Do not mark downgrades as updates (#68893)

homeassistant/components/update/__init__.py

@@ -6,6 +6,7 @@ from datetime import timedelta
 import logging
 from typing import Any, Final, final
 
+from awesomeversion import AwesomeVersion, AwesomeVersionCompareException
 import voluptuous as vol
 
 from homeassistant.backports.enum import StrEnum
@@ -295,9 +296,15 @@ class UpdateEntity(RestoreEntity):
         ) is None:
             return None
 
-        if latest_version not in (current_version, self.__skipped_version):
-            return STATE_ON
-        return STATE_OFF
+        if latest_version == self.__skipped_version:
+            return STATE_OFF
+
+        try:
+            newer = AwesomeVersion(latest_version) > current_version
+            return STATE_ON if newer else STATE_OFF
+        except AwesomeVersionCompareException:
+            # Can't compare versions, fallback to exact match
+            return STATE_OFF if latest_version == current_version else STATE_ON
 
     @final
     @property

tests/components/update/test_init.py

@@ -89,6 +89,16 @@ async def test_update(hass: HomeAssistant) -> None:
     update._attr_latest_version = None
     assert update.state is None
 
+    # Test no update if new version is not an update
+    update._attr_current_version = "1.0.0"
+    update._attr_latest_version = "0.9.0"
+    assert update.state is STATE_OFF
+
+    # Test update if new version is not considered a valid version
+    update._attr_current_version = "1.0.0"
+    update._attr_latest_version = "awesome_update"
+    assert update.state is STATE_ON
+
     # Test entity category becomes config when its possible to install
     update._attr_supported_features = UpdateEntityFeature.INSTALL
     assert update.entity_category is EntityCategory.CONFIG