Value
9.5/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 9.4 |
| P/S | 8.8 |
| EV/EBITDA | 8.3 |
| Fwd P/E | 9.8 |
| PEG | 10.0 |
- ▸Forward P/E: 6.2x
- ▸PEG: 0.01
- ▸Attractively valued
ASC · Why this verdict
Why Ardmore Shipping (ASC) is rated BUY WAIT
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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VerdictBUY WAIT
Overall score7.5/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Ardmore Shipping is a cheaply valued marine shipper with a perfect earnings-beat streak and rapid revenue growth, but its price is above the analyst target and reported earnings are not converting to cash. The fundamentals are strong, but the entry is stretched.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Earnings quality is flagged as a red flag, with free cash flow at -12% of net income, despite 30% margins and a Piotroski F-Score of 9 out of 9. Quality breakdown | Free cash flow to net income should recover above 50% as vessel spending normalizes over 12 months. | →Stable |
| CounterNegative free cash flow in shipping often reflects fleet investment or timing of dry-dock spending, which can pay back later. | ||
The company beat EPS estimates in all four of the last quarters, with an average surprise of 8.43%. Avg surprise pct | EPS should beat estimates in each of the next four quarters, with the next report due in 10 days. | ↓Deteriorating |
| CounterThe beats are modest (3.7% to 14.8%) and shipping earnings swing with freight rates, so a rate drop can end the streak quickly. | ||
The stock is attractively valued, with a forward P/E of 7.1x and a PEG of 0.01, and a value score of 9.5 out of 10. Valuation breakdown | Forward P/E should stay under 10x as earnings hold, so the discount reflects the business rather than falling profits. | →Stable |
| CounterCyclical shipping earnings peak when rates peak, so a low multiple on peak earnings can be a trap. | ||
Growth is strong at 61% year over year, with quarterly revenue of $116.2M versus $72.0M a year earlier. Growth breakdown | Revenue growth should stay above 25% year over year across the next four quarters. | →Stable |
| CounterRevenue was $121.3M in mid-2024 before dropping to $72.0M a year later, so the current rise may be a swing in a rate cycle rather than durable growth. | ||
The $20.03 price is 4.5% above the $19.13 analyst target, with 11.0% 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 |
| CounterThe stock is near its 52-week high with strong momentum, and a perfect beat streak can keep pushing targets higher. | ||
Earnings quality is flagged as a red flag, with free cash flow at -12% of net income, despite 30% margins and a Piotroski F-Score of 9 out of 9.
→StableQuality breakdown
- Expectation
- Free cash flow to net income should recover above 50% as vessel spending normalizes over 12 months.
CounterNegative free cash flow in shipping often reflects fleet investment or timing of dry-dock spending, which can pay back later.
The company beat EPS estimates in all four of the last quarters, with an average surprise of 8.43%.
↓DeterioratingAvg surprise pct
- Expectation
- EPS should beat estimates in each of the next four quarters, with the next report due in 10 days.
CounterThe beats are modest (3.7% to 14.8%) and shipping earnings swing with freight rates, so a rate drop can end the streak quickly.
The stock is attractively valued, with a forward P/E of 7.1x and a PEG of 0.01, and a value score of 9.5 out of 10.
→StableValuation breakdown
- Expectation
- Forward P/E should stay under 10x as earnings hold, so the discount reflects the business rather than falling profits.
CounterCyclical shipping earnings peak when rates peak, so a low multiple on peak earnings can be a trap.
Growth is strong at 61% year over year, with quarterly revenue of $116.2M versus $72.0M a year earlier.
→StableGrowth breakdown
- Expectation
- Revenue growth should stay above 25% year over year across the next four quarters.
CounterRevenue was $121.3M in mid-2024 before dropping to $72.0M a year later, so the current rise may be a swing in a rate cycle rather than durable growth.
The $20.03 price is 4.5% above the $19.13 analyst target, with 11.0% 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.
CounterThe stock is near its 52-week high with strong momentum, and a perfect beat streak can keep pushing targets higher.
Per-dimension breakdown
Quality
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.4 |
| ROA | 6.0 |
| Gross margin | 5.1 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 7.6 |
| FCF quality | 0.0 |
| Moat | 7.6 |
| Piotroski F | 10.0 |
- ▸Strong margins: 30%
- ▸Earnings quality RED FLAG: -12% FCF/NI
- ▸Wide economic moat
- ▸Compounder quality: strong returns + growth
Growth
10.0/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
- ▸Strong growth: 61% YoY
Momentum
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 8.8 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 3.1 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.0 |
| Analyst rating | 6.4 |
| Price target | 6.5 |
- ▸Light analyst coverage (2.0) — signal dampened
Insider
6.0/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 6.1 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
7.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.7 |
| quality rank | 6.2 |
| growth rank | 8.0 |
- ▸Conservative debt levels
Technical
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.1 |
| support resistance | 1.6 |
| 52w position | 9.5 |
| gap | 5.0 |
Risk (lower is worse)
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.6 |
| days to cover | 6.7 |
| volatility | 2.2 |
| put call | 9.2 |
| implied vol | 1.2 |
| beta | 10.0 |
| debt equity | 9.8 |
- ▸High IV: 73%
Catalyst
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 6.7 |
| dividend safety | 6.7 |
| news activity | 7.0 |
- ▸Perfect beat streak: 4Q
- ▸Earnings in 4 days
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Fundamentals strong but target reached (-6.0% upside).
Engine technical detail
verdict_path:
L4:PATH_A_DEEP_VALUE|V8:TARGET_REACHED|ENTRY_STICKY:WITHIN_BANDPassed (6)
- MOMENTUM:7.2>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:-0.4=NEGATIVE
- EARNINGS_PROXIMITY:4d<=7d
Warning (0)
none
Reward-to-Risk
-0.44
Upside
-6.0%
Downside
13.4%
Sizing output
STARTER
SetupBreakout — Golden cross, above all MAs, RSI 61, MACD bullish
EdgeInst Constrain — Small cap ($0.8B) below institutional reach
SuitabilityAggressive — MCap $0.8B<$5B
Investment implication
The STRONG_BUY_WAIT verdict reflects the ASYMMETRY gate's -0.4=NEGATIVE outcome against Growth at 10.0 and asymmetric R:R of -0.44.
The strongest dimensions are Growth at 10.0, Value at 9.5, and Peer rank at 7.3; the weakest are Technical at 4.0, Insider at 6.0, and Sentiment at 6.0. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -0.44 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Earnings Beat Streak
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P2Deep Value Pricing
Trip ifForward P/E rises above 12x from current 7.1x.
- P3Rapid Revenue Growth
Trip ifRevenue growth falls below 10% YoY for 2 consecutive quarters.
- P4Weak Cash Conversion
Trip ifFree cash flow to net income rises above 80% from current -12%.
- P5Price Above Analyst Target
Trip ifAnalyst target rises above $23 from current $19.13.