Value
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 9.8 |
| P/S | 9.5 |
| EV/EBITDA | 7.3 |
| Fwd P/E | 9.4 |
| PEG | 3.9 |
| Analyst target | 4.0 |
- ▸Forward P/E: 9.1x
- ▸PEG: 2.59
- ▸Attractively valued
EIX · Why this verdict
Why Edison International (EIX) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictBUY WAIT
Overall score5.5/10
ConfidenceMEDIUM
MacroRISK_OFF
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The business is concentrated in southern California and subject to oversight by a single state regulator — a dual concentration that creates significant vulnerability to adverse regulatory decisions, regional demand disruptions, or extreme weather events affecting a geographically narrow service territory. Bear case | If the regulatory relationship remains constructive and rate cases proceed without material adverse rulings, the concentration risk is manageable at the current scale. | ↓Deteriorating |
| CounterGeographic and regulatory concentration is a structural feature of the regulated utility model; it is balanced by the near-monopoly characteristics of the service territory, which provide revenue visibility that diversified companies cannot match. | ||
The company has beaten consensus earnings estimates in each of the past four quarters, with an average positive surprise of 13.4 percent — a streak that reflects consistent execution and suggests management is delivering meaningfully ahead of analyst expectations. Earnings | Earnings beats continue in each of the next two reported quarters with average positive surprises above 5 percent, sustaining the track record that underpins analyst confidence in the forward earnings outlook. | →Stable |
| CounterA four-quarter beat streak driven in part by large individual-quarter surprises can reflect one-time items or favorable weather/load patterns rather than durable outperformance; the regulatory environment adds further unpredictability to the earnings run-rate. | ||
Free cash flow is negative — the business is consuming more cash than it generates — despite reporting positive net income and strong margins, indicating that reported earnings are not yet being converted into distributable cash and raising questions about dividend sustainability over the medium term. Quality breakdown | Free cash flow turns positive for 2 consecutive reported quarters, demonstrating that the negative reading was transient and that the earnings stream is converting into real cash generation. | →Stable |
| CounterCapital-intensive regulated utilities routinely run negative free cash flow during large infrastructure investment cycles; if the negative cash flow reflects planned rate-base expansion that will be recovered through future rate cases, it is not a sign of earnings-quality deterioration. | ||
The share price is just 0.3 percent below the analyst consensus target of $72.35, with the risk/reward ratio at near-zero and the overall geometry unfavorable — a setup where the near-term reward is negligible and any adverse news could push the stock into negative-return territory. Price targets | The setup becomes constructive if analyst consensus targets are raised materially above $80, or if the share price corrects to create meaningful upside headroom. | Tripped→Stable |
| CounterA perfect earnings beat streak and improving momentum suggest the analyst community may be underestimating the forward earnings power; if targets are revised upward, the apparent lack of upside resolves quickly and the setup improves. | ||
The business is concentrated in southern California and subject to oversight by a single state regulator — a dual concentration that creates significant vulnerability to adverse regulatory decisions, regional demand disruptions, or extreme weather events affecting a geographically narrow service territory.
↓DeterioratingBear case
- Expectation
- If the regulatory relationship remains constructive and rate cases proceed without material adverse rulings, the concentration risk is manageable at the current scale.
CounterGeographic and regulatory concentration is a structural feature of the regulated utility model; it is balanced by the near-monopoly characteristics of the service territory, which provide revenue visibility that diversified companies cannot match.
The company has beaten consensus earnings estimates in each of the past four quarters, with an average positive surprise of 13.4 percent — a streak that reflects consistent execution and suggests management is delivering meaningfully ahead of analyst expectations.
→StableEarnings
- Expectation
- Earnings beats continue in each of the next two reported quarters with average positive surprises above 5 percent, sustaining the track record that underpins analyst confidence in the forward earnings outlook.
CounterA four-quarter beat streak driven in part by large individual-quarter surprises can reflect one-time items or favorable weather/load patterns rather than durable outperformance; the regulatory environment adds further unpredictability to the earnings run-rate.
Free cash flow is negative — the business is consuming more cash than it generates — despite reporting positive net income and strong margins, indicating that reported earnings are not yet being converted into distributable cash and raising questions about dividend sustainability over the medium term.
→StableQuality breakdown
- Expectation
- Free cash flow turns positive for 2 consecutive reported quarters, demonstrating that the negative reading was transient and that the earnings stream is converting into real cash generation.
CounterCapital-intensive regulated utilities routinely run negative free cash flow during large infrastructure investment cycles; if the negative cash flow reflects planned rate-base expansion that will be recovered through future rate cases, it is not a sign of earnings-quality deterioration.
The share price is just 0.3 percent below the analyst consensus target of $72.35, with the risk/reward ratio at near-zero and the overall geometry unfavorable — a setup where the near-term reward is negligible and any adverse news could push the stock into negative-return territory.
Tripped→StablePrice targets
- Expectation
- The setup becomes constructive if analyst consensus targets are raised materially above $80, or if the share price corrects to create meaningful upside headroom.
CounterA perfect earnings beat streak and improving momentum suggest the analyst community may be underestimating the forward earnings power; if targets are revised upward, the apparent lack of upside resolves quickly and the setup improves.
Per-dimension breakdown
Quality
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 6.6 |
| ROA | 2.7 |
| Gross margin | 8.2 |
| Op margin | 10.0 |
| Net margin | 9.6 |
| Current ratio | 2.6 |
| FCF quality | 0.2 |
| Moat | 5.1 |
| Piotroski F | 6.7 |
- ▸Strong margins: 19%
- ▸Earnings quality RED FLAG: 2% FCF/NI
- ▸No competitive moat
Growth
5.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 1.5 |
| EPS growth | 10.0 |
- ▸Declining revenue: -4%
Momentum
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 2.0 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 6.5 |
| Volume | 1.0 |
- ▸Overbought bear rally (RSI 85)
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope flat
Sentiment
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 6.0 |
| erm sentiment | 3.1 |
Insider
4.2/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 4.6 |
| notable moves | 3.0 |
- ▸Negligible insider selling — $27,780 (0.000% of mkt cap)
Peer rank
4.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 8.3 |
| quality rank | 9.4 |
| growth rank | 1.0 |
- ▸Attractive P/E vs peers
- ▸Superior ROE vs peers
Technical
1.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.6 |
| support resistance | 0.5 |
| 52w position | 4.7 |
Risk (lower is worse)
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.8 |
| days to cover | 7.4 |
| volatility | 6.2 |
| put call | 6.2 |
| implied vol | 5.7 |
| max pain risk | 3.0 |
| beta | 9.3 |
| debt equity | 2.7 |
- ▸Above max pain $38
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 2.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 5.8 |
- ▸Perfect beat streak: 4Q
- ▸Earnings today
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Earnings today. Wait until post-earnings.
Engine technical detail
verdict_path:
L3:NEWS_BLOCK|ENTRY_STICKY:WITHIN_BANDPassed (5)
- MOMENTUM:5.9>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:-0.3=NEGATIVE
- EARNINGS_PROXIMITY:0d<=7d
Warning (2)
- DEATH_CROSS:momentum=5.9>=5.0 recovering
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.30
Upside
-3.8%
Downside
12.4%
Sizing output
STARTER
SetupRecovery — Death cross but MACD improving, RSI 85
EdgeSector Rotation — Utilities sector out of favor, value=7.0
SuitabilityModerate — Balanced profile
Investment implication
A recent news event triggered an L3 news-block on the verdict path. Trigger: Earnings today. Wait until post-earnings. The 10-dimension scores remain Value at 7.0 (strongest), but ASYMMETRY:-0.3=NEGATIVE also fails — the news block is the proximate trigger, not the sole driver.
The strongest dimensions are Value at 7.0, Catalyst at 6.6, and Momentum at 5.9; the weakest are Technical at 1.9, Insider at 4.2, and Peer rank at 4.8. The V9 engine flagged 2 failed gates with 2 warnings, producing an asymmetric reward-to-risk of -0.30 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Four Quarter Earnings Streak
Trip ifEPS falls below consensus in 2 of the next 3 consecutive quarters.
- P2Negative Free Cash Flow Quality Risk
Trip ifFree cash flow rises above $0 for 2 consecutive reported quarters.
- P3Geographic Regulatory Concentration Risk
Trip ifNumber of high-severity concentration-risk designations falls below 1 from the current 2.
- P4Priced At Target No Upside HeadroomTripped
Trip ifShare price corrects below $65, creating more than 11% upside to the $72.35 analyst target and restoring a constructive risk/reward.