Value
7.7/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 7.8 |
| Fwd P/E | 3.9 |
| PEG | 10.0 |
| Analyst target | 9.0 |
- ▸Forward P/E: 30.5x
- ▸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.
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VerdictSELL
Overall score5.9/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
AADX offers a deep valuation discount and strong reported revenue growth, but the engine's quality and momentum scores sit below required thresholds even as insiders keep buying, leaving the setup speculative and dependent on a technical bounce rather than a confirmed trend reversal.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
AADX trades roughly 64.5% below the current analyst price target, with the value dimension citing a PEG of 0.24 and 'Attractively valued' despite a 33.2x forward P/E. Valuation breakdown | The value dimension score (currently 7.5) should hold or rise as shares re-rate toward the analyst target over the next 12 months. | →Stable |
| CounterWeak business quality and a failed momentum gate could keep the discount from closing even if the multiple looks cheap on paper. | ||
The growth dimension scores a maximum 10.0, with reported growth of 47% YoY cited as the driver of that score. Growth breakdown | Revenue growth should remain in strong double digits YoY over the next 12 months, sustaining the current pace. | →Stable |
| CounterEarnings quality is weak beneath the top-line growth: the latest quarter's actual EPS badly missed estimate (-0.25 vs 0.01, a -2558% surprise). | ||
Business quality sits below the engine's minimum floor, with the bear case flagging a quality score of 3.7 against a required 4.0 floor. Bear case | Quality score should stay at or below 4.0 with margins remaining compressed, consistent with continued weak core profitability. | ↓Deteriorating |
| CounterA Piotroski F-score of 6.7 and a current ratio of 8.5 suggest underlying balance-sheet health that could support a quality recovery. | ||
The engine's momentum gate failed outright, with price in capitulation territory (RSI near 4, below the 200-day moving average) and the setup flagged as an oversold bounce rather than a durable trend. Engine gate (failed) | Momentum score should recover above the engine's threshold, with RSI moving out of oversold territory over the next 12 months. | →Stable |
| CounterElevated bollinger and support/resistance technical scores (9.0 and 9.9) suggest price is near a support zone that could produce a bounce even without a full momentum recovery. | ||
Insiders have been net buyers, with 4 buy transactions and zero sells over the past 90 days (net +58,500 shares) and institutions accumulating, producing a bullish insider signal. Insider transaction read | The insider signal should remain bullish, with continued net-positive share accumulation over the next 12 months. | →Stable |
| CounterThe signal relies on a share-count fallback with no dollar value disclosed, so the buying's materiality relative to market cap is unclear. | ||
AADX trades roughly 64.5% below the current analyst price target, with the value dimension citing a PEG of 0.24 and 'Attractively valued' despite a 33.2x forward P/E.
→StableValuation breakdown
- Expectation
- The value dimension score (currently 7.5) should hold or rise as shares re-rate toward the analyst target over the next 12 months.
CounterWeak business quality and a failed momentum gate could keep the discount from closing even if the multiple looks cheap on paper.
The growth dimension scores a maximum 10.0, with reported growth of 47% YoY cited as the driver of that score.
→StableGrowth breakdown
- Expectation
- Revenue growth should remain in strong double digits YoY over the next 12 months, sustaining the current pace.
CounterEarnings quality is weak beneath the top-line growth: the latest quarter's actual EPS badly missed estimate (-0.25 vs 0.01, a -2558% surprise).
Business quality sits below the engine's minimum floor, with the bear case flagging a quality score of 3.7 against a required 4.0 floor.
↓DeterioratingBear case
- Expectation
- Quality score should stay at or below 4.0 with margins remaining compressed, consistent with continued weak core profitability.
CounterA Piotroski F-score of 6.7 and a current ratio of 8.5 suggest underlying balance-sheet health that could support a quality recovery.
The engine's momentum gate failed outright, with price in capitulation territory (RSI near 4, below the 200-day moving average) and the setup flagged as an oversold bounce rather than a durable trend.
→StableEngine gate (failed)
- Expectation
- Momentum score should recover above the engine's threshold, with RSI moving out of oversold territory over the next 12 months.
CounterElevated bollinger and support/resistance technical scores (9.0 and 9.9) suggest price is near a support zone that could produce a bounce even without a full momentum recovery.
Insiders have been net buyers, with 4 buy transactions and zero sells over the past 90 days (net +58,500 shares) and institutions accumulating, producing a bullish insider signal.
→StableInsider transaction read
- Expectation
- The insider signal should remain bullish, with continued net-positive share accumulation over the next 12 months.
CounterThe signal relies on a share-count fallback with no dollar value disclosed, so the buying's materiality relative to market cap is unclear.
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
2.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.0 |
| MACD | 2.2 |
| OBV | 1.0 |
| MA position | 2.5 |
| Volume | 4.9 |
- ▸Capitulation risk (RSI 26, below 200MA)
- ▸Volume distribution (falling OBV)
Sentiment
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 10.0 |
| erm sentiment | 5.0 |
- ▸Analyst upside: 106%
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
4.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.8 |
| quality rank | 1.0 |
| growth rank | 7.9 |
Technical
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 7.3 |
| support resistance | 8.9 |
| 52w position | 0.1 |
| gap | 5.0 |
Risk (lower is worse)
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.4 |
| days to cover | 8.6 |
| volatility | 0.0 |
| put call | 0.0 |
| implied vol | 0.4 |
| max pain risk | 7.0 |
| debt equity | 7.9 |
- ▸Elevated put/call: 22.33
- ▸High IV: 78%
Catalyst
2.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (7)
- ASYMMETRY:5.9>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:58d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- MOMENTUM:2.7<4.5
Warning (0)
none
Reward-to-Risk
5.87
Upside
+79.3%
Downside
13.5%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Drawdown -50% (>40% off 52w high)
Investment implication
The SELL_IF_HOLDING verdict reflects the MOMENTUM gate's 2.7<4.5 outcome against Growth at 10.0 and asymmetric R:R of 5.87.
The strongest dimensions are Growth at 10.0, Value at 7.7, and Insider at 7.3; the weakest are Catalyst at 2.5, Momentum at 2.7, and Quality at 3.7. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of 5.87 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Valuation Discount To Target
Trip ifValue dimension score falls below 5.0 from the current 7.5.
- P2Strong Revenue Growth Pace
Trip ifRevenue growth YoY drops below 15% for 2 consecutive quarters, reversing the current 47% YoY pace.
- P3Quality Below Engine Floor
Trip ifQuality score rises above 4.0 from the current 3.7, clearing the engine's floor.
- P4Momentum Gate Failure
Trip ifMomentum score exceeds 4.5, clearing the engine's gate threshold, from the current 2.5.
- P5Insider Buying Signal
Trip ifInsider selling exceeds 58,500 shares within a 90-day window, reversing the current net buying trend.