Value
7.8/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 7.9 |
| Fwd P/E | 4.1 |
| PEG | 10.0 |
| Analyst target | 9.0 |
- ▸Forward P/E: 29.7x
- ▸PEG: 0.23
- ▸Attractively valued
AADX · Why this verdict
Why Applied Aerospace & Defense, In (AADX) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score6.3/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Applied Aerospace & Defense is growing revenue rapidly (47% YoY) with a 99.0% upside to the analyst target, but weak profitability, a recent large earnings miss and a 59% drawdown make it a speculative holding.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Business quality is below the engine's 4.0 floor at 3.7, with operating margin and net margin scoring 0.0 out of 10 and gross margin at 1.1. Bear case | Operating margin turns positive and quality score improves above 4.0 as revenue scales. | →Stable |
| CounterDefense contractors in growth mode often reinvest heavily; low margins now could reflect integration costs rather than structural weakness. | ||
Strong growth of 47% YoY, with June 2026 quarter revenue of $167.3M versus $113.5M a year earlier. Growth breakdown | Quarterly revenue keeps growing toward the $170M next-quarter estimate and beyond over 12 months. | →Stable |
| CounterPart of the growth may be acquisition-driven or low-margin; growth has not translated into profit, with net and operating margin components scoring 0.0 out of 10. | ||
The latest quarter missed badly: EPS of -$0.25 versus a $0.01 estimate, with the next report in 18 days. Last 4 quarters | EPS comes in at or above estimates in the next two reports, restoring credibility. | ↑Improving |
| CounterA single quarter of data makes the miss hard to read, but a swing from expected profit to a loss suggests estimates are unreliable. | ||
The $19.90 analyst target implies 99.0% upside from the $10.00 price, with a reward-to-risk of 6.8. Analyst target | Price re-rates toward the analyst target if growth continues and margins stabilize. | ↓Deteriorating |
| CounterAnalyst coverage is light, so the target may be stale, and forward P/E is still 25.2x despite the drawdown. | ||
Momentum is weak at 2.1/10 with falling on-balance volume, a 59% drawdown from the 52-week high, and implied volatility of 95%. Momentum breakdown | Volume accumulation returns and momentum rises above 4.5/10 as selling pressure eases. | ↑Improving |
| CounterHeavy drawdowns plus institutional accumulation can mark a bottom, and a 59% decline may already discount the weak quality. | ||
Business quality is below the engine's 4.0 floor at 3.7, with operating margin and net margin scoring 0.0 out of 10 and gross margin at 1.1.
→StableBear case
- Expectation
- Operating margin turns positive and quality score improves above 4.0 as revenue scales.
CounterDefense contractors in growth mode often reinvest heavily; low margins now could reflect integration costs rather than structural weakness.
Strong growth of 47% YoY, with June 2026 quarter revenue of $167.3M versus $113.5M a year earlier.
→StableGrowth breakdown
- Expectation
- Quarterly revenue keeps growing toward the $170M next-quarter estimate and beyond over 12 months.
CounterPart of the growth may be acquisition-driven or low-margin; growth has not translated into profit, with net and operating margin components scoring 0.0 out of 10.
The latest quarter missed badly: EPS of -$0.25 versus a $0.01 estimate, with the next report in 18 days.
↑ImprovingLast 4 quarters
- Expectation
- EPS comes in at or above estimates in the next two reports, restoring credibility.
CounterA single quarter of data makes the miss hard to read, but a swing from expected profit to a loss suggests estimates are unreliable.
The $19.90 analyst target implies 99.0% upside from the $10.00 price, with a reward-to-risk of 6.8.
↓DeterioratingAnalyst target
- Expectation
- Price re-rates toward the analyst target if growth continues and margins stabilize.
CounterAnalyst coverage is light, so the target may be stale, and forward P/E is still 25.2x despite the drawdown.
Momentum is weak at 2.1/10 with falling on-balance volume, a 59% drawdown from the 52-week high, and implied volatility of 95%.
↑ImprovingMomentum breakdown
- Expectation
- Volume accumulation returns and momentum rises above 4.5/10 as selling pressure eases.
CounterHeavy drawdowns plus institutional accumulation can mark a bottom, and a 59% decline may already discount the weak quality.
Per-dimension breakdown
Quality
3.7/10data confidence 86%| Component | Sub-score |
|---|---|
| Gross margin | 1.1 |
| Op margin | 0.0 |
| Net margin | 0.0 |
| Current ratio | 8.5 |
| Moat | 5.8 |
| Piotroski F | 6.7 |
Growth
10.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 10.0 |
- ▸Strong growth: 47% YoY
Momentum
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 9.4 |
| OBV | 10.0 |
| MA position | 5.5 |
| Volume | 2.9 |
- ▸Volume accumulation (rising OBV)
Sentiment
7.7/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.4 |
| Analyst rating | 7.9 |
| Price target | 10.0 |
- ▸Light analyst coverage (8.0) — signal dampened
- ▸Analyst upside: 90%
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
4.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.6 |
| quality rank | 0.7 |
| growth rank | 8.0 |
- ▸Industry growth leader
Technical
1.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.0 |
| support resistance | 2.6 |
| 52w position | 0.0 |
Risk (lower is worse)
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| days to cover | 7.8 |
| volatility | 0.0 |
| put call | 10.0 |
| implied vol | 0.0 |
| max pain risk | 3.0 |
| debt equity | 7.9 |
- ▸High IV: 88%
- ▸Above max pain $2
Catalyst
3.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| news activity | 6.0 |
- ▸Earnings in 11 days
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (6)
- MOMENTUM:6.5>=5.5
- ASYMMETRY:4.4>=1.5
- INSIDER:OK
- 8K:CLEAN
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (1)
- EARNINGS_PROXIMITY:11d<=14d (soft)
Reward-to-Risk
4.37
Upside
+65.6%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Drawdown -51% (>40% off 52w high)
Investment implication
The SELL_IF_HOLDING verdict reflects clean gate clearance against Growth at 10.0 and asymmetric R:R of 4.37.
The strongest dimensions are Growth at 10.0, Value at 7.8, and Sentiment at 7.7; the weakest are Technical at 1.5, Catalyst at 3.2, and Quality at 3.7. The V9 engine cleared all gates with 1 warning, producing an asymmetric reward-to-risk of 4.37 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Rapid Revenue Growth
Trip ifQuarterly revenue falls below $150M from $167.3M in the June 2026 quarter.
- P2Weak Profitability Quality
Trip ifOperating margin stays below 0% for 4 consecutive quarters.
- P3Recent Earnings Miss
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P4Analyst Target Upside
Trip ifAnalyst target falls below $14 from the current $19.90.
- P5Negative Price Momentum
Trip ifPrice falls below the $9.30 stop level, more than 7% under the current $10.00.