Value
7.7/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 4.0 |
| P/S | 8.5 |
| Fwd P/E | 7.1 |
| PEG | 10.0 |
| Analyst target | 9.0 |
- ▸Forward P/E: 17.7x
- ▸PEG: 0.22
- ▸Attractively valued
EROC · Why this verdict
Why ERock (EROC) 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 score5.2/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
ERock screens as cheap (forward P/E 15.7x) with 140.9% upside to the analyst target and a large recent earnings beat, but revenue is down 42%, quality is weak, short interest is reported at 281%, and the $385M market cap is below the $400M investable minimum.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
ERock's revenue is declining 42%, with the latest reported quarter at $39.9M versus $68.5M a year earlier. Growth breakdown | Revenue stabilizes and approaches the $176.7M next-quarter estimate, ending the decline within 12 months. | →Stable |
| CounterThe next-quarter revenue estimate is more than four times the latest quarter, which looks inconsistent with a 42% decline and suggests the data or estimates are unreliable. | ||
The $19.25 analyst target is 140.9% above the $7.99 price, and valuation scores attractive with a PEG of 0.18. Analyst target | Price moves toward the $19.25 target as earnings are delivered, closing part of the 140.9% gap. | →Stable |
| CounterCoverage is light and the signal is dampened, and the forward P/E of 15.7x is not cheap for a company with falling revenue and no moat. | ||
ERock reported EPS of $1.04 on 2026-08-11 against an estimate of -$0.29, a 455% beat, with the next report due 2026-11-12. Last 4 quarters | EPS stays positive and above estimates at the 2026-11-12 report. | ↓Deteriorating |
| CounterOnly one quarter of earnings history exists, and a swing from an expected loss to a $1.04 profit while revenue is falling 42% may be a one-off item. | ||
Short interest is reported at 281%, price is 61% off its high, and momentum is 1.8/10 with falling on-balance volume and an RSI of 24. Key risks | Short interest falls and price reclaims its 200-day average over 12 months. | ↓Deteriorating |
| CounterShort interest above 100% is likely a data artifact, but if even partly true it signals heavy skepticism, and a 105% implied volatility keeps both squeezes and further declines on the table. | ||
At a $385M market cap, ERock is below the $400M minimum for the investable universe, with no competitive moat and weak quality (2.4/10). Warnings | Market cap rises above $400M as price recovers, bringing the stock back into the investable universe. | ↓Deteriorating |
| CounterA smaller, illiquid company with weak quality can slip further below the threshold, narrowing the pool of buyers. | ||
ERock's revenue is declining 42%, with the latest reported quarter at $39.9M versus $68.5M a year earlier.
→StableGrowth breakdown
- Expectation
- Revenue stabilizes and approaches the $176.7M next-quarter estimate, ending the decline within 12 months.
CounterThe next-quarter revenue estimate is more than four times the latest quarter, which looks inconsistent with a 42% decline and suggests the data or estimates are unreliable.
The $19.25 analyst target is 140.9% above the $7.99 price, and valuation scores attractive with a PEG of 0.18.
→StableAnalyst target
- Expectation
- Price moves toward the $19.25 target as earnings are delivered, closing part of the 140.9% gap.
CounterCoverage is light and the signal is dampened, and the forward P/E of 15.7x is not cheap for a company with falling revenue and no moat.
ERock reported EPS of $1.04 on 2026-08-11 against an estimate of -$0.29, a 455% beat, with the next report due 2026-11-12.
↓DeterioratingLast 4 quarters
- Expectation
- EPS stays positive and above estimates at the 2026-11-12 report.
CounterOnly one quarter of earnings history exists, and a swing from an expected loss to a $1.04 profit while revenue is falling 42% may be a one-off item.
Short interest is reported at 281%, price is 61% off its high, and momentum is 1.8/10 with falling on-balance volume and an RSI of 24.
↓DeterioratingKey risks
- Expectation
- Short interest falls and price reclaims its 200-day average over 12 months.
CounterShort interest above 100% is likely a data artifact, but if even partly true it signals heavy skepticism, and a 105% implied volatility keeps both squeezes and further declines on the table.
At a $385M market cap, ERock is below the $400M minimum for the investable universe, with no competitive moat and weak quality (2.4/10).
↓DeterioratingWarnings
- Expectation
- Market cap rises above $400M as price recovers, bringing the stock back into the investable universe.
CounterA smaller, illiquid company with weak quality can slip further below the threshold, narrowing the pool of buyers.
Per-dimension breakdown
Quality
2.4/10data confidence 86%| Component | Sub-score |
|---|---|
| Gross margin | 0.1 |
| Op margin | 0.0 |
| Net margin | 0.0 |
| Current ratio | 5.3 |
| Moat | 4.8 |
| Piotroski F | 4.4 |
- ▸No competitive moat
- ▸Quality concerns
Growth
5.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 0.0 |
| EPS growth | 10.0 |
- ▸Declining revenue: -42%
Momentum
3.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.0 |
| MACD | 1.4 |
| OBV | 10.0 |
| MA position | 2.5 |
| Volume | 1.6 |
- ▸Capitulation risk (RSI 28, below 200MA)
- ▸Volume accumulation (rising OBV)
Sentiment
7.9/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.0 |
| Analyst rating | 7.9 |
| Price target | 10.0 |
- ▸Light analyst coverage (8.0) — signal dampened
- ▸Analyst upside: 146%
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
3.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.0 |
| quality rank | 0.0 |
| growth rank | 0.2 |
Technical
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 7.1 |
| support resistance | 8.0 |
| 52w position | 0.0 |
Risk (lower is worse)
3.3/10data confidence 100%| Component | Sub-score |
|---|---|
| days to cover | 6.8 |
| volatility | 0.0 |
| put call | 0.0 |
| implied vol | 0.0 |
| debt equity | 9.5 |
- ▸Elevated put/call: 4.50
- ▸High IV: 125%
Catalyst
5.0/10data confidence 75%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings timing | 5.0 |
| news activity | 5.0 |
- ▸Earnings in 13 days
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (5)
- ASYMMETRY:7.6>=1.5
- INSIDER:OK
- 8K:CLEAN
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- MOMENTUM:3.7<4.5
Warning (1)
- EARNINGS_PROXIMITY:13d<=14d (soft)
Reward-to-Risk
7.59
Upside
+113.9%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeInst Constrain — Small cap ($0.4B) below institutional reach
SuitabilitySpeculative — Drawdown -56% (>40% off 52w high)
Investment implication
The SELL_IF_HOLDING verdict reflects the MOMENTUM gate's 3.7<4.5 outcome against Sentiment at 7.9 and asymmetric R:R of 7.59.
The strongest dimensions are Sentiment at 7.9, Value at 7.7, and Insider at 7.3; the weakest are Quality at 2.4, Peer rank at 3.2, and Risk (lower is worse) at 3.3. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 7.59 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Declining Revenue Base
Trip ifQuarterly revenue falls below $30M from the latest $39.9M.
- P2Analyst Target Upside
Trip ifAnalyst target falls below $12 from current $19.25.
- P3Single Quarter Earnings Beat
Trip ifEPS actual falls below estimate at the 2026-11-12 report, with a miss of more than 10%.
- P4Extreme Short Interest Downtrend
Trip ifPrice falls below the $7.43 stop level, more than 7% under the current $7.99.
- P5Below Minimum Market Cap
Trip ifMarket cap falls below $300M from current $385M.