Value
8.2/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 8.3 |
| P/S | 9.3 |
| EV/EBITDA | 5.9 |
| Fwd P/E | 9.3 |
| PEG | 8.5 |
| Analyst target | 7.5 |
- ▸Forward P/E: 9.7x
- ▸PEG: 0.75
- ▸Attractively valued
PCG · Why this verdict
Why Pacific Gas & Electric (PCG) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictBUY WAIT
Overall score6.5/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Pacific Gas & Electric ranks as an industry growth leader for regulated utilities with rising earnings and 23% analyst upside at a forward P/E of 9.2x, though negative free cash flow of 196% relative to net income and heavy California geographic concentration temper the quality case.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Despite negative free cash flow at 196% relative to net income — a red flag — the strong Piotroski F-Score of 7/9 and 9.6% operating margin indicate the operating business is fundamentally sound even if capital expenditure-heavy investments temporarily depress cash flow. Quality breakdown | Free cash flow deficit narrows to below 100% of net income within 4 quarters as capital-intensive infrastructure projects begin generating returns. | →Stable |
| CounterNegative FCF of this magnitude in a regulated utility reflects ongoing heavy capital spending that may not generate regulated returns for years; dividend sustainability depends entirely on the company's ability to raise external capital, which is sensitive to interest rate movements. | ||
Pacific Gas & Electric ranks as an industry growth leader among regulated electric utilities, trading at a forward P/E of 9.2x with 23% analyst upside to roughly $20.33 and a PEG ratio of 0.72 — pricing in below-average growth in a business that is growing above its sector peers. Peer-rank breakdown | Price rises above $19.00 within 12 months as earnings growth is recognized and the valuation discount narrows. | →Stable |
| CounterPG&E carries a high debt-to-equity ratio with a leverage penalty, operates exclusively in Northern and Central California with concentrated wildfire liability, and negative free cash flow of 196% of net income undermines the earnings quality of the utility's reported results. | ||
PG&E has beaten earnings estimates in 2 of the last 4 quarters with average positive surprises of 9% and 17% in the beat quarters, demonstrating the regulated utility's ability to deliver earnings above the conservatively set utility estimates. Earnings | Earnings beat consensus by more than 5% in at least 2 of the next 4 quarters, sustaining the beat cadence. | ↑Improving |
| CounterOne recent miss was negative 1.9% and the company has had an inline result; the utility earnings track record is uneven and may reflect the difficulty of forecasting regulatory cost recovery timing rather than operational outperformance. | ||
Pacific Gas & Electric trades above its 200-day moving average with a momentum score of 6.9 and rising on-balance volume, indicating buyers are sustaining the uptrend in the regulated utility space. Momentum breakdown | Price holds above the 200-day moving average for at least 6 consecutive months while on-balance volume trends upward. | ↑Improving |
| CounterThe technical picture is range-bound with RSI at 53 and Bollinger mid-band — positive but not strongly directional; a broader utility selloff driven by rate concerns could break the 200-day support quickly. | ||
Despite negative free cash flow at 196% relative to net income — a red flag — the strong Piotroski F-Score of 7/9 and 9.6% operating margin indicate the operating business is fundamentally sound even if capital expenditure-heavy investments temporarily depress cash flow.
→StableQuality breakdown
- Expectation
- Free cash flow deficit narrows to below 100% of net income within 4 quarters as capital-intensive infrastructure projects begin generating returns.
CounterNegative FCF of this magnitude in a regulated utility reflects ongoing heavy capital spending that may not generate regulated returns for years; dividend sustainability depends entirely on the company's ability to raise external capital, which is sensitive to interest rate movements.
Pacific Gas & Electric ranks as an industry growth leader among regulated electric utilities, trading at a forward P/E of 9.2x with 23% analyst upside to roughly $20.33 and a PEG ratio of 0.72 — pricing in below-average growth in a business that is growing above its sector peers.
→StablePeer-rank breakdown
- Expectation
- Price rises above $19.00 within 12 months as earnings growth is recognized and the valuation discount narrows.
CounterPG&E carries a high debt-to-equity ratio with a leverage penalty, operates exclusively in Northern and Central California with concentrated wildfire liability, and negative free cash flow of 196% of net income undermines the earnings quality of the utility's reported results.
PG&E has beaten earnings estimates in 2 of the last 4 quarters with average positive surprises of 9% and 17% in the beat quarters, demonstrating the regulated utility's ability to deliver earnings above the conservatively set utility estimates.
↑ImprovingEarnings
- Expectation
- Earnings beat consensus by more than 5% in at least 2 of the next 4 quarters, sustaining the beat cadence.
CounterOne recent miss was negative 1.9% and the company has had an inline result; the utility earnings track record is uneven and may reflect the difficulty of forecasting regulatory cost recovery timing rather than operational outperformance.
Pacific Gas & Electric trades above its 200-day moving average with a momentum score of 6.9 and rising on-balance volume, indicating buyers are sustaining the uptrend in the regulated utility space.
↑ImprovingMomentum breakdown
- Expectation
- Price holds above the 200-day moving average for at least 6 consecutive months while on-balance volume trends upward.
CounterThe technical picture is range-bound with RSI at 53 and Bollinger mid-band — positive but not strongly directional; a broader utility selloff driven by rate concerns could break the 200-day support quickly.
Per-dimension breakdown
Quality
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.9 |
| ROA | 1.7 |
| Gross margin | 3.9 |
| Op margin | 9.6 |
| Net margin | 5.5 |
| Current ratio | 4.6 |
| FCF quality | 0.0 |
| Moat | 5.6 |
| Piotroski F | 7.8 |
- ▸Earnings quality RED FLAG: -196% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
8.1/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 6.2 |
| EPS growth | 10.0 |
Momentum
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 6.9 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 3.8 |
| Analyst rating | 7.3 |
| Price target | 8.7 |
- ▸Analyst upside: 31%
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 9.8 |
| notable moves | 7.0 |
- ▸Negligible insider selling — $1,835,769 (0.005% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.8 |
| quality rank | 2.3 |
| growth rank | 8.5 |
- ▸Industry growth leader
Technical
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.5 |
| support resistance | 3.1 |
| 52w position | 8.3 |
Risk (lower is worse)
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 10.0 |
| volatility | 7.3 |
| put call | 6.2 |
| implied vol | 3.4 |
| max pain risk | 3.0 |
| beta | 10.0 |
| debt equity | 3.2 |
| news risk | 5.5 |
- ▸Above max pain $9
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 5.4 |
| dividend safety | 4.3 |
| news activity | 7.0 |
- ▸Earnings in 2 days
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Earnings in 2 days. Wait until post-earnings.
Engine technical detail
verdict_path:
L3:NEWS_BLOCK|ENTRY_STICKY:WITHIN_BANDPassed (7)
- MOMENTUM:6.2>=5.5
- ASYMMETRY:3.5>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- EARNINGS_PROXIMITY:2d<=7d
Warning (0)
none
Reward-to-Risk
3.45
Upside
+17.9%
Downside
5.2%
Sizing output
STARTER
SetupBreakout — Golden cross, above all MAs, RSI 64, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
A recent news event triggered an L3 news-block on the verdict path. Trigger: Earnings in 2 days. Wait until post-earnings. The 10-dimension scores remain Value at 8.2 (strongest), but EARNINGS_PROXIMITY:2d<=7d also fails — the news block is the proximate trigger, not the sole driver.
The strongest dimensions are Value at 8.2, Growth at 8.1, and Insider at 7.3; the weakest are Technical at 4.6, Quality at 4.6, and Peer rank at 5.2. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of 3.45 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Utility Growth Leader Valuation
Trip ifAnalyst consensus price target falls below $17 for 2 consecutive months, eliminating the valuation discount thesis.
- P2Earnings Growth Beat Cadence
Trip ifEarnings miss consensus by more than 8% in 2 of the next 4 quarters, reversing the beat cadence.
- P3Above 200ma Momentum Support
Trip ifPrice drops below the 200-day moving average and holds below that level for more than 15 consecutive trading days.
- P4Fcf Deficit Quality Concern
Trip ifFree cash flow deficit exceeds 250% of net income for 2 consecutive quarters, indicating the capital spending program is intensifying beyond current levels.