Value
5.3/10data confidence 83%| Component | Sub-score |
|---|---|
| P/S | 7.6 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 6.1 |
| PEG | 10.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 21.2x
- ▸PEG: 0.19
ARX · Why this verdict
Why Accelerant (ARX) 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 score6.1/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Accelerant is a fast-growing insurance broker with a perfect earnings-beat streak, but it burns cash heavily, its price is above the analyst target and insiders are selling. Strong growth is offset by weak cash generation and no analyst-defined upside.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Growth is strong at 57% year over year, with quarterly revenue of $356.9M versus $219.1M a year earlier. Growth breakdown | Revenue growth should stay above 35% year over year across the next four quarters. | →Stable |
| CounterGrowth confidence is only 0.33, and revenue sources diverge by up to 15.7% between filings and market data, so the growth rate is uncertain. | ||
The company beat EPS estimates in all four of the last quarters, with an average surprise of 47.77%. Avg surprise pct | EPS should beat estimates in each of the next four quarters. | ↓Deteriorating |
| CounterEstimates are down 27.5% over 30 days, so the beats may reflect lowered expectations rather than stronger results. | ||
The business is burning cash heavily, with free cash flow at -138% of revenue and a Rule of 40 score of -81. Quality breakdown | Free cash flow margin should improve toward breakeven as the business scales over 12 months. | →Stable |
| CounterInsurance-broker cash flow can swing with premium-funds timing, so the reported burn may overstate underlying economics; the Piotroski score is 9 out of 9. | ||
The $19.77 price is 12.9% above the $17.21 analyst target, with 15.0% downside to the stop, so there is no analyst-defined upside. Upside pct | Analysts should raise targets above the current price as earnings beat, restoring upside over 12 months. | →Stable |
| CounterEstimates are falling (-27.5%) and the put/call ratio is elevated at 1.93, which points to caution rather than target upgrades. | ||
Insiders sold $9,005,389 (0.210% of market cap) across 11 transactions in 90 days, with no purchases. Net value 90d | Insider selling should taper and net purchases should appear if insiders see value at current prices. | →Stable |
| CounterAt 0.210% of market cap the selling is minor, and institutions are accumulating at the same time. | ||
Growth is strong at 57% year over year, with quarterly revenue of $356.9M versus $219.1M a year earlier.
→StableGrowth breakdown
- Expectation
- Revenue growth should stay above 35% year over year across the next four quarters.
CounterGrowth confidence is only 0.33, and revenue sources diverge by up to 15.7% between filings and market data, so the growth rate is uncertain.
The company beat EPS estimates in all four of the last quarters, with an average surprise of 47.77%.
↓DeterioratingAvg surprise pct
- Expectation
- EPS should beat estimates in each of the next four quarters.
CounterEstimates are down 27.5% over 30 days, so the beats may reflect lowered expectations rather than stronger results.
The business is burning cash heavily, with free cash flow at -138% of revenue and a Rule of 40 score of -81.
→StableQuality breakdown
- Expectation
- Free cash flow margin should improve toward breakeven as the business scales over 12 months.
CounterInsurance-broker cash flow can swing with premium-funds timing, so the reported burn may overstate underlying economics; the Piotroski score is 9 out of 9.
The $19.77 price is 12.9% above the $17.21 analyst target, with 15.0% downside to the stop, so there is no analyst-defined upside.
→StableUpside pct
- Expectation
- Analysts should raise targets above the current price as earnings beat, restoring upside over 12 months.
CounterEstimates are falling (-27.5%) and the put/call ratio is elevated at 1.93, which points to caution rather than target upgrades.
Insiders sold $9,005,389 (0.210% of market cap) across 11 transactions in 90 days, with no purchases.
→StableNet value 90d
- Expectation
- Insider selling should taper and net purchases should appear if insiders see value at current prices.
CounterAt 0.210% of market cap the selling is minor, and institutions are accumulating at the same time.
Per-dimension breakdown
Quality
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROA | 0.4 |
| Gross margin | 9.0 |
| Op margin | 6.2 |
| Current ratio | 5.0 |
| FCF quality | 0.0 |
| Moat | 7.2 |
| Rule of 40 | 3.0 |
| Piotroski F | 10.0 |
- ▸Cash-burning: FCF -138% of revenue
- ▸Rule of 40: -81 (fail)
- ▸Strong Piotroski F-Score: 9/9
Growth
10.0/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
- ▸Strong growth: 57% YoY
Momentum
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 3.2 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.8 |
| Analyst rating | 5.0 |
| Price target | 5.3 |
Insider
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Modest insider selling — $4,217,978 (0.098% of mkt cap)
- ▸Institutions accumulating
Peer rank
4.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.3 |
| quality rank | 0.0 |
| growth rank | 8.7 |
- ▸Industry growth leader
Technical
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.2 |
| support resistance | 2.3 |
| 52w position | 9.9 |
Risk (lower is worse)
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.5 |
| days to cover | 9.3 |
| volatility | 10.0 |
| put call | 1.8 |
| implied vol | 0.3 |
| debt equity | 9.4 |
- ▸Elevated put/call: 1.73
- ▸High IV: 78%
- ▸Concentration risks: 2 MED (10-K Item 1A)
Catalyst
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 1.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| news activity | 5.0 |
- ▸Estimates down -27.5% (30d)
- ▸Strong earnings: 3B/0M
- ▸Earnings in 11 days
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more. | News modifier -1 (HOLD_IF_HOLDING → SELL_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_F_HOLD|L3:NEWS_MOD=-1Passed (5)
- MOMENTUM:5.5>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.9=NEGATIVE
Warning (2)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
- EARNINGS_PROXIMITY:11d<=14d (soft)
Reward-to-Risk
-0.88
Upside
-13.2%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeCatalyst-Driven — Earnings in 11d with 3/4 beat streak
SuitabilityAggressive — MCap $4.3B<$5B
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:5.5>=5.5. Top dim: Growth at 10.0; weakest: Technical at 4.5. No conviction either direction.
The strongest dimensions are Growth at 10.0, Risk (lower is worse) at 6.4, and Catalyst at 6.2; the weakest are Technical at 4.5, Peer rank at 4.7, and Quality at 5.1. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of -0.88 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 ifRevenue growth falls below 30% YoY for 2 consecutive quarters.
- P2Perfect Earnings Beat Streak
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P3Heavy Cash Burn
Trip ifFree cash flow margin rises above 0% from current -138% of revenue.
- P4Price Above Analyst Target
Trip ifAnalyst target rises above $22 from current $17.21.
- P5Notable Insider Selling
Trip ifInsider selling over 90 days falls below 0.05% of market cap from current 0.21%.