Contact Energy operating results shift toward geothermal and hydro output
Contact Energy (NZSE:CEN) reported its July 26, 2026 operating results with lower thermal generation of 15 GWh compared with 29 GWh a year ago. Geothermal and hydro output reached 461 GWh and 598 GWh respectively.
See our latest analysis for Contact Energy.
Contact Energy’s share price closed at NZ$8.96 and has seen some short term pressure, with the 30 day share price return down 4.17% and the 90 day share price return down 5.19%. At the same time, the 1 year total shareholder return of 6.39% and 5 year total shareholder return of 41.23% indicate momentum has built over a longer horizon.
If this shift toward cleaner generation has your attention, it can be useful to see what else is shaping the power sector and related infrastructure. You can start with the 38 power grid technology and infrastructure stocks
Contact Energy’s cleaner generation mix and recent share price pullback put the focus firmly on valuation. Do current levels still offer a favourable balance of risk and reward for new buyers and existing holders?
Most Popular Narrative: 14.2% Undervalued
Contact Energy’s most followed valuation narrative points to a fair value of NZ$10.44 compared with the last close at NZ$8.96. That gap rests on a detailed view of how the company’s cleaner generation mix could translate into future earnings and cash flows.
Continued expansion and optimization of geothermal and hydro generation capacity, with recent projects like Tauhara and Te Huka 3 coming online, as well as significant renewable projects under construction, positions Contact Energy to capture increasing electricity demand and benefit from premium pricing for clean power, driving strong revenue growth and improved long-term margins.
Want to see what sits behind that greener growth story? The narrative leans on modest revenue expansion, steady margins and a richer future earnings multiple. Curious which assumptions really move the NZ$10.44 fair value?
Result: Fair Value of NZ$10.44 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, the Contact Energy narrative still faces pressure from rising operating costs and regulatory changes that could constrain electricity prices and squeeze margins.
Find out about the key risks to this Contact Energy narrative.
Another View on Contact Energy’s valuation
The earlier fair value of NZ$10.44 for Contact Energy relies heavily on future earnings assumptions. On a simpler P/E basis, the stock trades at 22.8x compared with 14.6x for the global electric utilities group and a fair ratio of 23.6x. That tighter gap raises a practical question: Is there as much valuation upside as the first model suggests?
For investors weighing these mixed signals, it can help to see how the market might move toward that fair ratio and what that would mean for return potential and downside risk. See what the numbers say about this price — find out in our valuation breakdown.
Next Steps
With sentiment on Contact Energy split between cleaner growth potential and cost or regulatory pressures, it makes sense to move quickly and test the numbers yourself. For a clearer picture of what the market is excited about and what could go wrong, start with the 2 key rewards and 2 important warning signs.
Looking for more investment ideas beyond Contact Energy?
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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