Value
6.3/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 4.8 |
| P/S | 7.9 |
| EV/EBITDA | 3.2 |
| Fwd P/E | 6.1 |
| PEG | 7.9 |
- ▸Forward P/E: 21.1x
- ▸PEG: 0.85
CWCO · Why this verdict
Why Consolidated Water Co. (CWCO) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.2/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Consolidated Water shows a death-cross technical pattern but with MACD improving and RSI at 43, which the engine classifies as a recovery setup, backed by a 3-of-4 earnings beat streak. Chart pattern detection | The stock's momentum score recovers above the 5.5 threshold and the death-cross gate clears within 2 quarters. | →Stable |
| CounterThe death cross remains a hard-block gate failure today, and the 200-day moving-average slope is flat rather than turning up, meaning the recovery read has not yet been technically confirmed. | ||
Consolidated Water shows a 24% analyst-implied upside alongside a 3-of-4 earnings beat streak, and the engine's own risk/reward framework shows 24.2% upside versus just 5.0% downside. Bull case | Price appreciates toward the analyst target, narrowing the upside gap to under 10% within 12 months. | →Stable |
| CounterThe bear case flags weak growth and an 11% revenue decline, meaning the upside case may rely on multiple expansion rather than fundamental improvement. | ||
Consolidated Water converts 128% of net income into free cash flow and holds a strong Piotroski F-Score of 7/9, indicating solid balance-sheet quality despite declining revenue. Quality breakdown | FCF-to-net-income conversion stays above 100% and the Piotroski F-Score remains at 6 or higher over the next fiscal year. | →Stable |
| CounterAn 11% revenue decline combined with no competitive moat raises the risk that current strong cash conversion reflects a shrinking asset base rather than durable operating strength. | ||
A debt-to-equity ratio of 1.2 triggers a leverage penalty of -0.5 points in the engine's scoring, a moderate balance-sheet risk factor for a utility. Bear case | Debt-to-equity ratio stays at or below 1.3 over the next 2 fiscal quarters. | →Stable |
| CounterCombined with declining revenue of -11% and weak growth, elevated leverage increases the risk of the balance sheet becoming stretched if the top-line contraction continues. | ||
Consolidated Water shows a strong recent earnings history, with 3 beats in the last 4 quarters, alongside its dividend metrics, with the next earnings catalyst due in 37 days. Catalyst breakdown | The company beats consensus again at its next report, extending the beat streak. | →Stable |
| CounterWeak underlying growth and an 11% revenue decline mean any earnings beat could stem from cost control rather than durable demand, limiting its signal value for a re-rating. | ||
Consolidated Water shows a death-cross technical pattern but with MACD improving and RSI at 43, which the engine classifies as a recovery setup, backed by a 3-of-4 earnings beat streak.
→StableChart pattern detection
- Expectation
- The stock's momentum score recovers above the 5.5 threshold and the death-cross gate clears within 2 quarters.
CounterThe death cross remains a hard-block gate failure today, and the 200-day moving-average slope is flat rather than turning up, meaning the recovery read has not yet been technically confirmed.
Consolidated Water shows a 24% analyst-implied upside alongside a 3-of-4 earnings beat streak, and the engine's own risk/reward framework shows 24.2% upside versus just 5.0% downside.
→StableBull case
- Expectation
- Price appreciates toward the analyst target, narrowing the upside gap to under 10% within 12 months.
CounterThe bear case flags weak growth and an 11% revenue decline, meaning the upside case may rely on multiple expansion rather than fundamental improvement.
Consolidated Water converts 128% of net income into free cash flow and holds a strong Piotroski F-Score of 7/9, indicating solid balance-sheet quality despite declining revenue.
→StableQuality breakdown
- Expectation
- FCF-to-net-income conversion stays above 100% and the Piotroski F-Score remains at 6 or higher over the next fiscal year.
CounterAn 11% revenue decline combined with no competitive moat raises the risk that current strong cash conversion reflects a shrinking asset base rather than durable operating strength.
A debt-to-equity ratio of 1.2 triggers a leverage penalty of -0.5 points in the engine's scoring, a moderate balance-sheet risk factor for a utility.
→StableBear case
- Expectation
- Debt-to-equity ratio stays at or below 1.3 over the next 2 fiscal quarters.
CounterCombined with declining revenue of -11% and weak growth, elevated leverage increases the risk of the balance sheet becoming stretched if the top-line contraction continues.
Consolidated Water shows a strong recent earnings history, with 3 beats in the last 4 quarters, alongside its dividend metrics, with the next earnings catalyst due in 37 days.
→StableCatalyst breakdown
- Expectation
- The company beats consensus again at its next report, extending the beat streak.
CounterWeak underlying growth and an 11% revenue decline mean any earnings beat could stem from cost control rather than durable demand, limiting its signal value for a re-rating.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Consolidated Water combines a 3-of-4 earnings beat streak and meaningful analyst-implied upside with strong cash conversion and Piotroski quality, but a hard death-cross gate failure, declining revenue, and elevated leverage keep the engine's stance at reducing rather than adding to the position.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.7 |
| ROA | 2.8 |
| Gross margin | 3.3 |
| Op margin | 4.7 |
| Net margin | 6.7 |
| Current ratio | 7.0 |
| FCF quality | 9.3 |
| Moat | 5.4 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 128% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 8/9
Growth
3.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 0.0 |
| EPS growth | 7.0 |
- ▸Declining revenue: -11%
Momentum
2.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 6.2 |
| OBV | 1.0 |
| MA position | 1.0 |
| Volume | 1.5 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -1.2%/30d — confirmed downtrend
Sentiment
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.9 |
| Price target | 9.5 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (1.0) — signal dampened
- ▸Analyst upside: 49%
Insider
6.0/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 8.0 |
| notable moves | 5.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
3.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.8 |
| quality rank | 2.2 |
| growth rank | 0.0 |
- ▸Conservative debt levels
Technical
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.4 |
| support resistance | 8.1 |
| 52w position | 4.9 |
Risk (lower is worse)
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.1 |
| days to cover | 5.5 |
| volatility | 6.2 |
| implied vol | 0.0 |
| beta | 9.9 |
| debt equity | 10.0 |
- ▸High IV: 98%
- ▸Concentration risks: 2 MED (10-K Item 1A)
Catalyst
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 6.5 |
- ▸Strong earnings: 3B/1M
- ▸Dividend aristocrat: 1.9% yield
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- ASYMMETRY:5.2>=1.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:33d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:2.6<4.5
- DEATH_CROSS:HARD_BLOCK
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
5.25
Upside
+26.5%
Downside
5.0%
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
The F-path SELL output reflects an overall score of 5.2 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Technical at 7.1) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:2.6<4.5, DEATH_CROSS:HARD_BLOCK) reinforce the read. Current asymmetry R:R is 5.25 — supplementary context, not the trigger for this path.
The strongest dimensions are Technical at 7.1, Sentiment at 6.8, and Risk (lower is worse) at 6.6; the weakest are Momentum at 2.6, Peer rank at 3.5, and Growth at 3.5. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of 5.25 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Death Cross Recovery Setup
Trip ifThe 200-day moving-average slope falls below 0% over the next 30 days, or the stock fails to reclaim the 200-day moving average within 2 quarters.
- P2Analyst Upside Valuation
Trip ifRevenue growth stays below -5% YoY for 2 more consecutive quarters, undermining the case for price appreciation toward the analyst target.
- P3Cash Conversion Quality Strength
Trip ifFCF-to-net-income conversion falls below 80% or the Piotroski F-Score drops below 5 at the next annual assessment.
- P4Leverage Balance Sheet Risk
Trip ifDebt-to-equity ratio rises above 1.5, or revenue growth stays below -10% YoY for 2 more consecutive quarters.
- P5Dividend Earnings Catalyst
Trip ifConsolidated Water misses consensus EPS estimates by more than 10% at its next earnings report.