Edison International (EIX) Stock Valuation — DCF Analysis
Regulated Electric · NYSE
Current Price
$72.95
Intrinsic Value
Use the calculator below to estimate
COMPETITIVE MOAT
↑Regulated Monopoly Power
Edison International operates as a regulated utility, granting it exclusive rights to serve specific geographic areas. This prevents direct competition and ensures a stable customer base.
↑High Capital Intensity
The electric utility industry requires massive, ongoing investment in infrastructure. This creates a significant barrier to entry for potential new competitors.
↑Essential Service Demand
Electricity is a fundamental necessity for modern life. Demand for Edison's services is relatively inelastic, providing a consistent revenue stream.
INVESTMENT RISKS
↓Wildfire Liabilities
Significant financial exposure exists from wildfire damage claims, as evidenced by the substantial relief offered for the Eaton Fire. This can lead to large, unpredictable costs.
↓Regulatory Scrutiny and Rate Cases
Edison's profitability is subject to the decisions of regulatory bodies. Unfavorable rate decisions or increased compliance costs can negatively impact earnings.
↓Transition to Renewables
The shift towards renewable energy sources requires substantial capital investment and may alter the traditional utility business model, posing strategic challenges.
Customize the EIX valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Edison International respond.
Open DCF Calculator for EIXCompany Overview
Headquartered in Rosemead, California, and established in 1886, Edison International primarily operates through its subsidiaries to produce and supply electrical power. This utility company furnishes electricity to a vast client base of around 15 million, encompassing homes, businesses, industrial sites, governmental bodies, and agricultural enterprises throughout Southern, Central, and Coastal California. Beyond power delivery, Edison International also offers bespoke energy solutions tailored for its commercial and industrial clientele. Its extensive infrastructure includes a robust transmission network featuring lines that range from 55 kV to 500 kV, alongside numerous substations. The company's distribution system is equally substantial, comprising approximately 39,000 circuit-miles of overhead cabling, roughly 31,000 circuit-miles of underground lines, and 800 distribution substations.
Financial Metrics — EIX Stock Valuation Data
Revenue/Share (TTM)
$50.93
FCF/Share (TTM)
$-1.67
ROIC (TTM)
3.8%
ROE (TTM)
21.5%
P/FCF
n/m
EV/EBITDA
9.4x
FCF Yield
-2.29%
Debt/Equity
2.47x
EIX currently has negative free cash flow, so cash-flow ratios such as P/FCF and FCF yield do not give a meaningful read on whether the stock is cheap or expensive. A DCF valuation is unreliable until cash generation turns positive — focus on the path to profitability instead.
Frequently Asked Questions
What is the intrinsic value of EIX?
Edison International currently generates $-1.67 in free cash flow per share. At the current price of $72.95, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is EIX undervalued?
EIX currently has negative free cash flow, so its P/FCF ratio is not meaningful and cannot tell you whether the stock is cheap or expensive. With cash flow negative, a DCF-based undervalued or overvalued judgment is unreliable — look at the path back to positive cash generation instead.
How do I value EIX stock using DCF?
To perform a DCF valuation on Edison International: (1) Start with the trailing free cash flow per share ($-1.67) as the base, (2) project future FCF growth over 5-10 years based on Regulated Electric industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting EIX's risk profile — with a debt-to-equity of 2.47x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to EIX?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Edison International, this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Regulated Electric trends, then discounting those amounts to today's dollars. EIX's ROIC of 3.8% suggests the company may face challenges generating returns above its cost of capital.
How does WACC affect EIX stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For EIX, with a debt-to-equity ratio of 2.47x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 9.4x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See EIX PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Utilities valuationsDCF and P/E value EIX with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.