Value
9.1/10data confidence 20%| Component | Sub-score |
|---|---|
| P/S | 9.1 |
- ▸Attractively valued
FLGT · Why this verdict
Why Fulgent Genetics (FLGT) is rated SELL
Updated
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VerdictSELL
Overall score5.3/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company is burning cash, with free cash flow at -28% of revenue, and quality scores 2.4 out of 10, below the 4.0 floor. Quality breakdown | Free cash flow margin improves to better than -10% of revenue within 12 months. | →Stable |
| CounterThe balance sheet is conservative (debt-to-equity component 10.0, current ratio component 6.7), so ample liquidity could fund losses long enough for volume to scale. | ||
At $20.10 the stock trades 19.7% above the $16.15 analyst target, leaving no analyst-supported upside from the current price. Upside pct | Analyst targets are raised above the current price as results improve. | →Stable |
| CounterAnalyst coverage may simply be stale; the price still sits above its 200-day average and institutions are accumulating. | ||
The last two quarters missed estimates (-32.18% and -3.4%) after two prior beats, so losses are widening versus expectations. Last 4 quarters | EPS returns to beating consensus, narrowing the loss per share over the next two reports. | →Stable |
| CounterThe 12-quarter history is mostly beats against deeply negative estimates, so the recent misses may be noise in a business with lumpy testing revenue. | ||
Latest quarterly revenue of $85.4M is only 4.4% above the year-earlier $81.8M, and the prior quarter fell to $71.1M, showing choppy rather than steady growth. Revenue quarters | Revenue growth re-accelerates to double digits year over year. | →Stable |
| CounterSequential recovery from $71.1M to $85.4M and a $86.3M next-quarter estimate suggest the dip was temporary. | ||
The company is burning cash, with free cash flow at -28% of revenue, and quality scores 2.4 out of 10, below the 4.0 floor.
→StableQuality breakdown
- Expectation
- Free cash flow margin improves to better than -10% of revenue within 12 months.
CounterThe balance sheet is conservative (debt-to-equity component 10.0, current ratio component 6.7), so ample liquidity could fund losses long enough for volume to scale.
At $20.10 the stock trades 19.7% above the $16.15 analyst target, leaving no analyst-supported upside from the current price.
→StableUpside pct
- Expectation
- Analyst targets are raised above the current price as results improve.
CounterAnalyst coverage may simply be stale; the price still sits above its 200-day average and institutions are accumulating.
The last two quarters missed estimates (-32.18% and -3.4%) after two prior beats, so losses are widening versus expectations.
→StableLast 4 quarters
- Expectation
- EPS returns to beating consensus, narrowing the loss per share over the next two reports.
CounterThe 12-quarter history is mostly beats against deeply negative estimates, so the recent misses may be noise in a business with lumpy testing revenue.
Latest quarterly revenue of $85.4M is only 4.4% above the year-earlier $81.8M, and the prior quarter fell to $71.1M, showing choppy rather than steady growth.
→StableRevenue quarters
- Expectation
- Revenue growth re-accelerates to double digits year over year.
CounterSequential recovery from $71.1M to $85.4M and a $86.3M next-quarter estimate suggest the dip was temporary.
Per-dimension breakdown
Quality
2.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.0 |
| Gross margin | 3.1 |
| Op margin | 0.0 |
| Net margin | 0.0 |
| Current ratio | 6.7 |
| FCF quality | 0.0 |
| Moat | 5.4 |
| Piotroski F | 6.7 |
- ▸Cash-burning: FCF -28% of revenue
- ▸No competitive moat
- ▸Quality concerns
Growth
3.6/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 3.6 |
Momentum
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 4.0 |
| OBV | 10.0 |
| MA position | 8.0 |
| Volume | 6.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 3.3 |
| erm sentiment | 5.0 |
- ▸Below analyst target
Insider
6.0/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 3.0 |
- ▸Insider selling (low materiality) — $117,132 (0.020% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 9.4 |
| quality rank | 1.2 |
| growth rank | 1.9 |
- ▸Conservative debt levels
Technical
3.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.6 |
| support resistance | 3.6 |
| 52w position | 3.9 |
Risk (lower is worse)
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 3.8 |
| days to cover | 3.5 |
| volatility | 3.7 |
| put call | 10.0 |
| implied vol | 0.2 |
| beta | 7.4 |
| debt equity | 10.0 |
- ▸High IV: 79%
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
- ▸Earnings concerns: 2B/2M
- ▸Earnings in 7 days
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (5)
- MOMENTUM:6.7>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:-2.4=NEGATIVE
- EARNINGS_PROXIMITY:7d<=7d
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-2.42
Upside
-25.0%
Downside
10.3%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeInst Constrain — Small cap ($0.6B) below institutional reach
SuitabilityAggressive — MCap $0.6B<$5B
Investment implication
The SELL_IF_HOLDING verdict reflects the ASYMMETRY gate's -2.4=NEGATIVE outcome against Value at 9.1 and asymmetric R:R of -2.42.
The strongest dimensions are Value at 9.1, Momentum at 6.7, and Insider at 6.0; the weakest are Quality at 2.4, Technical at 3.4, and Growth at 3.6. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of -2.42 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Cash Burning Operations
Trip ifFree cash flow margin rises above -10% of revenue from the current -28%.
- P2Price Above Analyst Target
Trip ifAnalyst target rises above $22.11, at least 10% above the current $20.10 price.
- P3Recent Earnings Misses
Trip ifEPS surprise exceeds 0% for 2 consecutive quarters.
- P4Uneven Revenue Growth
Trip ifYear-over-year revenue growth exceeds 10% for 2 consecutive quarters.