Value
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.7 |
| P/S | 8.1 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 4.4 |
| PEG | 10.0 |
| Analyst target | 9.0 |
- ▸Forward P/E: 28.0x
- ▸PEG: 0.07
FTK · Why this verdict
Why Flotek Industries (FTK) 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
ConfidenceHIGH
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Flotek is growing revenue about 70% with a 38% return on equity and 41.7% analyst upside, but negative free cash flow, 27% short interest, falling momentum and large insider selling make the risk profile poor.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Revenue is growing about 70% year over year, with quarterly revenue of $99.4M versus $58.4M a year earlier, and return on equity is an excellent 38%. Growth breakdown | Year-over-year revenue growth stays above 30% through the next 12 months. | →Stable |
| CounterA 70% rate from a small base is hard to sustain and the next-quarter estimate of $95.8M is below the latest $99.4M. | ||
Free cash flow is -60% of net income, flagged as an earnings quality red flag, so reported profit is not turning into cash. Quality breakdown | Free cash flow turns positive and exceeds 50% of net income. | →Stable |
| CounterFast-growing industrial firms absorb cash in working capital and inventory, so negative free cash flow may reverse as growth slows. | ||
Short interest is 27% and implied volatility 101%, with the risk score at 3.2, barely above the 3.0 floor and not yet confirmed over 3 checks. Key risks | Short interest falls below 15% and risk score stays above 4.0. | ↑Improving |
| CounterHigh short interest in a fast-growing, oversold stock (RSI 29) can fuel a squeeze if earnings beat. | ||
Insiders sold about $60.0M of stock and bought $34.3M in 90 days, a net sale of roughly $25.7M, equal to about 2.97% of market cap. Insider | Net insider selling falls below $5M per quarter. | →Stable |
| CounterThe data shows one large purchase offsetting one large sale, which may be a block transfer between large holders rather than a view on the business. | ||
The $33.86 analyst target is 41.7% above the $23.90 price, with 13.7% downside to the stop level. Upside pct | Price moves toward the $33.86 target as growth continues. | →Stable |
| CounterMomentum is weak at 2.7 out of 10 with falling volume flow, and analysts may need to trim targets if cash conversion does not improve. | ||
Revenue is growing about 70% year over year, with quarterly revenue of $99.4M versus $58.4M a year earlier, and return on equity is an excellent 38%.
→StableGrowth breakdown
- Expectation
- Year-over-year revenue growth stays above 30% through the next 12 months.
CounterA 70% rate from a small base is hard to sustain and the next-quarter estimate of $95.8M is below the latest $99.4M.
Free cash flow is -60% of net income, flagged as an earnings quality red flag, so reported profit is not turning into cash.
→StableQuality breakdown
- Expectation
- Free cash flow turns positive and exceeds 50% of net income.
CounterFast-growing industrial firms absorb cash in working capital and inventory, so negative free cash flow may reverse as growth slows.
Short interest is 27% and implied volatility 101%, with the risk score at 3.2, barely above the 3.0 floor and not yet confirmed over 3 checks.
↑ImprovingKey risks
- Expectation
- Short interest falls below 15% and risk score stays above 4.0.
CounterHigh short interest in a fast-growing, oversold stock (RSI 29) can fuel a squeeze if earnings beat.
Insiders sold about $60.0M of stock and bought $34.3M in 90 days, a net sale of roughly $25.7M, equal to about 2.97% of market cap.
→StableInsider
- Expectation
- Net insider selling falls below $5M per quarter.
CounterThe data shows one large purchase offsetting one large sale, which may be a block transfer between large holders rather than a view on the business.
The $33.86 analyst target is 41.7% above the $23.90 price, with 13.7% downside to the stop level.
→StableUpside pct
- Expectation
- Price moves toward the $33.86 target as growth continues.
CounterMomentum is weak at 2.7 out of 10 with falling volume flow, and analysts may need to trim targets if cash conversion does not improve.
Per-dimension breakdown
Quality
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 7.2 |
| Gross margin | 0.9 |
| Op margin | 6.0 |
| Net margin | 6.5 |
| Current ratio | 6.3 |
| FCF quality | 0.0 |
| Moat | 6.8 |
| Piotroski F | 6.7 |
- ▸Excellent ROE: 38%
- ▸Earnings quality RED FLAG: -60% FCF/NI
Growth
10.0/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
- ▸Strong growth: 70% YoY
Momentum
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 6.3 |
| OBV | 10.0 |
| MA position | 4.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
8.1/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.4 |
| Analyst rating | 7.6 |
| Price target | 9.5 |
- ▸LLM news sentiment: +0.49 (n=4)
- ▸Light analyst coverage (6.0) — signal dampened
- ▸Analyst upside: 49%
Insider
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 2.0 |
| insider conviction | 5.0 |
| holder change | 7.4 |
| notable moves | 7.0 |
- ▸Heavy insider selling — $25,680,011 (2.719% of mkt cap)
Peer rank
6.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.1 |
| quality rank | 9.2 |
| growth rank | 9.1 |
- ▸Superior ROE vs peers
- ▸Best-in-class margins
Technical
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 5.2 |
| support resistance | 6.3 |
| 52w position | 3.1 |
Risk (lower is worse)
3.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 0.0 |
| days to cover | 1.3 |
| volatility | 0.0 |
| put call | 5.0 |
| implied vol | 0.0 |
| beta | 5.3 |
| debt equity | 8.2 |
| news risk | 6.0 |
- ▸High short interest: 30%
- ▸High IV: 103%
Catalyst
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| news activity | 8.0 |
- ▸Earnings in 5 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)
- MOMENTUM:5.2>=4.5
- ASYMMETRY:2.3>=1.5
- 8K:CLEAN
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- INSIDER:2.72%=EXTREME
- EARNINGS_PROXIMITY:5d<=7d
Warning (1)
- MOMENTUM:5.2<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
2.29
Upside
+29.8%
Downside
13.0%
Sizing output
AVOID
SetupRange Bound — RSI 46 mid-range, Bollinger mid-band
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.42>1.3, MCap $0.9B<$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: MOMENTUM:5.2>=4.5. Top dim: Growth at 10.0; weakest: Risk (lower is worse) at 3.2. No conviction either direction.
The strongest dimensions are Growth at 10.0, Sentiment at 8.1, and Peer rank at 6.9; the weakest are Risk (lower is worse) at 3.2, Technical at 4.9, and Momentum at 5.2. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of 2.29 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Rapid Revenue Growth
Trip ifYear-over-year revenue growth falls below 25% for 2 consecutive quarters.
- P2Negative Cash Conversion
Trip ifFree cash flow rises above 50% of net income from the current -60%.
- P3High Short Interest Risk
Trip ifShort interest falls below 15% of float from the current 27%.
- P4Large Insider Net Selling
Trip ifNet insider selling falls below $5M over 90 days from the current $25.7M.
- P5Analyst Upside To Target
Trip ifAnalyst target falls below $26.29, cutting upside to less than 10% from the current $23.90.