of rate base growth)

Q10-A5. Action Plan

• ⚠️ Since the Investment Score for the analyzed company is 68 pts and the Recommendation falls under Sell, this Action Plan section is omitted as the stock is not suitable for investment.

🕵️‍♂️ Deep Dive Analysis

• ⚠️ Since the Investment Score for the analyzed company is 68 pts and the Recommendation falls under Sell, this Deep Dive section is omitted as the stock is not suitable for investment.