Value
7.8/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.7 |
| P/S | 9.9 |
| EV/EBITDA | 6.4 |
| Fwd P/E | 9.3 |
| PEG | 7.9 |
| Analyst target | 9.0 |
- ▸Forward P/E: 10.2x
- ▸PEG: 0.85
- ▸Attractively valued
ASTE · Why this verdict
Why Astec Industries (ASTE) 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 score5.4/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
The stock offers 17% upside to the analyst target and passing technical momentum, but the business falls below the minimum quality threshold with only 11% of net income converting to free cash flow, and the most recent earnings quarter missed by -35% after three prior consecutive beats — the quality deficit is the dominant concern.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The overall quality score of 3.3 sits below the minimum acceptable threshold of 4.0, with only 11% of net income converting into free cash flow — identified as an earnings quality red flag — and peer quality ranking in the bottom decile of its peer group. Quality breakdown | Quality score rises above 4.0 and free cash flow as a percentage of net income rises above 30% for 2 consecutive quarters, clearing the minimum threshold. | →Stable |
| CounterA Piotroski F-Score of 7 out of 9 shows the business passes most traditional financial health checks; the low cash conversion may reflect timing differences rather than structural impairment of the underlying operations. | ||
Approximately 17% headroom remains to the analyst price target with a risk/reward of roughly 2.5-to-1 in the bulls' favor, and the momentum score passes at 6.7 — volume is accumulating and the stock is above the 200-day moving average. Price targets | Price rises above $61 (the analyst target) within 12 months, closing the upside gap. | →Stable |
| CounterFavorable headline risk/reward is undermined by quality below the minimum floor and an elevated put/call ratio of 2.00 signaling heavy bearish options positioning, which may suppress the recovery. | ||
Three consecutive quarters of strong positive surprises — including beats of +59%, +24%, and +28% — were followed by a miss of -35% in the most recent quarter, breaking the established pattern and introducing uncertainty about whether the prior delivery was repeatable. Earnings | EPS surprise exceeds 10% in each of the next 2 consecutive quarters, restoring the beat pattern. | →Stable |
| CounterThree consecutive large beats before the most recent miss suggest management had developed genuine guidance discipline; a single quarter miss may be noise rather than a structural inflection, especially with an average surprise of +19% across the full period. | ||
Implied volatility at 123% is among the highest observable levels and the put/call ratio stands at 2.00, signaling that the options market is pricing in very high near-term uncertainty and that bearish hedges significantly outnumber bullish ones. Risk breakdown | Implied volatility falls below 60% and the put/call ratio drops below 1.0 for 30 consecutive days, indicating uncertainty has been resolved. | →Stable |
| CounterExtreme implied volatility can reflect event-driven uncertainty around a specific catalyst; if the underlying concern resolves, the volatility collapse itself could contribute to upside price movement. | ||
The overall quality score of 3.3 sits below the minimum acceptable threshold of 4.0, with only 11% of net income converting into free cash flow — identified as an earnings quality red flag — and peer quality ranking in the bottom decile of its peer group.
→StableQuality breakdown
- Expectation
- Quality score rises above 4.0 and free cash flow as a percentage of net income rises above 30% for 2 consecutive quarters, clearing the minimum threshold.
CounterA Piotroski F-Score of 7 out of 9 shows the business passes most traditional financial health checks; the low cash conversion may reflect timing differences rather than structural impairment of the underlying operations.
Approximately 17% headroom remains to the analyst price target with a risk/reward of roughly 2.5-to-1 in the bulls' favor, and the momentum score passes at 6.7 — volume is accumulating and the stock is above the 200-day moving average.
→StablePrice targets
- Expectation
- Price rises above $61 (the analyst target) within 12 months, closing the upside gap.
CounterFavorable headline risk/reward is undermined by quality below the minimum floor and an elevated put/call ratio of 2.00 signaling heavy bearish options positioning, which may suppress the recovery.
Three consecutive quarters of strong positive surprises — including beats of +59%, +24%, and +28% — were followed by a miss of -35% in the most recent quarter, breaking the established pattern and introducing uncertainty about whether the prior delivery was repeatable.
→StableEarnings
- Expectation
- EPS surprise exceeds 10% in each of the next 2 consecutive quarters, restoring the beat pattern.
CounterThree consecutive large beats before the most recent miss suggest management had developed genuine guidance discipline; a single quarter miss may be noise rather than a structural inflection, especially with an average surprise of +19% across the full period.
Implied volatility at 123% is among the highest observable levels and the put/call ratio stands at 2.00, signaling that the options market is pricing in very high near-term uncertainty and that bearish hedges significantly outnumber bullish ones.
→StableRisk breakdown
- Expectation
- Implied volatility falls below 60% and the put/call ratio drops below 1.0 for 30 consecutive days, indicating uncertainty has been resolved.
CounterExtreme implied volatility can reflect event-driven uncertainty around a specific catalyst; if the underlying concern resolves, the volatility collapse itself could contribute to upside price movement.
Per-dimension breakdown
Quality
3.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.0 |
| ROA | 2.8 |
| Gross margin | 1.2 |
| Op margin | 2.5 |
| Net margin | 0.6 |
| Current ratio | 8.6 |
| FCF quality | 0.0 |
| Moat | 5.6 |
| Piotroski F | 7.8 |
- ▸Earnings quality RED FLAG: -6% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
4.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 8.4 |
| EPS growth | 0.0 |
- ▸Strong growth: 24% YoY
Momentum
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 9.3 |
| OBV | 10.0 |
| MA position | 4.0 |
| Volume | 2.6 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -1.6%/30d — confirmed downtrend
Sentiment
7.9/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.0 |
| Analyst rating | 7.1 |
| Price target | 9.8 |
- ▸LLM news sentiment: +0.40 (n=1)
- ▸Light analyst coverage (4.0) — signal dampened
- ▸Analyst upside: 69%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
4.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.9 |
| quality rank | 2.8 |
| growth rank | 6.7 |
Technical
3.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.9 |
| support resistance | 5.2 |
| 52w position | 2.2 |
Risk (lower is worse)
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.4 |
| days to cover | 8.2 |
| volatility | 5.4 |
| implied vol | 0.7 |
| beta | 5.7 |
| debt equity | 7.6 |
- ▸High IV: 76%
Catalyst
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 3.3 |
| dividend safety | 5.3 |
| news activity | 5.0 |
- ▸Earnings concerns: 2B/2M
- ▸Earnings in 5 days
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (6)
- MOMENTUM:6.1>=5.5
- ASYMMETRY:7.1>=1.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- EARNINGS_PROXIMITY:5d<=7d
Warning (2)
- DEATH_CROSS:momentum=6.1>=5.0 recovering
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
7.13
Upside
+43.2%
Downside
6.1%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 57
EdgeInst Constrain — Small cap ($0.9B) below institutional reach
SuitabilityAggressive — Beta 1.33>1.3, MCap $0.9B<$5B
Investment implication
The SELL_IF_HOLDING verdict reflects the EARNINGS_PROXIMITY gate's 5d<=7d outcome against Sentiment at 7.9 and asymmetric R:R of 7.13.
The strongest dimensions are Sentiment at 7.9, Value at 7.8, and Momentum at 6.1; the weakest are Quality at 3.3, Technical at 3.8, and Growth at 4.2. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of 7.13 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Quality Below Floor Poor Cash Conversion
Trip ifQuality score rises above 4.0 and free cash flow relative to net income rises above 30% for 2 consecutive quarters.
- P2Analyst Upside With Momentum
Trip ifPrice rises above $61 (the analyst price target), confirming the upside has been realized.
- P3Beat Streak Broken Most Recent Miss
Trip ifEPS surprise exceeds 10% for each of the next 2 consecutive quarters.
- P4Extreme Implied Volatility Bearish Positioning
Trip ifPut/call ratio falls below 1.0 and implied volatility drops below 60% for 30 consecutive days.