Value
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 5.4 |
| P/S | 8.0 |
| EV/EBITDA | 3.5 |
| Fwd P/E | 6.1 |
| PEG | 3.9 |
| Analyst target | 4.0 |
- ▸Forward P/E: 21.2x
- ▸PEG: 2.71
NI · Why this verdict
Why NiSource (NI) 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 score5.3/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
NiSource is a regulated gas utility near its 52-week high and above analyst consensus targets, with momentum behind it but a structural free cash flow deficit of -162% relative to net income and no near-term upside to analyst price targets.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
NiSource has beaten earnings estimates in 3 of the last 4 quarters, demonstrating consistent regulatory cost recovery execution and the ability to translate rate increases into earnings beats in a regulated utility model. Catalyst breakdown | NiSource meets or beats consensus EPS in at least 2 of the next 3 quarterly reports, maintaining its recent positive delivery track record. | →Stable |
| CounterBeat streaks in regulated utilities often reflect modest and predictable outperformance within narrow bands rather than fundamental business improvement, and the one miss was a -3% result suggesting tight ranges. | ||
NiSource's free cash flow is -162% relative to net income, meaning the company consumes more than 2.5x its reported earnings in capital expenditures and other cash outflows, indicating that reported earnings significantly overstate true economic earning power. Quality breakdown | Free cash flow deficit improves to better than -100% of net income within 12 months as major capital projects ramp down or rate case awards come through. | →Stable |
| CounterRegulated utilities are capital-intensive by nature, and regulators typically allow cost recovery for infrastructure investment through future rate increases, making the FCF deficit a timing issue rather than a value destruction signal. | ||
NiSource's current price of $47.47 exceeds the analyst consensus resistance target of $47.09, meaning the stock has already exhausted near-term analyst upside with the price-to-target spread now negative. Warnings | Analyst consensus price target increases above $50 within 12 months, driven by successful rate case filings or higher earnings guidance. | →Stable |
| CounterRegulated utility stocks frequently trade above short-term analyst targets when dividend yield is attractive relative to prevailing interest rates, and yield-seeking buyers can sustain above-target valuations indefinitely. | ||
A golden cross setup, price above all moving averages, and rising on-balance volume with a momentum score of 7.3 indicate strong institutional buying pressure that could sustain the stock near current levels even as valuation becomes stretched. Momentum breakdown | Momentum score stays above 6.0 and the stock maintains its position above the 200-day moving average over the next 6 months. | →Stable |
| CounterNear-52-week-high momentum in a utility stock that has reached analyst targets and faces a negative FCF quality flag is more likely to decelerate than accelerate without a fundamental catalyst. | ||
NiSource has beaten earnings estimates in 3 of the last 4 quarters, demonstrating consistent regulatory cost recovery execution and the ability to translate rate increases into earnings beats in a regulated utility model.
→StableCatalyst breakdown
- Expectation
- NiSource meets or beats consensus EPS in at least 2 of the next 3 quarterly reports, maintaining its recent positive delivery track record.
CounterBeat streaks in regulated utilities often reflect modest and predictable outperformance within narrow bands rather than fundamental business improvement, and the one miss was a -3% result suggesting tight ranges.
NiSource's free cash flow is -162% relative to net income, meaning the company consumes more than 2.5x its reported earnings in capital expenditures and other cash outflows, indicating that reported earnings significantly overstate true economic earning power.
→StableQuality breakdown
- Expectation
- Free cash flow deficit improves to better than -100% of net income within 12 months as major capital projects ramp down or rate case awards come through.
CounterRegulated utilities are capital-intensive by nature, and regulators typically allow cost recovery for infrastructure investment through future rate increases, making the FCF deficit a timing issue rather than a value destruction signal.
NiSource's current price of $47.47 exceeds the analyst consensus resistance target of $47.09, meaning the stock has already exhausted near-term analyst upside with the price-to-target spread now negative.
→StableWarnings
- Expectation
- Analyst consensus price target increases above $50 within 12 months, driven by successful rate case filings or higher earnings guidance.
CounterRegulated utility stocks frequently trade above short-term analyst targets when dividend yield is attractive relative to prevailing interest rates, and yield-seeking buyers can sustain above-target valuations indefinitely.
A golden cross setup, price above all moving averages, and rising on-balance volume with a momentum score of 7.3 indicate strong institutional buying pressure that could sustain the stock near current levels even as valuation becomes stretched.
→StableMomentum breakdown
- Expectation
- Momentum score stays above 6.0 and the stock maintains its position above the 200-day moving average over the next 6 months.
CounterNear-52-week-high momentum in a utility stock that has reached analyst targets and faces a negative FCF quality flag is more likely to decelerate than accelerate without a fundamental catalyst.
Per-dimension breakdown
Quality
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.0 |
| ROA | 2.3 |
| Gross margin | 6.1 |
| Op margin | 10.0 |
| Net margin | 7.0 |
| Current ratio | 2.6 |
| FCF quality | 0.0 |
| Moat | 5.8 |
| Piotroski F | 7.8 |
- ▸Earnings quality RED FLAG: -162% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
3.9/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.5 |
| EPS growth | 3.2 |
Momentum
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 9.2 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.5 |
| Analyst rating | 7.2 |
| Price target | 6.1 |
- ▸LLM news sentiment: +0.50 (n=2)
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Insider selling (low materiality) — $2,255,691 (0.010% of mkt cap)
Peer rank
5.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.5 |
| quality rank | 5.7 |
| growth rank | 7.9 |
Technical
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.9 |
| support resistance | 2.2 |
| 52w position | 9.5 |
Risk (lower is worse)
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.5 |
| days to cover | 8.6 |
| volatility | 7.8 |
| put call | 3.5 |
| implied vol | 8.3 |
| beta | 9.7 |
| debt equity | 4.2 |
| news risk | 5.5 |
Catalyst
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 3.5 |
| dividend safety | 4.8 |
| news activity | 6.0 |
- ▸Strong earnings: 3B/1M
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:6.6>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:40d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.2=NEGATIVE
Warning (0)
none
Reward-to-Risk
-1.16
Upside
-6.3%
Downside
5.4%
Sizing output
AVOID
SetupBREAKOUT — Golden cross, above all MAs, RSI 65, MACD bullish
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 ( Sentiment at 7.0) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-1.2=NEGATIVE) reinforce the read. Current asymmetry R:R is -1.16 — supplementary context, not the trigger for this path.
The strongest dimensions are Sentiment at 7.0, Risk (lower is worse) at 7.0, and Momentum at 6.6; the weakest are Growth at 3.9, Technical at 4.5, and Peer rank at 5.0. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -1.16 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1NiSource has beaten earnings estimates in 3 of the last 4 quarters, demonstrating consistent regulatory cost recovery execution and the ability to translate rate increases into earnings beats in a regulated utility model.
Trip ifEPS surprise falls below -5% in at least 2 of the next 4 quarters.
- P2NiSource's free cash flow is -162% relative to net income, meaning the company consumes more than 2.5x its reported earnings in capital expenditures and other cash outflows, indicating that reported earnings significantly overstate true economic earning power.
Trip ifFree cash flow deficit worsens below -200% of net income for 2 consecutive quarters.
- P3NiSource's current price of $47.47 exceeds the analyst consensus resistance target of $47.09, meaning the stock has already exhausted near-term analyst upside with the price-to-target spread now negative.
Trip ifAnalyst consensus price target falls below $44 or price declines more than 5% below the 200-day moving average.
- P4A golden cross setup, price above all moving averages, and rising on-balance volume with a momentum score of 7.3 indicate strong institutional buying pressure that could sustain the stock near current levels even as valuation becomes stretched.
Trip ifMomentum score falls below 5.0 or on-balance volume declines for more than 8 consecutive weeks.