Value
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.6 |
| P/S | 6.3 |
| EV/EBITDA | 1.6 |
| Fwd P/E | 5.8 |
| PEG | 8.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 22.3x
- ▸PEG: 0.84
CWEN-A · Why this verdict
Why Clearway Energy (CWEN-A) 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 score5.8/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
The Class A shares display strong technical momentum — including a volume surge of 5 times average on an up move and a 21% revenue growth rate — but the stock is effectively at its near-term price target with an unfavorable risk/reward, and an earnings track record showing two misses in the last three completed quarters limits the conviction available at current levels.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
A volume surge of 5 times the average on an up move, rising on-balance volume, and positioning above the 200-day moving average reflect genuine buying interest and supply-demand strength in the Class A shares. Momentum breakdown | On-balance volume continues rising and the stock holds above $37.60 (stop-loss support level) over the next 6 months, validating the momentum thesis. | →Stable |
| CounterThe stock is range-bound near its near-term target with an RSI at mid-range; strong momentum without a fresh catalyst to drive through resistance often results in a mean-reversion pullback. | ||
Free cash flow conversion of 123% relative to net income means the business generates more cash than GAAP earnings alone would suggest — an important quality feature for a capital-intensive renewable-energy operator carrying long-lived depreciating assets. Quality breakdown | FCF conversion remains above 100% of net income for four consecutive quarters, confirming cash-generation quality is durable and not a one-period event. | →Stable |
| CounterA free-cash-flow-to-net-income ratio above 100% in a capital-intensive business often reflects large depreciation charges on long-lived assets — the cash may be required for asset maintenance rather than being genuinely distributable. | ||
With approximately 98% of assets in renewable energy and storage and a single counterparty representing a concentrated revenue stream, the earnings profile is highly dependent on a narrow set of variables — as reflected by two misses in the last three completed quarters. Bear case | If the concentration risk is manageable, the company should deliver EPS at or above consensus in 3 of the next 4 quarters, demonstrating that earnings reliability is improving. | →Stable |
| CounterLong-term contracted power-purchase agreements typical of renewable-energy portfolios can provide cash-flow visibility that partially mitigates the headline concentration risk. | ||
The 4.4% dividend yield is accompanied by a dividend safety concern, suggesting the payout may not be adequately covered by earnings — a risk that could result in a cut that simultaneously impairs both the income stream and the share price. Catalyst breakdown | The dividend is maintained or increased for four consecutive quarters while the company reports positive EPS in at least two of those quarters, falsifying the safety concern. | →Stable |
| CounterAs with similar renewable-infrastructure operators, the dividend may be supported by contracted free cash flows rather than GAAP earnings — making FCF coverage more relevant than the earnings line for assessing payout sustainability. | ||
A volume surge of 5 times the average on an up move, rising on-balance volume, and positioning above the 200-day moving average reflect genuine buying interest and supply-demand strength in the Class A shares.
→StableMomentum breakdown
- Expectation
- On-balance volume continues rising and the stock holds above $37.60 (stop-loss support level) over the next 6 months, validating the momentum thesis.
CounterThe stock is range-bound near its near-term target with an RSI at mid-range; strong momentum without a fresh catalyst to drive through resistance often results in a mean-reversion pullback.
Free cash flow conversion of 123% relative to net income means the business generates more cash than GAAP earnings alone would suggest — an important quality feature for a capital-intensive renewable-energy operator carrying long-lived depreciating assets.
→StableQuality breakdown
- Expectation
- FCF conversion remains above 100% of net income for four consecutive quarters, confirming cash-generation quality is durable and not a one-period event.
CounterA free-cash-flow-to-net-income ratio above 100% in a capital-intensive business often reflects large depreciation charges on long-lived assets — the cash may be required for asset maintenance rather than being genuinely distributable.
With approximately 98% of assets in renewable energy and storage and a single counterparty representing a concentrated revenue stream, the earnings profile is highly dependent on a narrow set of variables — as reflected by two misses in the last three completed quarters.
→StableBear case
- Expectation
- If the concentration risk is manageable, the company should deliver EPS at or above consensus in 3 of the next 4 quarters, demonstrating that earnings reliability is improving.
CounterLong-term contracted power-purchase agreements typical of renewable-energy portfolios can provide cash-flow visibility that partially mitigates the headline concentration risk.
The 4.4% dividend yield is accompanied by a dividend safety concern, suggesting the payout may not be adequately covered by earnings — a risk that could result in a cut that simultaneously impairs both the income stream and the share price.
→StableCatalyst breakdown
- Expectation
- The dividend is maintained or increased for four consecutive quarters while the company reports positive EPS in at least two of those quarters, falsifying the safety concern.
CounterAs with similar renewable-infrastructure operators, the dividend may be supported by contracted free cash flows rather than GAAP earnings — making FCF coverage more relevant than the earnings line for assessing payout sustainability.
Per-dimension breakdown
Quality
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.5 |
| Gross margin | 8.6 |
| Op margin | 0.0 |
| Net margin | 5.9 |
| Current ratio | 4.4 |
| FCF quality | 9.1 |
| Moat | 5.8 |
| Piotroski F | 7.8 |
- ▸Excellent cash conversion: 123% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
7.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 7.8 |
| EPS growth | 7.3 |
- ▸Strong growth: 21% YoY
Momentum
7.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 2.6 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 10.0 |
| vol acceleration | 10.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
- ▸Volume surge (5.0x avg) on up move
Sentiment
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.9 |
| Price target | 5.5 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (8.0) — signal dampened
Insider
5.0/10data confidence 50%Peer rank
4.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.4 |
| quality rank | 5.0 |
| growth rank | 5.0 |
Technical
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.1 |
| support resistance | 2.6 |
| 52w position | 9.5 |
Risk (lower is worse)
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.2 |
| days to cover | 7.2 |
| volatility | 3.6 |
| beta | 7.5 |
| debt equity | 3.8 |
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 1.1 |
| surprise avg | 10.0 |
| dividend safety | 3.5 |
- ▸Earnings concerns: 1B/2M
- ▸Dividend: 4.4%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:7.9>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:NO_DATE
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.4=NEGATIVE
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-1.43
Upside
-10.2%
Downside
7.1%
Sizing output
AVOID
SetupRANGE_BOUND — RSI 48 mid-range, Bollinger mid-band
EdgeNO_EDGE — No clear edge identified
SuitabilityMODERATE — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 4.8 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Momentum at 7.9) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-1.4=NEGATIVE) reinforce the read. Current asymmetry R:R is -1.43 — supplementary context, not the trigger for this path.
The strongest dimensions are Momentum at 7.9, Growth at 7.5, and Sentiment at 6.3; the weakest are Quality at 4.7, Peer rank at 4.8, and Catalyst at 4.9. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -1.43 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1A volume surge of 5 times the average on an up move, rising on-balance volume, and positioning above the 200-day moving average reflect genuine buying interest and supply-demand strength in the Class A shares.
Trip ifPrice falls below $37.60 (stop-loss level) for 2 consecutive weeks.
- P2Free cash flow conversion of 123% relative to net income means the business generates more cash than GAAP earnings alone would suggest — an important quality feature for a capital-intensive renewable-energy operator carrying long-lived depreciating assets.
Trip ifFree cash flow falls below $0 for 2 consecutive quarters.
- P3With approximately 98% of assets in renewable energy and storage and a single counterparty representing a concentrated revenue stream, the earnings profile is highly dependent on a narrow set of variables — as reflected by two misses in the last three completed quarters.
Trip ifEPS surprise exceeds 5% for 3 consecutive quarters, demonstrating consistent earnings delivery despite the concentrated portfolio.
- P4The 4.4% dividend yield is accompanied by a dividend safety concern, suggesting the payout may not be adequately covered by earnings — a risk that could result in a cut that simultaneously impairs both the income stream and the share price.
Trip ifQuarterly EPS exceeds $0 in 3 of the next 4 reported quarters while dividend per share is maintained at or above the current level.