Value
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 9.4 |
| P/S | 9.3 |
| EV/EBITDA | 6.7 |
| Fwd P/E | 9.1 |
| PEG | 3.4 |
| Analyst target | 3.0 |
- ▸Forward P/E: 11.6x
- ▸PEG: 3.57
EIX · Why this verdict
Why Edison International (EIX) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score5.3/10
ConfidenceHIGH
MacroNEUTRAL
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. | →Stable |
| 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. | →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.
→StableBear 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.
→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.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Edison International has beaten earnings four consecutive quarters and carries positive price momentum, but the shares are just 0.3 percent below the analyst target with an unfavorable risk/reward, free cash flow is negative, and concentrated geographic and regulatory exposure limits the margin of safety — the setup favors patience over new positions.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 6.3 |
| ROA | 2.6 |
| Gross margin | 7.7 |
| Op margin | 10.0 |
| Net margin | 9.1 |
| Current ratio | 3.0 |
| FCF quality | 0.0 |
| Moat | 6.2 |
| Piotroski F | 6.7 |
- ▸Strong margins: 18%
- ▸Earnings quality RED FLAG: -32% FCF/NI
Growth
2.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.4 |
| EPS growth | 0.0 |
Momentum
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 3.8 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 4.9 |
| erm sentiment | 5.0 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Negligible insider selling — $37,650 (0.000% of mkt cap)
Peer rank
6.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 8.1 |
| quality rank | 8.9 |
| growth rank | 5.1 |
- ▸Attractive P/E vs peers
- ▸Superior ROE vs peers
Technical
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.8 |
| support resistance | 0.4 |
| 52w position | 9.9 |
| gap | 5.0 |
Risk (lower is worse)
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.4 |
| days to cover | 4.6 |
| volatility | 8.0 |
| put call | 9.8 |
| implied vol | 4.6 |
| beta | 9.1 |
| debt equity | 2.7 |
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 9.2 |
| dividend safety | 6.0 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 464.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:5.8>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:26d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-2.0=NEGATIVE
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-2.01
Upside
-13.6%
Downside
6.8%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 64, MACD bullish
EdgeCatalyst-Driven — Earnings in 26d with 4/4 beat streak
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 3.8 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Catalyst at 7.0) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-2.0=NEGATIVE) reinforce the read. Current asymmetry R:R is -2.01 — supplementary context, not the trigger for this path.
The strongest dimensions are Catalyst at 7.0, Peer rank at 6.8, and Risk (lower is worse) at 6.6; the weakest are Growth at 2.2, Technical at 4.0, and Insider at 5.0. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -2.01 and an engine sizing output of AVOID.
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 Headroom
Trip ifShare price corrects below $65, creating more than 11% upside to the $72.35 analyst target and restoring a constructive risk/reward.