Value
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 7.6 |
| P/S | 9.1 |
| EV/EBITDA | 5.8 |
| Fwd P/E | 8.1 |
| PEG | 4.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 14.6x
- ▸PEG: 2.58
AVA · Why this verdict
Why Avista (AVA) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score4.8/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Avista Corporation's current setup is unattractive: the reward-to-risk ratio stands at 0.55 to 1 with only 2.7% headroom to near-term resistance, free cash flow is negative, and revenue declined 8% year-over-year — a combination that argues for reducing exposure rather than adding.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
With only 2.7% headroom to the near-term resistance target of $42.09 and a reward-to-risk ratio of 0.55 to 1 — meaning potential downside is nearly double the potential upside from current levels — the current geometry does not support new capital deployment. Price targets | The stock pulls back more than 5% from current levels, allowing the reward-to-risk geometry to reset to at least 1.5 to 1 before re-evaluation. | →Stable |
| CounterA utility trading near its 52-week high with stable dividend income can attract yield-seeking capital even at unattractive reward/risk ratios; if the broader rate environment shifts favorably, the stock may grind higher without a meaningful pullback. | ||
Free cash flow is negative — converting at negative 84% relative to net income — meaning the business is not generating cash despite reporting positive earnings, and dividend coverage may rely on financing rather than operating cash generation. Quality breakdown | Free cash flow turns positive and the FCF-to-net-income conversion ratio rises above 50% within four quarters, confirming the business can self-fund distributions. | →Stable |
| CounterCapital-intensive businesses with long asset lives often show negative free cash flow during heavy investment cycles; if near-term capital expenditure peaks and depreciation begins to exceed new investment, free cash flow can recover without any change in operating performance. | ||
Revenue declined 8% year-over-year and the Rule-of-40 score stands at negative 17, placing the business well below the threshold that distinguishes sustainably growing enterprises from those with deteriorating top lines. Growth breakdown | Revenue growth turns positive on a year-over-year basis and the Rule-of-40 score rises above 0 within three quarters. | →Stable |
| CounterUtility revenues are heavily regulated and subject to rate-case timing; a rate increase approval could restore top-line growth mechanically without any improvement in the underlying operating franchise. | ||
Two beats and two misses over the last four quarters — including a 44% negative surprise in August 2025 — indicate unreliable earnings delivery, with the rolling average EPS surprise standing at negative 6%, leaving investors unable to depend on consistent outperformance. Earnings | The next two reported quarters both beat consensus estimates, turning the rolling four-quarter average EPS surprise positive. | →Stable |
| CounterThe most recent quarter produced an 8% positive surprise, suggesting execution may be improving; one additional beat would shift the trailing four-quarter record to 3 beats and 1 miss, a materially more encouraging picture. | ||
On-balance volume is falling despite the price sitting above the 200-day moving average, and a recent session saw volume surge to 2.3 times the average on a selloff — both signals consistent with institutional distribution rather than accumulation. Momentum breakdown | On-balance volume reverses to a rising trend and holds that trend for at least 30 consecutive trading days, signaling a shift from distribution to accumulation. | →Stable |
| CounterPrice above the 200-day moving average remains a constructive technical anchor; if the distribution signals prove temporary and buying interest returns at current levels, the on-balance volume divergence could resolve upward rather than confirming a breakdown. | ||
With only 2.7% headroom to the near-term resistance target of $42.09 and a reward-to-risk ratio of 0.55 to 1 — meaning potential downside is nearly double the potential upside from current levels — the current geometry does not support new capital deployment.
→StablePrice targets
- Expectation
- The stock pulls back more than 5% from current levels, allowing the reward-to-risk geometry to reset to at least 1.5 to 1 before re-evaluation.
CounterA utility trading near its 52-week high with stable dividend income can attract yield-seeking capital even at unattractive reward/risk ratios; if the broader rate environment shifts favorably, the stock may grind higher without a meaningful pullback.
Free cash flow is negative — converting at negative 84% relative to net income — meaning the business is not generating cash despite reporting positive earnings, and dividend coverage may rely on financing rather than operating cash generation.
→StableQuality breakdown
- Expectation
- Free cash flow turns positive and the FCF-to-net-income conversion ratio rises above 50% within four quarters, confirming the business can self-fund distributions.
CounterCapital-intensive businesses with long asset lives often show negative free cash flow during heavy investment cycles; if near-term capital expenditure peaks and depreciation begins to exceed new investment, free cash flow can recover without any change in operating performance.
Revenue declined 8% year-over-year and the Rule-of-40 score stands at negative 17, placing the business well below the threshold that distinguishes sustainably growing enterprises from those with deteriorating top lines.
→StableGrowth breakdown
- Expectation
- Revenue growth turns positive on a year-over-year basis and the Rule-of-40 score rises above 0 within three quarters.
CounterUtility revenues are heavily regulated and subject to rate-case timing; a rate increase approval could restore top-line growth mechanically without any improvement in the underlying operating franchise.
Two beats and two misses over the last four quarters — including a 44% negative surprise in August 2025 — indicate unreliable earnings delivery, with the rolling average EPS surprise standing at negative 6%, leaving investors unable to depend on consistent outperformance.
→StableEarnings
- Expectation
- The next two reported quarters both beat consensus estimates, turning the rolling four-quarter average EPS surprise positive.
CounterThe most recent quarter produced an 8% positive surprise, suggesting execution may be improving; one additional beat would shift the trailing four-quarter record to 3 beats and 1 miss, a materially more encouraging picture.
On-balance volume is falling despite the price sitting above the 200-day moving average, and a recent session saw volume surge to 2.3 times the average on a selloff — both signals consistent with institutional distribution rather than accumulation.
→StableMomentum breakdown
- Expectation
- On-balance volume reverses to a rising trend and holds that trend for at least 30 consecutive trading days, signaling a shift from distribution to accumulation.
CounterPrice above the 200-day moving average remains a constructive technical anchor; if the distribution signals prove temporary and buying interest returns at current levels, the on-balance volume divergence could resolve upward rather than confirming a breakdown.
Per-dimension breakdown
Quality
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.5 |
| ROA | 1.9 |
| Gross margin | 9.3 |
| Op margin | 9.5 |
| Net margin | 5.4 |
| Current ratio | 3.6 |
| FCF quality | 0.0 |
| Moat | 4.6 |
| Rule of 40 | 3.0 |
| Piotroski F | 6.7 |
- ▸Earnings quality RED FLAG: -84% FCF/NI
- ▸No competitive moat
- ▸Rule of 40: -17 (fail)
Growth
2.6/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 0.6 |
| EPS growth | 4.7 |
- ▸Declining revenue: -8%
Momentum
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 0.7 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 2.1 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.8 |
| Analyst rating | 5.0 |
| Price target | 5.2 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Negligible insider selling — $65,277 (0.002% of mkt cap)
Peer rank
4.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.0 |
| quality rank | 6.0 |
| growth rank | 0.0 |
Technical
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 5.4 |
| support resistance | 4.7 |
| 52w position | 9.2 |
Risk (lower is worse)
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.8 |
| days to cover | 6.6 |
| volatility | 6.4 |
| put call | 3.3 |
| implied vol | 6.5 |
| beta | 10.0 |
| debt equity | 4.6 |
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| dividend safety | 5.0 |
| news activity | 6.0 |
- ▸Earnings concerns: 2B/2M
- ▸Dividend: 483.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:4.9>=4.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:41d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-2.4=NEGATIVE
Warning (1)
- MOMENTUM:4.9<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
-2.36
Upside
-11.9%
Downside
5.0%
Sizing output
AVOID
SetupRANGE_BOUND — RSI 50 mid-range, Bollinger mid-band
EdgeNO_EDGE — No clear edge identified
SuitabilityAGGRESSIVE — MCap $3.4B<$5B
Investment implication
The F-path SELL output reflects an overall score of 4.3 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Risk (lower is worse) at 6.5) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-2.4=NEGATIVE) reinforce the read. Current asymmetry R:R is -2.36 — supplementary context, not the trigger for this path.
The strongest dimensions are Risk (lower is worse) at 6.5, Technical at 6.4, and Value at 6.0; the weakest are Growth at 2.6, Catalyst at 4.0, and Peer rank at 4.0. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -2.36 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1With only 2.7% headroom to the near-term resistance target of $42.09 and a reward-to-risk ratio of 0.55 to 1 — meaning potential downside is nearly double the potential upside from current levels — the current geometry does not support new capital deployment.
Trip ifReward-to-risk ratio rises above 1.5 following a price pullback of more than 5% from current levels.
- P2Free cash flow is negative — converting at negative 84% relative to net income — meaning the business is not generating cash despite reporting positive earnings, and dividend coverage may rely on financing rather than operating cash generation.
Trip ifFree cash flow as a percentage of net income rises above 50% for 2 consecutive quarters.
- P3Revenue declined 8% year-over-year and the Rule-of-40 score stands at negative 17, placing the business well below the threshold that distinguishes sustainably growing enterprises from those with deteriorating top lines.
Trip ifRevenue growth exceeds 3% year-over-year for 2 consecutive quarters.
- P4Two beats and two misses over the last four quarters — including a 44% negative surprise in August 2025 — indicate unreliable earnings delivery, with the rolling average EPS surprise standing at negative 6%, leaving investors unable to depend on consistent outperformance.
Trip ifEPS surprise exceeds 0% for 2 consecutive quarters.
- P5On-balance volume is falling despite the price sitting above the 200-day moving average, and a recent session saw volume surge to 2.3 times the average on a selloff — both signals consistent with institutional distribution rather than accumulation.
Trip ifOn-balance volume rises for more than 30 consecutive trading days while price stays above the 200-day moving average.