Value
7.6/10data confidence 83%| Component | Sub-score |
|---|---|
| P/S | 9.7 |
| EV/EBITDA | 1.8 |
| Fwd P/E | 7.3 |
| PEG | 10.0 |
| Analyst target | 9.0 |
- ▸Forward P/E: 17.0x
- ▸PEG: 0.06
- ▸Attractively valued
ADTN · Why this verdict
Why ADTRAN Holdings (ADTN) 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 score5.7/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The quality score of 3.2 remains below the 4.0 floor cited as grounds to exit, with return on equity, return on assets, and net margin components all reading zero. Quality breakdown | At least some core profitability components should move off zero and the quality score should climb toward the 4.0 floor over the next 12 months for the exit signal to reverse. | →Stable |
| CounterThe Piotroski F-score component reads a strong 8.9, and the current ratio component reads a solid 6.3, both suggesting balance-sheet and operational discipline stronger than the headline quality score implies. | ||
The reward-to-risk ratio clears its gate comfortably at 2.33, with 33.4% upside against just 5.2% downside to stop, even though momentum only marginally clears its own gate at 4.8 against a preferred 5.5 level. Gates warning | Momentum should strengthen back above the preferred 5.5 level over the next 12 months for the favorable reward-to-risk setup to be confirmed by the trend. | →Stable |
| CounterThe RSI notes describe the stock as oversold within an uptrend rather than in a confirmed downtrend, meaning the soft momentum reading may reflect a pullback rather than a trend reversal. | ||
The two most recent quarters each beat estimates by 50.01% and 95.12% respectively, following an in-line quarter before that, with earnings history carrying a maxed catalyst component. Earnings | The beat streak should continue into the next reported quarter, due in 31 days, for the improving trend to hold. | →Stable |
| CounterThe average surprise across the tracked window is a much more modest 6.4%, pulled down by a prior quarter with no reported actual result, so the two most recent outsized beats may not represent a stable new baseline. | ||
Insiders sold $2,357,211 over the past 90 days across four separate sell transactions with zero offsetting buys, a level the engine flags as moderate relative to market cap and enough to trigger a bearish insider signal. Insider | Insider transactions should shift back toward net buying, or at least stop showing net selling, over the next 12 months for the bearish insider signal to ease. | →Stable |
| CounterNone of the selling came from C-level executives, according to the insider data, suggesting the selling is not concentrated among the most senior decision-makers. | ||
Risk notes describe short interest of 17% as justified and flag an elevated put/call ratio of 1.39 alongside implied volatility of 94%, with a beta of 1.45 already flagging the stock as more volatile than the market. Risk breakdown | Short interest should decline and the put/call ratio should normalize back toward parity over the next 12 months if the bearish positioning is unwinding. | →Stable |
| CounterThe risk-component score for short interest itself reads a low 1.8, and days-to-cover exceeds 6, suggesting the position could unwind quickly if sentiment shifts. | ||
The quality score of 3.2 remains below the 4.0 floor cited as grounds to exit, with return on equity, return on assets, and net margin components all reading zero.
→StableQuality breakdown
- Expectation
- At least some core profitability components should move off zero and the quality score should climb toward the 4.0 floor over the next 12 months for the exit signal to reverse.
CounterThe Piotroski F-score component reads a strong 8.9, and the current ratio component reads a solid 6.3, both suggesting balance-sheet and operational discipline stronger than the headline quality score implies.
The reward-to-risk ratio clears its gate comfortably at 2.33, with 33.4% upside against just 5.2% downside to stop, even though momentum only marginally clears its own gate at 4.8 against a preferred 5.5 level.
→StableGates warning
- Expectation
- Momentum should strengthen back above the preferred 5.5 level over the next 12 months for the favorable reward-to-risk setup to be confirmed by the trend.
CounterThe RSI notes describe the stock as oversold within an uptrend rather than in a confirmed downtrend, meaning the soft momentum reading may reflect a pullback rather than a trend reversal.
The two most recent quarters each beat estimates by 50.01% and 95.12% respectively, following an in-line quarter before that, with earnings history carrying a maxed catalyst component.
→StableEarnings
- Expectation
- The beat streak should continue into the next reported quarter, due in 31 days, for the improving trend to hold.
CounterThe average surprise across the tracked window is a much more modest 6.4%, pulled down by a prior quarter with no reported actual result, so the two most recent outsized beats may not represent a stable new baseline.
Insiders sold $2,357,211 over the past 90 days across four separate sell transactions with zero offsetting buys, a level the engine flags as moderate relative to market cap and enough to trigger a bearish insider signal.
→StableInsider
- Expectation
- Insider transactions should shift back toward net buying, or at least stop showing net selling, over the next 12 months for the bearish insider signal to ease.
CounterNone of the selling came from C-level executives, according to the insider data, suggesting the selling is not concentrated among the most senior decision-makers.
Risk notes describe short interest of 17% as justified and flag an elevated put/call ratio of 1.39 alongside implied volatility of 94%, with a beta of 1.45 already flagging the stock as more volatile than the market.
→StableRisk breakdown
- Expectation
- Short interest should decline and the put/call ratio should normalize back toward parity over the next 12 months if the bearish positioning is unwinding.
CounterThe risk-component score for short interest itself reads a low 1.8, and days-to-cover exceeds 6, suggesting the position could unwind quickly if sentiment shifts.
TrendMatrix Research · core thesis
Engine thesis — one sentence
ADTRAN Holdings shows an improving earnings trend and a favorable reward-to-risk setup, but quality sits below the exit threshold, insiders have been notable net sellers, and elevated short interest and put/call positioning keep sentiment cautious.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
3.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.0 |
| Gross margin | 3.7 |
| Op margin | 0.9 |
| Net margin | 0.0 |
| Current ratio | 6.3 |
| Moat | 5.8 |
| Piotroski F | 8.9 |
- ▸Strong Piotroski F-Score: 8/9
Growth
8.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 6.4 |
| EPS growth | 10.0 |
Momentum
3.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 8.3 |
| MACD | 0.6 |
| OBV | 1.0 |
| MA position | 4.0 |
| Volume | 2.5 |
- ▸Uptrend pullback (RSI 32) - buy opportunity
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 9.6 |
| erm sentiment | 5.0 |
- ▸Analyst upside: 52%
Insider
5.0/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 2.0 |
| holder change | 10.0 |
- ▸Notable insider selling — $2,357,211 (0.226% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 9.1 |
| quality rank | 2.4 |
| growth rank | 5.2 |
Technical
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.5 |
| support resistance | 8.5 |
| 52w position | 2.9 |
Risk (lower is worse)
3.8/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 1.8 |
| days to cover | 6.3 |
| volatility | 0.0 |
| put call | 5.6 |
| implied vol | 0.0 |
| max pain risk | 3.0 |
| beta | 5.2 |
| debt equity | 8.1 |
- ▸High short interest justified: 17%
- ▸High IV: 96%
- ▸Above max pain $7
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 5.7 |
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (5)
- ASYMMETRY:2.4>=1.5
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:28d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- MOMENTUM:3.3<4.5
Warning (2)
- INSIDER:0.23%=MODERATE
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
2.35
Upside
+31.8%
Downside
13.6%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeInst Constrain — Small cap ($1.0B) below institutional reach
SuitabilityAggressive — Beta 1.45>1.3, MCap $1.0B<$5B
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Growth at 8.2 could not lift the engine output above the verdict floor. Failed gate signal: MOMENTUM:3.3<4.5.
The strongest dimensions are Growth at 8.2, Value at 7.6, and Technical at 6.6; the weakest are Quality at 3.2, Momentum at 3.3, and Risk (lower is worse) at 3.8. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of 2.35 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Improving Earnings Momentum
Trip ifEarnings surprise falls below 0% (a miss) in the next reported quarter.
- P2Quality Below Floor Exit Signal
Trip ifQuality score rises above 4.0 from the current 3.2.
- P3Favorable Asymmetry With Soft Momentum
Trip ifReward-to-risk ratio falls below 1.5 from the current 2.33.
- P4Notable Insider Selling
Trip ifNet insider selling falls below $500,000, or turns net-buy, over the next 2 quarters.
- P5Elevated Short Interest And Put Call
Trip ifShort interest falls below 8% of float from the current 17%.