Value
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 5.8 |
| P/S | 8.3 |
| EV/EBITDA | 4.0 |
| Fwd P/E | 6.8 |
| PEG | 4.1 |
| Analyst target | 6.0 |
- ▸Forward P/E: 18.6x
- ▸PEG: 2.38
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.
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 score4.7/10
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. | ↓Deteriorating |
| 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. | ↓Deteriorating |
| 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. | Tripped↓Deteriorating |
| 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. | ↓Deteriorating |
| 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.
↓DeterioratingCatalyst 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.
↓DeterioratingQuality 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.
Tripped↓DeterioratingWarnings
- 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.
↓DeterioratingMomentum 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
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.8 |
| ROA | 2.2 |
| Gross margin | 6.2 |
| Op margin | 6.9 |
| Net margin | 6.6 |
| Current ratio | 2.0 |
| FCF quality | 0.0 |
| Moat | 5.2 |
| Piotroski F | 6.7 |
- ▸Earnings quality RED FLAG: -196% FCF/NI
- ▸No competitive moat
Growth
1.9/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.7 |
| EPS growth | 0.0 |
Momentum
2.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.0 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 2.2 |
| Volume | 3.9 |
- ▸Capitulation risk (RSI 16, below 200MA)
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA but MA still rising (+1.3%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.0 |
| Analyst rating | 7.3 |
| Price target | 7.6 |
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Insider selling (low materiality) — $2,255,691 (0.011% of mkt cap)
- ▸Institutions accumulating
Peer rank
3.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.8 |
| quality rank | 5.0 |
| growth rank | 4.3 |
Technical
8.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 9.1 |
| support resistance | 8.9 |
| 52w position | 7.2 |
Risk (lower is worse)
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.2 |
| days to cover | 8.0 |
| volatility | 6.9 |
| put call | 3.6 |
| implied vol | 4.4 |
| beta | 9.7 |
| debt equity | 4.1 |
Catalyst
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 2.8 |
| dividend safety | 3.0 |
| news activity | 5.0 |
- ▸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 (5)
- INSIDER:OK
- 8K:CLEAN
- EARNINGS_PROXIMITY:77d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:2.0<4.5
- ASYMMETRY:1.4<1.5@spot
Warning (0)
none
Reward-to-Risk
1.45
Upside
+7.2%
Downside
5.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 4.2 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Technical at 8.4) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:2.0<4.5, ASYMMETRY:1.4<1.5@spot) reinforce the read. Current asymmetry R:R is 1.45 — supplementary context, not the trigger for this path.
The strongest dimensions are Technical at 8.4, Insider at 7.3, and Sentiment at 7.0; the weakest are Growth at 1.9, Momentum at 2.0, and Peer rank at 3.7. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of 1.45 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Utility Earnings Beat Streak
Trip ifEPS surprise falls below -5% in at least 2 of the next 4 quarters.
- P2Negative Free Cash Flow Quality
Trip ifFree cash flow deficit worsens below -200% of net income for 2 consecutive quarters.
- P3Price Above Analyst TargetTripped
Trip ifAnalyst consensus price target falls below $44 or price declines more than 5% below the 200-day moving average.
- P4Strong Momentum Breakout
Trip ifMomentum score falls below 5.0 or on-balance volume declines for more than 8 consecutive weeks.