Value
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.9 |
| P/S | 8.5 |
| EV/EBITDA | 3.8 |
| Fwd P/E | 7.0 |
| PEG | 3.8 |
| Analyst target | 3.0 |
- ▸Forward P/E: 18.1x
- ▸PEG: 2.89
NWE · Why this verdict
Why NorthWestern Energy Group (NWE) 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
NorthWestern Energy beat earnings estimates in 3 of the last 4 quarters and shows strong technical momentum with a golden cross and rising on-balance volume, but free cash flow is deeply negative at negative 112% of net income, the dividend is flagged as potentially unsafe, and the stock has already exceeded analyst price targets.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
NorthWestern Energy beat EPS estimates in 3 of the last 4 quarters with an average positive surprise of 2.7%, demonstrating consistent execution within the predictable earnings framework of a regulated electric utility. Earnings | EPS surprise remains positive in at least 3 of the next 4 quarters, maintaining the beat track record. | ↓Deteriorating |
| CounterA single miss in February 2026 and an average surprise of only 2.7% are modest, and in a regulated utility any change in allowed rates or cost recovery mechanisms could turn modest beats into misses. | ||
Free cash flow is negative at negative 112% of net income, meaning the company is spending significantly more cash than its reported earnings indicate, which is flagged as an earnings quality red flag and raises questions about the sustainability of capital spending and dividend coverage. Quality breakdown | Free cash flow improves to within negative 50% of net income within 4 quarters as capital expenditure programs move through their peak spending phase. | →Stable |
| CounterRegulated utilities routinely have free cash flow significantly below net income because of large capital investment in transmission and distribution infrastructure, where the spending is rate-base that earns a regulated return over decades. | ||
A golden cross, rising on-balance volume, price above all moving averages, and a bullish MACD all confirm positive technical momentum that has historically been associated with sustained price appreciation in breakout setups. Momentum breakdown | Price remains above the 200-day moving average for at least 6 consecutive months, confirming the breakout is holding. | ↓Deteriorating |
| CounterThe stock is already within negative 12.2% of analyst targets and the overall score is a weak 4.5/10, meaning the technical breakout may already be reflecting the remaining fundamental upside rather than signaling further appreciation. | ||
The debt-to-equity ratio triggers a leverage penalty and the dividend is flagged as a high yield that appears unsafe, indicating that the company may be paying out more to shareholders than its cash generation can sustain over a full capital cycle. Catalyst breakdown | The company maintains its current dividend level without a cut for at least 4 consecutive quarters, demonstrating that the payout is covered by regulated cash flows. | ↓Deteriorating |
| CounterRegulated utilities can sustain higher payout ratios than unregulated businesses because the regulator essentially guarantees the recovery of capital expenditures and operating costs through future rate cases. | ||
NorthWestern Energy beat EPS estimates in 3 of the last 4 quarters with an average positive surprise of 2.7%, demonstrating consistent execution within the predictable earnings framework of a regulated electric utility.
↓DeterioratingEarnings
- Expectation
- EPS surprise remains positive in at least 3 of the next 4 quarters, maintaining the beat track record.
CounterA single miss in February 2026 and an average surprise of only 2.7% are modest, and in a regulated utility any change in allowed rates or cost recovery mechanisms could turn modest beats into misses.
Free cash flow is negative at negative 112% of net income, meaning the company is spending significantly more cash than its reported earnings indicate, which is flagged as an earnings quality red flag and raises questions about the sustainability of capital spending and dividend coverage.
→StableQuality breakdown
- Expectation
- Free cash flow improves to within negative 50% of net income within 4 quarters as capital expenditure programs move through their peak spending phase.
CounterRegulated utilities routinely have free cash flow significantly below net income because of large capital investment in transmission and distribution infrastructure, where the spending is rate-base that earns a regulated return over decades.
A golden cross, rising on-balance volume, price above all moving averages, and a bullish MACD all confirm positive technical momentum that has historically been associated with sustained price appreciation in breakout setups.
↓DeterioratingMomentum breakdown
- Expectation
- Price remains above the 200-day moving average for at least 6 consecutive months, confirming the breakout is holding.
CounterThe stock is already within negative 12.2% of analyst targets and the overall score is a weak 4.5/10, meaning the technical breakout may already be reflecting the remaining fundamental upside rather than signaling further appreciation.
The debt-to-equity ratio triggers a leverage penalty and the dividend is flagged as a high yield that appears unsafe, indicating that the company may be paying out more to shareholders than its cash generation can sustain over a full capital cycle.
↓DeterioratingCatalyst breakdown
- Expectation
- The company maintains its current dividend level without a cut for at least 4 consecutive quarters, demonstrating that the payout is covered by regulated cash flows.
CounterRegulated utilities can sustain higher payout ratios than unregulated businesses because the regulator essentially guarantees the recovery of capital expenditures and operating costs through future rate cases.
Per-dimension breakdown
Quality
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.0 |
| ROA | 1.7 |
| Gross margin | 7.1 |
| Op margin | 6.9 |
| Net margin | 5.1 |
| Current ratio | 3.3 |
| FCF quality | 0.0 |
| Moat | 6.4 |
| Piotroski F | 7.8 |
- ▸Earnings quality RED FLAG: -142% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
5.7/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 6.2 |
| EPS growth | 5.1 |
Momentum
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 8.1 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 1.1 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.6 |
| Price target | 5.5 |
| erm sentiment | 6.0 |
- ▸Light analyst coverage (6.0) — signal dampened
Insider
5.5/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 6.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
4.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.8 |
| quality rank | 1.0 |
| growth rank | 8.8 |
- ▸Industry growth leader
Technical
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.5 |
| support resistance | 3.2 |
| 52w position | 9.3 |
Risk (lower is worse)
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.5 |
| days to cover | 6.8 |
| volatility | 6.9 |
| put call | 9.3 |
| implied vol | 0.0 |
| beta | 10.0 |
| debt equity | 4.5 |
- ▸High IV: 95%
- ▸Concentration risks: 2 MED (10-K Item 1A)
Catalyst
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 6.5 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 5.0 |
| dividend safety | 2.0 |
- ▸Strong earnings: 3B/1M
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position. | News modifier +1 (SELL_IF_HOLDING → HOLD_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_F_SELL|L3:NEWS_MOD=+1Passed (7)
- MOMENTUM:4.9>=4.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:73d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-2.0=NEGATIVE
Warning (1)
- MOMENTUM:4.9<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
-2.01
Upside
-10.0%
Downside
5.0%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 48, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $4.4B<$5B
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 ( Risk (lower is worse) at 6.6) 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 Risk (lower is worse) at 6.6, Sentiment at 6.1, and Growth at 5.7; the weakest are Quality at 4.5, Peer rank at 4.8, and Momentum at 4.9. 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.
- P1Earnings Beat Streak Regulated Utility
Trip ifEPS surprise falls below negative 5% in at least 2 of the next 4 quarters.
- P2Negative Fcf Versus Earnings
Trip ifFree cash flow declines to more than negative 150% of net income for 2 consecutive quarters.
- P3Technical Breakout Momentum
Trip ifPrice falls below the 200-day moving average and remains below for more than 20 trading days.
- P4Leverage And Dividend Sustainability
Trip ifA dividend cut of more than 15% is announced or the debt-to-equity ratio rises above 1.8.