Value
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.4 |
| P/S | 7.5 |
| EV/EBITDA | 2.8 |
| Fwd P/E | 5.6 |
| PEG | 4.4 |
| Analyst target | 4.0 |
- ▸Forward P/E: 22.8x
- ▸PEG: 2.12
ETR · Why this verdict
Why Entergy (ETR) 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
TrendMatrix Research · core thesis
Engine thesis — one sentence
The stock has already reached and exceeded its near-term resistance target with deeply negative free cash flow, high leverage, and a high-severity regulatory concentration tied to a single nuclear facility — making the current entry point unattractive despite three beats in the last four quarters and rising on-balance volume.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The current price has surpassed the near-term resistance target, leaving no technical headroom on the upside — and with an unfavorable risk/reward, the balance of probability favors waiting for a more attractive entry over adding at current levels. Bear case | This concern would resolve if the analyst consensus target were to be revised substantially higher, establishing more than 8% of new room above the current price. | ↑Improving |
| CounterRegulated utilities can re-rate upward as the market revises rate expectations; a meaningfully lower interest-rate environment could justify higher multiples and push the consensus target well above where the price sits today. | ||
Free cash flow is deeply negative — standing at -220% relative to net income — meaning reported earnings are not converting into cash and the company is consuming more cash than it generates on an operating basis. Quality breakdown | This pillar would be falsified if free cash flow relative to net income turns positive and sustains above 0% for two consecutive annual reporting periods. | →Stable |
| CounterCapital-intensive regulated utilities often show negative free cash flow during heavy construction cycles; investment in rate base may be regulatory-approved and expected to earn an allowed return, converting today's cash consumption into accretive earnings over time. | ||
The business carries a high-severity regulatory concentration tied to a single nuclear facility — a single adverse regulatory decision, cost overrun, or safety event at that plant could have an outsized impact on earnings and credit quality that a more diversified asset base would absorb more easily. Risk breakdown | This risk would diminish if the company's annual risk factor disclosures no longer list this as a high-severity item — dropping from 1 HIGH to 0 HIGH concentration items. | ↑Improving |
| CounterNuclear plants under regulated frameworks typically receive cost recovery, and their value as reliable carbon-free baseload capacity is increasingly recognized by regulators; the concentration risk may carry less practical downside than it appears on paper. | ||
Three of the last four quarters were earnings beats, and the most recent quarter delivered a 2.26% positive surprise — providing partial support for management credibility even as the overall financial profile remains strained. Earnings | This positive holds if the company continues to beat estimates in at least three of the next four quarters, keeping the average EPS surprise above 0%. | ↓Deteriorating |
| CounterThe second most recent quarter was a miss, and the most recent beat was only 2.26% — the narrowing beat magnitude suggests the reliable-delivery track record is thinning rather than building. | ||
The current price has surpassed the near-term resistance target, leaving no technical headroom on the upside — and with an unfavorable risk/reward, the balance of probability favors waiting for a more attractive entry over adding at current levels.
↑ImprovingBear case
- Expectation
- This concern would resolve if the analyst consensus target were to be revised substantially higher, establishing more than 8% of new room above the current price.
CounterRegulated utilities can re-rate upward as the market revises rate expectations; a meaningfully lower interest-rate environment could justify higher multiples and push the consensus target well above where the price sits today.
Free cash flow is deeply negative — standing at -220% relative to net income — meaning reported earnings are not converting into cash and the company is consuming more cash than it generates on an operating basis.
→StableQuality breakdown
- Expectation
- This pillar would be falsified if free cash flow relative to net income turns positive and sustains above 0% for two consecutive annual reporting periods.
CounterCapital-intensive regulated utilities often show negative free cash flow during heavy construction cycles; investment in rate base may be regulatory-approved and expected to earn an allowed return, converting today's cash consumption into accretive earnings over time.
The business carries a high-severity regulatory concentration tied to a single nuclear facility — a single adverse regulatory decision, cost overrun, or safety event at that plant could have an outsized impact on earnings and credit quality that a more diversified asset base would absorb more easily.
↑ImprovingRisk breakdown
- Expectation
- This risk would diminish if the company's annual risk factor disclosures no longer list this as a high-severity item — dropping from 1 HIGH to 0 HIGH concentration items.
CounterNuclear plants under regulated frameworks typically receive cost recovery, and their value as reliable carbon-free baseload capacity is increasingly recognized by regulators; the concentration risk may carry less practical downside than it appears on paper.
Three of the last four quarters were earnings beats, and the most recent quarter delivered a 2.26% positive surprise — providing partial support for management credibility even as the overall financial profile remains strained.
↓DeterioratingEarnings
- Expectation
- This positive holds if the company continues to beat estimates in at least three of the next four quarters, keeping the average EPS surprise above 0%.
CounterThe second most recent quarter was a miss, and the most recent beat was only 2.26% — the narrowing beat magnitude suggests the reliable-delivery track record is thinning rather than building.
Per-dimension breakdown
Quality
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.6 |
| ROA | 1.8 |
| Gross margin | 5.4 |
| Op margin | 7.5 |
| Net margin | 6.7 |
| Current ratio | 3.8 |
| FCF quality | 0.0 |
| Moat | 5.6 |
| Piotroski F | 7.8 |
- ▸Earnings quality RED FLAG: -220% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
3.9/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.5 |
| EPS growth | 2.2 |
Momentum
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 6.5 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 1.1 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.8 |
| Analyst rating | 7.5 |
| Price target | 6.1 |
- ▸LLM news sentiment: +0.55 (n=1)
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Negligible insider selling — $1,745,180 (0.003% of mkt cap)
- ▸Institutions accumulating
Peer rank
4.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 0.7 |
| quality rank | 5.7 |
| growth rank | 8.5 |
- ▸Industry growth leader
Technical
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.1 |
| support resistance | 1.6 |
| 52w position | 9.6 |
Risk (lower is worse)
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.2 |
| days to cover | 3.0 |
| volatility | 7.8 |
| put call | 9.9 |
| implied vol | 7.0 |
| max pain risk | 7.0 |
| beta | 10.0 |
| debt equity | 3.1 |
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 6.5 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 5.2 |
| dividend safety | 3.0 |
| news activity | 5.0 |
- ▸Strong earnings: 3B/1M
- ▸Earnings in 4 days
- ▸Yield trap warning: high yield but unsafe
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 (6)
- MOMENTUM:6.4>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:-0.7=NEGATIVE
- EARNINGS_PROXIMITY:4d<=7d
Warning (0)
none
Reward-to-Risk
-0.71
Upside
-3.5%
Downside
5.0%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 58, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
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 ( Insider at 7.3) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.7=NEGATIVE, EARNINGS_PROXIMITY:4d<=7d) reinforce the read. Current asymmetry R:R is -0.71 — supplementary context, not the trigger for this path.
The strongest dimensions are Insider at 7.3, Sentiment at 7.2, and Risk (lower is worse) at 6.9; the weakest are Growth at 3.9, Peer rank at 4.1, and Technical at 4.4. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -0.71 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Price Exceeds Target No Upside
Trip ifAnalyst consensus price target rises above $120, creating more than 8% of upside from current levels.
- P2Deeply Negative Free Cash Flow
Trip ifFree cash flow relative to net income turns positive and exceeds 0% for 2 consecutive annual reporting periods.
- P3Single Asset Regulatory Concentration
Trip ifDisclosed high-severity regulatory concentration items fall below 1 in the next annual risk factor filing.
- P4Earnings Consistency Partial Support
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.