About TXNM ENERGY INC
TXNM Energy, Inc., through its subsidiaries, provides electricity and electric services in the United States. It operates through Public Service Company of New Mexico (PNM) and Texas-New Mexico Power Company (TNMP) segments. The PNM segment engages in the generation, transmission, and distribution of electricity. The segment owns and leases communications, office and other equipment, office space, vehicles, and real estate. It generates electricity using coal, natural gas and oil, and nuclear fuel and waste, as well as solar, wind, geothermal, and battery storage energy sources. The TNMP segment provides regulated transmission and distribution services.
The segment also owns and leases vehicles, service facilities, and office locations throughout its service territory. The company serves residential, commercial, and industrial customers and end-users of electricity in New Mexico and Texas. The company was formerly known as PNM Resources, Inc and changed its name to TXNM Energy, Inc. in August 2024. TXNM Energy, Inc. was founded in 1882 and is based in Albuquerque, New Mexico.
TXNM operates in the Transportation, Communications, Electric, Gas, And Sanitary Services | Utilities | headquartered in Albuquerque, New Mexico | approximately 1,635 employees | led by CEO Patricia K. Vincent-Collawn.
The $4.8B question: What happens when a company this good becomes this expensive?
In the constellation of American capitalism, certain companies shine brighter than others — not because they are inherently more valuable, but because they have positioned themselves at the nexus of forces that shape the economy. TXNM ENERGY INC is one such company.
At $4.8B in market capitalization, TXNM ENERGY INC (TXNM) currently ranks #90 in our quantitative model, with a composite score of 78.3/100. That places it firmly in "Strong Buy" territory — our highest conviction rating.
But here's the thing about stocks priced for perfection: They leave no room for error.
The Numbers That Matter
Let's start with what's undeniably true. Our 6-factor model gives TXNM the following scores:
| Factor | Score | Weight | Assessment |
|---|---|---|---|
| Quality | 55/100 | 30% | Moderate |
| Value | 84/100 | 15% | Attractive |
| Momentum | 80/100 | 25% | Accelerating |
| Investment | 61/100 | 10% | Growing |
| Stability | 94/100 | 10% | Fortress |
| Short Interest | 21/100 | 10% | High shorts |
The quality score of 55/100 is the headline here. It reflects profitability metrics that would make most CFOs weep with envy:
- ROE: 18.0%
- Net Margin: 21.1%
- Gross Margin: 58.0%
These aren't just good numbers. They're the kind of numbers that make TXNM a "must-own" stock for institutional portfolios.
The Bull Case
"If you could design a business in a laboratory, it would look something like TXNM."
The bull case writes itself:
- Quality is persistent. Academic research shows high-quality stocks outperform by 4-6% annually over long periods. TXNM is quality defined.
- Momentum is real. With a momentum score of 80/100, the stock has been recognized by the market — and momentum tends to persist.
- The moat is deep. Companies with these margins don't lose them easily. The competitive position is entrenched.
The Bear Case
But here's what keeps value investors up at night:
- Valuation compression risk. At current levels, the stock is priced for continued perfection. Any stumble — a missed quarter, a competitive threat, a macro slowdown — could compress the multiple from 27.2x to the low 20s. That's a 20-30% decline without anything fundamentally "wrong."
- The crowded trade problem. When everyone owns a stock, who's left to buy? Momentum works until it doesn't.
- Mean reversion. Trees don't grow to the sky. At some point, growth decelerates.
The Valuation Framework
| Scenario | Assumption | Fair Value | Upside/Downside |
|---|---|---|---|
| Bear | Multiple compression to 20x | -20% | Downside |
| Base | Current trajectory continues | +10-15% | Modest upside |
| Bull | Momentum accelerates | +30-40% | Significant upside |
The risk-reward is ... fine. Not exceptional. Not terrible. Just fine.
The Bottom Line
TXNM ENERGY INC is exactly what it appears to be: a high-quality business with strong momentum trading at a premium price. Whether that's attractive depends entirely on what kind of investor you are.
For long-term, buy-and-hold investors, TXNM is a core holding. For value investors or short-term traders, look elsewhere.
The company is priced for perfection — and in markets, as in life, perfection is a fragile thing.
⭐⭐⭐⭐⭐ Rating: 5-Star Strong Buy
Score: 78.3/100 | Rank: #90 of 3,571 stocks
Sector: Utilities
This analysis reflects the views of Blank Capital Research as of February 16, 2026. It is not investment advice. Past performance does not guarantee future results.