Edison International

Comprehensive Analysis of EIX (Edison International)

Technical Analysis EIX exhibits strong bullish momentum with impressive gains of approximately 13% over one month and 20% over three months, markedly outperforming the broader market. Currently trading near its 52-week high in overbought territory, the stock may face near-term resistance despite its low volatility profile. While technical momentum is positive, investors should be cautious given limited immediate upside potential from current levels.

Fundamentals EIX demonstrates robust revenue growth and expanding profitability, with Q3 2025 revenue up 27% quarter-over-quarter and net profit margin improving to 15.4%. Financial health is acceptable for a utility, with moderate leverage and efficient working capital management, though the low interest coverage ratio warrants attention. Operational metrics like ROE and asset turnover are stable but reflect the capital-intensive nature of the utility sector.

Valuation The stock appears significantly undervalued based on earnings multiples, with a trailing P/E of 8.6 and a forward P/E near 6.0. The exceptionally low PEG ratio of 0.04 highlights attractive valuation when accounting for growth. While direct peer comparisons are unavailable, EIX’s conservative price-to-book ratio of 1.42 further supports a favorable valuation thesis.

Risk Assessment EIX carries below-market volatility (Beta of 0.83) and a manageable maximum drawdown of around 19%, consistent with its utility profile. Key risks involve regulatory changes, interest rate sensitivity, and operational cash flow stability, though minimal short interest reflects market confidence in its defensive characteristics.

Investment Recommendation EIX presents a compelling investment case driven by strong fundamentals, conservative valuation, and defensive attributes. Its recent operational improvements and undervalued earnings multiples provide a solid foundation for long-term growth, while its low beta offers stability. Despite being overbought short-term, the stock is suitable for investors seeking a dependable utility holding with upside potential.

*Note: This is not investment advice, for reference only.*

RockFlow Model Forecast: Three Scenarios for 2026

Based on my analysis of EIX, the 12-month outlook is positive, supported by strong operational performance and a compelling valuation.

Key catalysts for upside include the continuation of robust revenue growth and expanding profit margins, as demonstrated in recent quarterly results. The company's attractive valuation, particularly its low P/E and exceptionally low PEG ratio, provides a solid foundation for price appreciation as these operational improvements are recognized by the market.

Potential risks to monitor are primarily regulatory changes affecting the utility sector and the company's sensitivity to interest rate fluctuations, given its moderate leverage. While the stock is currently in overbought territory after its strong rally, presenting a near-term risk of consolidation, its low beta offers defensive stability.

Given the strong fundamentals and significant undervaluation relative to earnings growth, a target price range of $76-$82 over the next 12 months appears reasonable, implying potential upside of approximately 8-16% from the current price.

Wall Street Consensus

Most Wall Street analysts are optimistic about Edison International's 12-month outlook, with consensus target around $72.66, indicating expected upside potential.

Overall, EIX has investment potential but also faces challenges. Here are key factors to weigh before investing.

EIX is demonstrating strong bullish momentum with significant double-digit percentage gains over both one- and three-month timeframes. This impressive performance is further underscored by its substantial outperformance compared to the broader market.

Over the short term, EIX has surged 12.71% in the past month and 19.67% over the last three months, posting gains that are nearly 20 percentage points above the market benchmark. Given the stock's historically lower volatility indicated by its beta below 1.0, these returns are particularly notable for their magnitude.

Currently trading near its 52-week high of $72.68, EIX is in overbought territory, sitting well above its yearly low of $47.73 despite experiencing a maximum drawdown of nearly 20% during the year. This proximity to its yearly peak suggests limited immediate upside potential before potential resistance.

Revenue & Profitability: EIX demonstrated strong revenue growth and improving profitability in Q3 2025, with revenue increasing 26.6% quarter-over-quarter to $5.75 billion. The company's net profit margin expanded significantly to 15.4% from 8.8% in the previous quarter, reflecting enhanced operational leverage and cost management. This improvement is evident across all profit margins, with the operating income ratio rising from 17.1% to 24.9%.

Financial Health: EIX maintains moderate leverage with a debt ratio of 43.6% and a debt-to-equity ratio of 2.3, typical for a regulated utility. However, the interest coverage ratio of 2.9 remains relatively low, indicating limited cushion for interest expense coverage. The negative cash conversion cycle of -3.1 days demonstrates efficient working capital management, though the current ratio below 1 suggests reliance on stable utility cash flows rather than liquid assets.

Operational Efficiency: The company shows moderate operational efficiency with a return on equity of 5.2% and return on assets of 0.98%, reflective of the capital-intensive utility business model. Asset turnover remains low at 0.064, consistent with the infrastructure-heavy nature of utilities. Fixed asset turnover of 0.091 aligns with industry norms, indicating stable utilization of the company's substantial infrastructure investments.

Valuation Level: Edison International appears undervalued based on its earnings multiples. The TTM PE ratio of 8.63 and forward PE of approximately 6.0 are both very low, indicating strong earnings power relative to its current share price. Furthermore, the extremely low PEG ratio of 0.04 suggests the stock is significantly undervalued when factoring in its earnings growth prospects.

Peer Comparison: Without specific industry average data for comparison, definitive peer-based valuation conclusions cannot be drawn. However, the low PE ratios coupled with a modest price-to-book ratio of 1.42 generally indicate a conservative valuation profile relative to broader market standards. Further analysis with industry benchmarks would be needed to confirm its relative valuation positioning.

Volatility Risk EIX exhibits moderate volatility risk, with a Beta of 0.829 indicating lower fluctuation than the broader market. The 1-year maximum drawdown of -19.36% demonstrates a significant but manageable peak-to-trough decline, which is reasonable for a utility stock.

Other Risks A notable lack of short interest suggests strong market consensus on the stock's stability and outlook. As a regulated utility, primary risks are instead likely related to interest rate sensitivity, regulatory changes, and operational factors affecting liquidity and cash flows.