Value
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.5 |
| P/S | 5.1 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 5.7 |
| PEG | 10.0 |
| Analyst target | 9.0 |
- ▸Forward P/E: 22.4x
- ▸PEG: 0.38
BWAY · Why this verdict
Why Brainsway (BWAY) 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 score6.6/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Brainsway is a fast-growing medical device company (35% YoY growth) with a wide moat and 45.6% analyst upside, but negative cash conversion and a weak chart keep it a hold.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company has a wide economic moat, 16% margins and a Piotroski F-Score of 8/9, indicating strong underlying quality. Quality breakdown | Margins hold near 16% and the Piotroski F-Score stays at 7 or higher. | →Stable |
| CounterMedical-device moats built on regulatory clearance can be eroded by competing devices or reimbursement changes. | ||
Revenue is growing about 35% YoY, with quarterly revenue rising from $12.6M to $17.1M over five quarters. Growth breakdown | Revenue growth stays above 20% YoY over the next 12 months. | →Stable |
| CounterGrowth from a small base in a niche device market can decelerate sharply once early adopters are saturated. | ||
Earnings quality is a red flag, with free cash flow at -65% of net income, so reported profit is not turning into cash. Quality breakdown | Free cash flow converts to positive territory relative to net income within 12 months. | →Stable |
| CounterGrowing device makers often build inventory and receivables ahead of sales, so negative cash conversion can be temporary. | ||
At $11.25 the stock sits 45.6% below the $16.38 analyst target, and PEG is 0.37, so valuation looks undemanding for the growth. Upside pct | Price moves toward the $16.38 target as growth continues. | ↓Deteriorating |
| CounterAnalyst coverage is light (3 analysts), so the target carries little weight and may be stale. | ||
Momentum at 2.7/10 reflects a pullback in an uptrend: price is below the 200-day average, but that average is still rising 4.0% over 30 days. Momentum breakdown | Price reclaims the 200-day average and on-balance volume stops falling. | ↓Deteriorating |
| CounterFalling on-balance volume and zero volume score point to distribution that could turn the pullback into a downtrend. | ||
The company has a wide economic moat, 16% margins and a Piotroski F-Score of 8/9, indicating strong underlying quality.
→StableQuality breakdown
- Expectation
- Margins hold near 16% and the Piotroski F-Score stays at 7 or higher.
CounterMedical-device moats built on regulatory clearance can be eroded by competing devices or reimbursement changes.
Revenue is growing about 35% YoY, with quarterly revenue rising from $12.6M to $17.1M over five quarters.
→StableGrowth breakdown
- Expectation
- Revenue growth stays above 20% YoY over the next 12 months.
CounterGrowth from a small base in a niche device market can decelerate sharply once early adopters are saturated.
Earnings quality is a red flag, with free cash flow at -65% of net income, so reported profit is not turning into cash.
→StableQuality breakdown
- Expectation
- Free cash flow converts to positive territory relative to net income within 12 months.
CounterGrowing device makers often build inventory and receivables ahead of sales, so negative cash conversion can be temporary.
At $11.25 the stock sits 45.6% below the $16.38 analyst target, and PEG is 0.37, so valuation looks undemanding for the growth.
↓DeterioratingUpside pct
- Expectation
- Price moves toward the $16.38 target as growth continues.
CounterAnalyst coverage is light (3 analysts), so the target carries little weight and may be stale.
Momentum at 2.7/10 reflects a pullback in an uptrend: price is below the 200-day average, but that average is still rising 4.0% over 30 days.
↓DeterioratingMomentum breakdown
- Expectation
- Price reclaims the 200-day average and on-balance volume stops falling.
CounterFalling on-balance volume and zero volume score point to distribution that could turn the pullback into a downtrend.
Per-dimension breakdown
Quality
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.3 |
| ROA | 2.7 |
| Gross margin | 10.0 |
| Op margin | 5.6 |
| Net margin | 7.8 |
| Current ratio | 9.4 |
| FCF quality | 0.0 |
| Moat | 8.4 |
| Rule of 40 | 5.5 |
| Piotroski F | 8.9 |
- ▸Strong margins: 16%
- ▸Earnings quality RED FLAG: -65% FCF/NI
- ▸Wide economic moat
- ▸Compounder quality: strong returns + growth
Growth
10.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 10.0 |
- ▸Strong growth: 35% YoY
Momentum
3.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 6.9 |
| OBV | 1.0 |
| MA position | 2.2 |
| Volume | 2.3 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA but MA still rising (+3.2%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
8.2/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 8.2 |
| Analyst rating | 6.8 |
| Price target | 9.8 |
- ▸LLM news sentiment: +0.64 (n=2)
- ▸Light analyst coverage (3.0) — signal dampened
- ▸Analyst upside: 69%
Insider
4.3/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 3.7 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
6.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.8 |
| quality rank | 8.3 |
| growth rank | 8.7 |
- ▸Best-in-class margins
- ▸Industry growth leader
Technical
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 7.5 |
| support resistance | 8.1 |
| 52w position | 3.1 |
Risk (lower is worse)
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.6 |
| days to cover | 8.9 |
| volatility | 1.3 |
| put call | 10.0 |
| implied vol | 0.0 |
| beta | 10.0 |
| debt equity | 9.6 |
- ▸High IV: 129%
Catalyst
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| news activity | 7.0 |
- ▸Earnings in 11 days
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (5)
- ASYMMETRY:4.9>=1.5
- INSIDER:OK
- 8K:CLEAN
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- MOMENTUM:3.4<4.5
Warning (1)
- EARNINGS_PROXIMITY:11d<=14d (soft)
Reward-to-Risk
4.91
Upside
+44.0%
Downside
9.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $0.5B<$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: ASYMMETRY:4.9>=1.5. Top dim: Growth at 10.0; weakest: Momentum at 3.4. No conviction either direction.
The strongest dimensions are Growth at 10.0, Sentiment at 8.2, and Catalyst at 7.4; the weakest are Momentum at 3.4, Insider at 4.3, and Value at 6.0. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 4.91 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Strong Revenue Growth
Trip ifRevenue growth falls below 15% YoY from the current 35%.
- P2Wide Moat Quality
Trip ifPiotroski F-Score falls below 5 from the current 8.
- P3Negative Cash Conversion
Trip ifFree cash flow to net income rises above 50% from the current -65%.
- P4Analyst Target Upside
Trip ifUpside to the analyst target falls below 15% from the current 45.6%.
- P5Pullback In Uptrend
Trip ifPrice falls below the $10.76 stop level from the current $11.25.