Value
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.3 |
| P/S | 9.8 |
| EV/EBITDA | 7.3 |
| Fwd P/E | 6.9 |
| PEG | 10.0 |
| Analyst target | 6.0 |
- ▸Forward P/E: 18.3x
- ▸PEG: 0.09
- ▸Attractively valued
CMP · Why this verdict
Why Compass Minerals Intl (CMP) 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
ConfidenceHIGH
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Compass Minerals is a cheap, cash-generative salt producer with a 17.9% gap to the analyst target, but its revenue leans on one weather-dependent product, it has no moat, and earnings are volatile.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The stock trades at a forward P/E of 16.9x and a PEG of 0.09, with the $21.27 price 17.9% below the $25.07 analyst target. Valuation breakdown | Price should close part of the gap to the $25.07 target over the next 12 months as earnings recover. | →Stable |
| CounterThe low PEG rests on a rebound from depressed earnings, and an August 2026 miss of -$0.14 versus -$0.06 shows recovery is not guaranteed. | ||
The Salt segment is 82.0% of revenue and highway deicing salt alone is 63.0%, so results depend on winter weather and one product line. Bear case | Revenue mix should diversify away from deicing salt, or salt volumes should hold up through normal winters, over the next 12 months. | ↓Deteriorating |
| CounterSalt demand is steady over a cycle, and seasonal swings in revenue (from $215M to $453M per quarter) are predictable rather than a sign of weakness. | ||
Cash conversion is excellent at 495% FCF to net income with a Piotroski F-Score of 7/9, but the business has no competitive moat and gross margin scores 0.0. Quality breakdown | Free cash flow should continue to exceed net income and fund debt reduction. | →Stable |
| CounterA 495% ratio on a tiny net income base overstates cash strength, and debt-to-equity scores only 2.1/10, so leverage limits how much cash reaches shareholders. | ||
EPS beat in 3 of the last 4 quarters but missed by -$0.08 in August 2026, and average surprise is -7.0%, showing inconsistent earnings delivery. Last 4 quarters | EPS should beat estimates in the report due in 30 days and over the following quarters. | →Stable |
| CounterThe 12-quarter history holds 6 misses, some very large (-1000% in February 2025), so the recent beat streak may not last. | ||
The stock is below its 200-day average, which is still rising 1.9% per 30 days, on-balance volume shows accumulation, and the put/call ratio is an elevated 1.50. Momentum breakdown | Price should reclaim its 200-day average with volume accumulation continuing, and the put/call ratio should ease. | ↑Improving |
| CounterOptions traders are leaning bearish with a put/call ratio of 1.50, and momentum of 4.8 sits barely above the 4.5 threshold. | ||
The stock trades at a forward P/E of 16.9x and a PEG of 0.09, with the $21.27 price 17.9% below the $25.07 analyst target.
→StableValuation breakdown
- Expectation
- Price should close part of the gap to the $25.07 target over the next 12 months as earnings recover.
CounterThe low PEG rests on a rebound from depressed earnings, and an August 2026 miss of -$0.14 versus -$0.06 shows recovery is not guaranteed.
The Salt segment is 82.0% of revenue and highway deicing salt alone is 63.0%, so results depend on winter weather and one product line.
↓DeterioratingBear case
- Expectation
- Revenue mix should diversify away from deicing salt, or salt volumes should hold up through normal winters, over the next 12 months.
CounterSalt demand is steady over a cycle, and seasonal swings in revenue (from $215M to $453M per quarter) are predictable rather than a sign of weakness.
Cash conversion is excellent at 495% FCF to net income with a Piotroski F-Score of 7/9, but the business has no competitive moat and gross margin scores 0.0.
→StableQuality breakdown
- Expectation
- Free cash flow should continue to exceed net income and fund debt reduction.
CounterA 495% ratio on a tiny net income base overstates cash strength, and debt-to-equity scores only 2.1/10, so leverage limits how much cash reaches shareholders.
EPS beat in 3 of the last 4 quarters but missed by -$0.08 in August 2026, and average surprise is -7.0%, showing inconsistent earnings delivery.
→StableLast 4 quarters
- Expectation
- EPS should beat estimates in the report due in 30 days and over the following quarters.
CounterThe 12-quarter history holds 6 misses, some very large (-1000% in February 2025), so the recent beat streak may not last.
The stock is below its 200-day average, which is still rising 1.9% per 30 days, on-balance volume shows accumulation, and the put/call ratio is an elevated 1.50.
↑ImprovingMomentum breakdown
- Expectation
- Price should reclaim its 200-day average with volume accumulation continuing, and the put/call ratio should ease.
CounterOptions traders are leaning bearish with a put/call ratio of 1.50, and momentum of 4.8 sits barely above the 4.5 threshold.
Per-dimension breakdown
Quality
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.4 |
| ROA | 3.3 |
| Gross margin | 0.0 |
| Op margin | 2.0 |
| Net margin | 0.7 |
| Current ratio | 7.0 |
| FCF quality | 10.0 |
| Moat | 3.8 |
| Piotroski F | 7.8 |
- ▸Excellent cash conversion: 495% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
Growth
6.3/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.6 |
| EPS growth | 10.0 |
Momentum
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 9.3 |
| OBV | 10.0 |
| MA position | 5.2 |
| Volume | 4.6 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA but MA still rising (+1.6%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.3 |
| Price target | 8.5 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (4.0) — signal dampened
- ▸Analyst upside: 29%
Insider
5.4/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 6.1 |
| notable moves | 5.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
3.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.6 |
| quality rank | 5.3 |
| growth rank | 1.9 |
Technical
2.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.6 |
| support resistance | 1.7 |
| 52w position | 3.3 |
Risk (lower is worse)
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.4 |
| days to cover | 6.3 |
| volatility | 4.1 |
| put call | 0.0 |
| implied vol | 4.0 |
| beta | 6.0 |
| debt equity | 2.1 |
- ▸Elevated put/call: 4.20
- ▸Concentration risks: 4 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
- ▸Strong earnings: 3B/1M
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:6.7>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:25d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.9<1.5@spot
Warning (0)
none
Reward-to-Risk
0.91
Upside
+9.4%
Downside
10.3%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeSector Rotation — Basic Materials sector out of favor, value=7.2
SuitabilityAggressive — MCap $1.0B<$5B
Investment implication
The F-path SELL output reflects an overall score of 3.3 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 7.2) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:0.9<1.5@spot) reinforce the read. Current asymmetry R:R is 0.91 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 7.2, Momentum at 6.7, and Sentiment at 6.7; the weakest are Technical at 2.5, Peer rank at 3.1, and Quality at 4.1. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of 0.91 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Salt Deicing Revenue Concentration
Trip ifSalt segment share of revenue exceeds 90% from the current 82.0%.
- P2Attractive Valuation With Target Upside
Trip ifAnalyst target falls below $22.30, leaving less than 5% upside from the current $21.27.
- P3Strong Cash Conversion No Moat
Trip ifFree cash flow falls below 100% of net income from the current 495%.
- P4Volatile Earnings Record
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P5Pullback In Uptrend With Bearish Options
Trip ifPrice falls below the $19.95 support stop, more than 6% under the current $21.27.