Value
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 7.3 |
| P/S | 9.0 |
| EV/EBITDA | 4.1 |
| Fwd P/E | 8.4 |
| PEG | 4.8 |
| Analyst target | 7.5 |
- ▸Forward P/E: 13.8x
- ▸PEG: 1.66
ATMU · Why this verdict
Why Atmus Filtration Technologies I (ATMU) 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
ConfidenceHIGH
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Atmus Filtration has a perfect 4-of-4 earnings beat streak, a 56% ROE and 22% upside to the analyst target, but a confirmed downtrend below the 200-day average and 2.3x debt-to-equity limit conviction.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Debt-to-equity of 2.3 costs the score 1.5 points and constrains balance-sheet flexibility. Bear case | Debt-to-equity falls below 2.0 as earnings grow and debt is paid down. | →Stable |
| CounterLeverage supports the very high ROE, so deleveraging could lower returns, while rising rates or an industrial downturn would make the debt load more painful. | ||
Atmus has beaten earnings estimates in all 4 of the last 4 quarters, with the next report 13 days away. Bull case | The beat streak extends at the next earnings report and keeps at least 3 of 4 beats over 12 months. | →Stable |
| CounterAfter a perfect streak, expectations rise, and a single miss could trigger a sharp de-rating of a stock already in a downtrend. | ||
Returns on equity are excellent at 56% with a Piotroski F-Score of 7/9, but free cash flow is only 48% of net income, a flagged earnings-quality weakness. Quality breakdown | Free cash flow conversion improves toward 80% of net income while ROE stays high. | →Stable |
| CounterHigh ROE is inflated by leverage and a small equity base, and weak cash conversion suggests reported earnings overstate distributable cash. | ||
The stock is below its 200-day average with the average sloping down 2.1% over 30 days, yet rising on-balance volume and an improving MACD point to a possible recovery. Momentum breakdown | Price reclaims the 200-day average and the 30-day slope turns flat or positive within 12 months. | →Stable |
| CounterA confirmed downtrend with a death cross usually keeps declining, and the volume accumulation may be a short-lived bounce. | ||
The price of $44.61 sits 22.1% below the analyst target of $54.46, with reward-to-risk of 2.55 against 8.7% downside. Targets | Price closes part of the 22.1% gap to target as earnings beats continue. | →Stable |
| CounterAnalyst targets lag a falling price, and the downtrend could reach the $41.79 stop first. | ||
Debt-to-equity of 2.3 costs the score 1.5 points and constrains balance-sheet flexibility.
→StableBear case
- Expectation
- Debt-to-equity falls below 2.0 as earnings grow and debt is paid down.
CounterLeverage supports the very high ROE, so deleveraging could lower returns, while rising rates or an industrial downturn would make the debt load more painful.
Atmus has beaten earnings estimates in all 4 of the last 4 quarters, with the next report 13 days away.
→StableBull case
- Expectation
- The beat streak extends at the next earnings report and keeps at least 3 of 4 beats over 12 months.
CounterAfter a perfect streak, expectations rise, and a single miss could trigger a sharp de-rating of a stock already in a downtrend.
Returns on equity are excellent at 56% with a Piotroski F-Score of 7/9, but free cash flow is only 48% of net income, a flagged earnings-quality weakness.
→StableQuality breakdown
- Expectation
- Free cash flow conversion improves toward 80% of net income while ROE stays high.
CounterHigh ROE is inflated by leverage and a small equity base, and weak cash conversion suggests reported earnings overstate distributable cash.
The stock is below its 200-day average with the average sloping down 2.1% over 30 days, yet rising on-balance volume and an improving MACD point to a possible recovery.
→StableMomentum breakdown
- Expectation
- Price reclaims the 200-day average and the 30-day slope turns flat or positive within 12 months.
CounterA confirmed downtrend with a death cross usually keeps declining, and the volume accumulation may be a short-lived bounce.
The price of $44.61 sits 22.1% below the analyst target of $54.46, with reward-to-risk of 2.55 against 8.7% downside.
→StableTargets
- Expectation
- Price closes part of the 22.1% gap to target as earnings beats continue.
CounterAnalyst targets lag a falling price, and the downtrend could reach the $41.79 stop first.
Per-dimension breakdown
Quality
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 7.9 |
| Gross margin | 1.8 |
| Op margin | 6.8 |
| Net margin | 5.7 |
| Current ratio | 8.9 |
| FCF quality | 3.9 |
| Moat | 6.0 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 56%
- ▸Earnings quality RED FLAG: 48% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
5.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 6.6 |
| EPS growth | 3.7 |
Momentum
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 2.7 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 4.0 |
| Volume | 2.1 |
- ▸Overbought bear rally (RSI 74)
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -2.3%/30d — confirmed downtrend
Sentiment
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 9.1 |
| erm sentiment | 5.0 |
- ▸Analyst upside: 39%
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Negligible insider selling — $97,405 (0.003% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.4 |
| quality rank | 8.8 |
| growth rank | 8.4 |
- ▸Superior ROE vs peers
- ▸Industry growth leader
Technical
3.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.3 |
| support resistance | 3.2 |
| 52w position | 3.6 |
| gap | 5.0 |
Risk (lower is worse)
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.7 |
| days to cover | 6.4 |
| volatility | 5.8 |
| put call | 10.0 |
| implied vol | 4.8 |
| max pain risk | 3.0 |
| beta | 6.2 |
| debt equity | 2.7 |
- ▸Above max pain $38
Catalyst
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 7.5 |
| dividend safety | 7.5 |
- ▸Perfect beat streak: 4Q
- ▸Earnings in 7 days
- ▸Dividend aristocrat: 0.5% yield
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:5.8>=5.5
- ASYMMETRY:2.2>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- EARNINGS_PROXIMITY:7d<=7d
Warning (1)
- DEATH_CROSS:momentum=5.8>=5.0 recovering
Reward-to-Risk
2.16
Upside
+20.8%
Downside
9.6%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 74
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $3.7B<$5B
Investment implication
The F-path SELL output reflects an overall score of 3.1 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Insider at 7.3) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( EARNINGS_PROXIMITY:7d<=7d) reinforce the read. Current asymmetry R:R is 2.16 — supplementary context, not the trigger for this path.
The strongest dimensions are Insider at 7.3, Catalyst at 7.0, and Value at 6.9; the weakest are Technical at 3.8, Growth at 5.2, and Peer rank at 5.7. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 2.16 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Earnings Beat Streak
Trip ifEPS beats total less than 2 of the next 4 quarters (currently 4 of 4).
- P2High Roe Weak Cash Conversion
Trip ifFree cash flow falls below 30% of net income from the current 48%.
- P3Leverage Drags Score
Trip ifDebt-to-equity exceeds 3.0 from the current 2.3.
- P4Downtrend Recovery Setup
Trip ifThe 200-day average slope falls below -5% over 30 days from the current -2.1%.
- P5Analyst Target Upside
Trip ifPrice falls below the $41.79 stop level from the current $44.61.