Value
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.1 |
| P/S | 9.4 |
| EV/EBITDA | 5.9 |
| Fwd P/E | 8.9 |
| PEG | 10.0 |
| Analyst target | 5.0 |
- ▸Forward P/E: 12.2x
- ▸PEG: 0.17
- ▸Attractively valued
AXTA · Why this verdict
Why Axalta Coating Systems (AXTA) is rated HOLD
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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VerdictHOLD
Overall score6.1/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
The shares carry a low forward multiple and strong cash conversion, but have run to within pennies of resistance with a risk/reward ratio of 0.09-to-1 — the earnings beat record is real, yet the geometry of the trade no longer supports new entry at current levels.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
At a forward P/E of 12.0x and a PEG ratio of 0.19, the shares are priced at a meaningful discount to their earnings growth rate, offering a valuation cushion that limits downside if operating results hold. Valuation breakdown | Forward P/E expands toward 16x over the next 12 months as the market assigns a higher multiple to the sustained earnings cadence. | →Stable |
| CounterDeclining revenue at approximately -1% may justify the compressed multiple; if top-line erosion accelerates, the low PEG reflects shrinking earnings power rather than mispricing and the valuation floor falls with it. | ||
Three beats in the last four quarters, including an 11.7% positive surprise in the most recent period, reflect a pattern of under-promising and over-delivering that has consistently rewarded holders through each reporting cycle. Earnings | EPS surprise remains positive for the next two quarterly reports, sustaining the beat cadence. | ↑Improving |
| CounterRevenue is declining at approximately -1%, which narrows the operating levers available to manufacture future upside; a tighter cost environment could end the beat streak without the top-line recovery to replace it. | ||
Free cash flow running at 144% of net income means the business generates substantially more cash than reported earnings reflect, providing a financial resilience buffer that the headline profit figures alone do not capture. Quality breakdown | Free cash flow conversion stays above 100% of net income over the next four quarters, preserving balance-sheet flexibility. | →Stable |
| CounterA debt-to-equity ratio of 1.3 means a significant portion of generated cash is already committed to debt service; the high conversion rate may not translate into fully discretionary capital for shareholders or accelerated deleveraging. | ||
With only 0.6% headroom to the $33.97 resistance target and a risk/reward ratio of 0.09-to-1, the setup offers negligible reward against a 7% potential drawdown — an RSI at 77 compounds the near-term entry risk. Bear case | Price either breaks cleanly above $34.50 on volume, establishing a new higher base, or consolidates at lower levels to restore a more favorable entry geometry. | →Stable |
| CounterVolume accumulation via a rising on-balance volume trend and an above-200-day moving-average position suggest the underlying trend remains intact; an overbought RSI can persist for weeks in a strong tape before reversing. | ||
At a forward P/E of 12.0x and a PEG ratio of 0.19, the shares are priced at a meaningful discount to their earnings growth rate, offering a valuation cushion that limits downside if operating results hold.
→StableValuation breakdown
- Expectation
- Forward P/E expands toward 16x over the next 12 months as the market assigns a higher multiple to the sustained earnings cadence.
CounterDeclining revenue at approximately -1% may justify the compressed multiple; if top-line erosion accelerates, the low PEG reflects shrinking earnings power rather than mispricing and the valuation floor falls with it.
Three beats in the last four quarters, including an 11.7% positive surprise in the most recent period, reflect a pattern of under-promising and over-delivering that has consistently rewarded holders through each reporting cycle.
↑ImprovingEarnings
- Expectation
- EPS surprise remains positive for the next two quarterly reports, sustaining the beat cadence.
CounterRevenue is declining at approximately -1%, which narrows the operating levers available to manufacture future upside; a tighter cost environment could end the beat streak without the top-line recovery to replace it.
Free cash flow running at 144% of net income means the business generates substantially more cash than reported earnings reflect, providing a financial resilience buffer that the headline profit figures alone do not capture.
→StableQuality breakdown
- Expectation
- Free cash flow conversion stays above 100% of net income over the next four quarters, preserving balance-sheet flexibility.
CounterA debt-to-equity ratio of 1.3 means a significant portion of generated cash is already committed to debt service; the high conversion rate may not translate into fully discretionary capital for shareholders or accelerated deleveraging.
With only 0.6% headroom to the $33.97 resistance target and a risk/reward ratio of 0.09-to-1, the setup offers negligible reward against a 7% potential drawdown — an RSI at 77 compounds the near-term entry risk.
→StableBear case
- Expectation
- Price either breaks cleanly above $34.50 on volume, establishing a new higher base, or consolidates at lower levels to restore a more favorable entry geometry.
CounterVolume accumulation via a rising on-balance volume trend and an above-200-day moving-average position suggest the underlying trend remains intact; an overbought RSI can persist for weeks in a strong tape before reversing.
Per-dimension breakdown
Quality
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.8 |
| ROA | 4.1 |
| Gross margin | 2.8 |
| Op margin | 6.1 |
| Net margin | 3.4 |
| Current ratio | 5.6 |
| FCF quality | 10.0 |
| Moat | 4.2 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 155% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 8/9
Growth
6.7/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.3 |
| EPS growth | 10.0 |
Momentum
7.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 4.8 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 3.9 |
| Analyst rating | 7.4 |
| Price target | 6.8 |
Insider
5.8/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.5 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
3.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.8 |
| quality rank | 6.8 |
| growth rank | 1.4 |
Technical
3.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.8 |
| support resistance | 1.4 |
| 52w position | 7.9 |
Risk (lower is worse)
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.4 |
| days to cover | 6.2 |
| volatility | 6.2 |
| put call | 3.0 |
| implied vol | 6.0 |
| beta | 6.0 |
| debt equity | 4.6 |
| news risk | 5.5 |
- ▸Elevated put/call: 1.56
Catalyst
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 3.5 |
| earnings history | 5.6 |
| surprise avg | 6.0 |
| news activity | 8.0 |
How the verdict was assembled
Engine trigger
Mixed signals. Hold existing position.
Engine technical detail
verdict_path:
L4:PATH_F_HOLD_DEFAULTPassed (6)
- MOMENTUM:7.8>=5.5
- INSIDER:OK
- 8K:CLEAN
- EARNINGS_PROXIMITY:NO_DATE
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.1<1.5@spot
Warning (0)
none
Reward-to-Risk
0.13
Upside
+1.3%
Downside
9.9%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 67, MACD bullish
EdgeSector Rotation — Basic Materials sector out of favor, value=7.6
SuitabilityModerate — Balanced profile
Investment implication
The default F-path HOLD fired without any positive-conviction gate triggering — no momentum acceleration, no quality+value crossover, no setup recognition. Highest-clear gate: MOMENTUM:7.8>=5.5. Top dim: Momentum at 7.8; weakest: Technical at 3.7. The engine's read is one of pattern absence — no directional conviction in either direction at current asymmetry.
The strongest dimensions are Momentum at 7.8, Value at 7.6, and Growth at 6.7; the weakest are Technical at 3.7, Peer rank at 3.9, and Quality at 5.5. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of 0.13 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Earnings Beat Discipline
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P2Valuation Discount On Peg
Trip ifForward P/E expands above 20x, indicating re-rating has already occurred and the valuation discount no longer exists.
- P3Superior Free Cash Conversion
Trip ifFree cash flow conversion falls below 80% of net income for 2 consecutive quarters.
- P4Price Exhausted At Resistance
Trip ifPrice breaks above $36.00 on above-average volume for 5 or more consecutive trading sessions, confirming the resistance has been overcome.