NiSource Inc.

Analysis of NI Stock

Technical Perspective NI exhibits strong momentum, significantly outperforming the market with a 7% monthly gain and low volatility (Beta 0.65), indicating stable upward movement. However, trading near its 52-week high of $47.05 suggests the stock may be overbought in the short term after its sharp 10% annual appreciation, posing a risk of near-term consolidation.

Fundamental Outlook The company shows impressive operational improvement, with Q4 revenue surging 49% sequentially and net profit margin expanding to 13.5%, reflecting strong execution. However, concerning liquidity (current ratio 0.69) and weak returns on equity (2.7%) highlight balance sheet inefficiencies that need monitoring despite the evident earnings momentum.

Valuation & Risk Assessment NI presents a mixed valuation picture: its low PEG ratio (0.11) signals attractive growth potential relative to price, yet the high EV/EBITDA (43.2) implies premium pricing on cash flow. Risks appear manageable given below-market volatility and limited short interest, though the lack of peer comparables makes contextual assessment difficult.

Recommendation NI is a compelling buy for growth-oriented investors, supported by strong earnings momentum, improving profitability, and reasonable forward P/E. While liquidity metrics and high valuation multiples warrant caution, the stock’s consistent outperformance with low volatility justifies accumulation on any minor pullbacks. The promising PEG ratio underscores significant growth not yet fully priced in.

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

RockFlow Model Forecast: Three Scenarios for 2026

Based on the provided analysis, NI's 12-month outlook appears cautiously optimistic, driven by strong operational execution but tempered by valuation and balance sheet concerns.

Key Catalysts: The primary drivers will be the continuation of the impressive earnings momentum, as evidenced by the 49% sequential Q4 revenue surge and expanding profit margins. The extremely low PEG ratio suggests the market may not have fully priced in this growth potential.

Potential Risks: The stock faces near-term technical risk of consolidation after trading near its 52-week high. Fundamentally, the weak liquidity (current ratio of 0.69) and premium valuation multiples (EV/EBITDA of 43.2) pose significant risks if execution falters or macroeconomic conditions worsen.

Target Price Range: While an analyst target was not provided, the recommendation to "accumulate on any minor pullbacks" suggests a positive outlook. Given the current price of $46.71 and its proximity to the 52-week high, a reasonable 12-month target range could be $50-$55, contingent on the company maintaining its operational improvement.

Wall Street Consensus

Most Wall Street analysts are optimistic about NiSource Inc.'s 12-month outlook, with consensus target around $45.82, indicating expected upside potential.

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

NI has demonstrated consistent outperformance versus the market, characterized by steady upward momentum and relatively low volatility.

The stock has delivered strong short-term gains, rising over 7% in the past month and approximately 6.3% over three months, significantly outpacing the broader market by over 6%. This performance, coupled with its low beta of 0.65, indicates the gains have been achieved with notably less volatility than the market average.

Currently trading at $46.71, NI is near the peak of its 52-week range, sitting just below its high of $47.05. Given its sharp appreciation and minimal drawdown of only -10% over the past year, the stock appears to be in an overbought condition at these elevated levels.

Revenue & Profitability NI demonstrated strong sequential improvement in Q4 2025, with revenue growing 49% from the previous quarter to $1.9 billion. Profitability metrics improved significantly, with gross profit margin expanding to 58.1% and net profit margin reaching 13.5%, up from 7.4% in Q3. The company's operating income ratio of 27.1% indicates solid operational control during the quarter.

Financial Health The company maintains moderate leverage with a debt-to-equity ratio of 1.72 and total debt to capitalization of 63.2%. However, liquidity concerns are evident with a current ratio of 0.69 and quick ratio of 0.56, while the interest coverage ratio of 2.75 suggests adequate but not robust earnings coverage for interest obligations. Cash flow generation appears constrained with negative free cash flow per share.

Operational Efficiency NI's operational efficiency shows mixed results, with a return on equity of 2.7% and return on assets of 0.7% indicating suboptimal capital utilization. The asset turnover ratio of 0.05 reflects relatively low revenue generation from the asset base, though the negative cash conversion cycle of -30.6 days demonstrates efficient working capital management with favorable payment terms.

Based on the PE ratios, NI appears reasonably valued with a forward multiple of approximately 19.2, which is lower than its trailing PE of 25.4, suggesting expected earnings growth. The stock appears significantly undervalued based on its PEG ratio of 0.11, which indicates the market price doesn't fully reflect its strong growth prospects relative to earnings. However, the elevated EV/EBITDA of 43.2 presents a contrasting signal of potential overvaluation on a cash flow basis.

A peer comparison cannot be conducted as industry average data is unavailable. The absence of benchmark metrics makes it impossible to determine how NI's valuation multiples compare to sector norms. This lack of contextual data limits the completeness of the valuation assessment.

Volatility risk is moderate, as indicated by a Beta of 0.651, suggesting the stock is approximately 35% less volatile than the broader market. The maximum drawdown of -9.99% over the past year reflects relatively modest downside movement, pointing to a stable price history with contained volatility.

Other risks appear limited, with the notable absence of significant short interest suggesting a lack of widespread negative sentiment from speculative traders. The primary consideration would be liquidity, which, while not quantified here, should be assessed relative to average trading volume to ensure orderly execution for the intended position size.