Value
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 7.7 |
| P/S | 9.0 |
| EV/EBITDA | 4.8 |
| Fwd P/E | 7.9 |
| PEG | 3.6 |
| Analyst target | 3.0 |
- ▸Forward P/E: 15.2x
- ▸PEG: 3.15
ES · Why this verdict
Why Eversource Energy (D/B/A) (ES) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.3/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Free cash flow stands at only 34% of reported net income, a significant quality red flag indicating that the majority of reported earnings are not materializing as distributable cash—raising questions about the durability of the dividend and the real reinvestment capacity of the business. Quality breakdown | Free cash flow should recover to at least 70% of net income within four quarters as capital investment normalizes, or the dividend sustainability thesis weakens materially. | →Stable |
| CounterRegulated utilities commonly run through extended capital investment cycles that suppress free cash flow temporarily; if this represents a peak-spending phase, the conversion ratio may recover naturally without any deterioration in the underlying earning power. | ||
The company has exceeded earnings expectations in each of the past four quarters, averaging roughly 3% above consensus, reflecting disciplined cost management and a pattern of conservative guidance that has been consistently outpaced. Earnings | Positive EPS surprises of at least 1% in each of the next four quarterly reports, extending the beat streak into mid-2027. | →Stable |
| CounterThe margin of outperformance has been thin—two of the four quarters came in below 2% above estimates—suggesting the streak may be driven by conservative guidance discipline rather than structural earnings power, and any shift in the operating environment could break it quickly. | ||
Elevated financial leverage is flagged as a negative factor alongside persistent negative news sentiment, together creating a backdrop where continued earnings execution alone may not be sufficient to unlock meaningful price appreciation from current levels. Bear case | Leverage should trend toward sector-average levels over four quarters and news sentiment should move to neutral before the thesis can support a re-rating. | →Stable |
| CounterRegulated utilities routinely maintain higher leverage ratios, supported by predictable rate-case cash flows; if interest costs stabilize and earnings hold, the leverage level may be entirely consistent with sector norms rather than a company-specific risk. | ||
Price momentum sits just at the lower edge of the level required for a technically constructive setup—at 4.4 versus a 4.5 threshold—and falling on-balance volume signals ongoing distribution rather than accumulation; the stock is range-bound with no clear directional edge. Engine gate (failed) | Momentum should recover clearly above 5.5 with sustained on-balance volume accumulation within two quarters to support any bullish re-assessment. | →Stable |
| CounterThe stock remains above its 200-day moving average, which preserves the long-term trend; the current range-bound consolidation could represent a base-building phase ahead of the next leg rather than the beginning of a sustained decline. | ||
Free cash flow stands at only 34% of reported net income, a significant quality red flag indicating that the majority of reported earnings are not materializing as distributable cash—raising questions about the durability of the dividend and the real reinvestment capacity of the business.
→StableQuality breakdown
- Expectation
- Free cash flow should recover to at least 70% of net income within four quarters as capital investment normalizes, or the dividend sustainability thesis weakens materially.
CounterRegulated utilities commonly run through extended capital investment cycles that suppress free cash flow temporarily; if this represents a peak-spending phase, the conversion ratio may recover naturally without any deterioration in the underlying earning power.
The company has exceeded earnings expectations in each of the past four quarters, averaging roughly 3% above consensus, reflecting disciplined cost management and a pattern of conservative guidance that has been consistently outpaced.
→StableEarnings
- Expectation
- Positive EPS surprises of at least 1% in each of the next four quarterly reports, extending the beat streak into mid-2027.
CounterThe margin of outperformance has been thin—two of the four quarters came in below 2% above estimates—suggesting the streak may be driven by conservative guidance discipline rather than structural earnings power, and any shift in the operating environment could break it quickly.
Elevated financial leverage is flagged as a negative factor alongside persistent negative news sentiment, together creating a backdrop where continued earnings execution alone may not be sufficient to unlock meaningful price appreciation from current levels.
→StableBear case
- Expectation
- Leverage should trend toward sector-average levels over four quarters and news sentiment should move to neutral before the thesis can support a re-rating.
CounterRegulated utilities routinely maintain higher leverage ratios, supported by predictable rate-case cash flows; if interest costs stabilize and earnings hold, the leverage level may be entirely consistent with sector norms rather than a company-specific risk.
Price momentum sits just at the lower edge of the level required for a technically constructive setup—at 4.4 versus a 4.5 threshold—and falling on-balance volume signals ongoing distribution rather than accumulation; the stock is range-bound with no clear directional edge.
→StableEngine gate (failed)
- Expectation
- Momentum should recover clearly above 5.5 with sustained on-balance volume accumulation within two quarters to support any bullish re-assessment.
CounterThe stock remains above its 200-day moving average, which preserves the long-term trend; the current range-bound consolidation could represent a base-building phase ahead of the next leg rather than the beginning of a sustained decline.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Eversource Energy has delivered four consecutive earnings beats averaging roughly 3% above consensus and carries a strong balance sheet health signal, but the stock sits just below its near-term price target with only 1.1% of headroom, momentum is at the lower edge of a constructive reading, and free cash conversion at only 34% of net income constrains the quality of the dividend—limiting the case for new capital at current levels.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.6 |
| ROA | 2.2 |
| Gross margin | 6.7 |
| Op margin | 9.9 |
| Net margin | 6.3 |
| Current ratio | 2.6 |
| FCF quality | 2.7 |
| Moat | 5.8 |
| Piotroski F | 7.8 |
- ▸Earnings quality RED FLAG: 34% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
4.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.8 |
| EPS growth | 3.5 |
Momentum
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.1 |
| MACD | 10.0 |
| OBV | 5.5 |
| MA position | 9.0 |
| Volume | 1.8 |
- ▸Overbought (RSI 78)
- ▸Above 200-day MA
Sentiment
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.8 |
| Analyst rating | 5.0 |
| Price target | 4.6 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Negligible insider selling — $439,296 (0.002% of mkt cap)
Peer rank
5.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.9 |
| quality rank | 5.7 |
| growth rank | 6.2 |
Technical
3.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.3 |
| 52w position | 9.9 |
| gap | 5.0 |
Risk (lower is worse)
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.4 |
| days to cover | 7.6 |
| volatility | 7.8 |
| put call | 8.7 |
| implied vol | 5.6 |
| beta | 8.7 |
| debt equity | 3.4 |
Catalyst
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 4.1 |
| dividend safety | 5.5 |
| news activity | 5.0 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 423.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position. | News modifier +2 (SELL_IF_HOLDING → HOLD_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_F_SELL|L3:NEWS_MOD=+2Passed (7)
- MOMENTUM:6.1>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:26d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.6=NEGATIVE
Warning (0)
none
Reward-to-Risk
-1.60
Upside
-15.3%
Downside
9.6%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
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 4.3 below the 5.4 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Risk (lower is worse) at 7.2) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-1.6=NEGATIVE) reinforce the read. Current asymmetry R:R is -1.60 — supplementary context, not the trigger for this path.
The strongest dimensions are Risk (lower is worse) at 7.2, Momentum at 6.1, and Peer rank at 5.9; the weakest are Technical at 3.8, Growth at 4.2, and Insider at 5.0. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -1.60 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Consistent Earnings Beat Streak
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P2Weak Cash Conversion Red Flag
Trip ifFree cash flow as a percentage of net income rises above 60% for 2 consecutive quarters.
- P3Leverage And Sentiment Headwinds
Trip ifDebt-to-equity ratio falls below 1.5 for 2 consecutive quarters.
- P4Momentum At Lower Threshold
Trip ifMomentum score rises above 5.5 for 2 consecutive measurement periods.