Value
9.8/10data confidence 50%| Component | Sub-score |
|---|---|
| P/E | 9.1 |
| P/S | 10.0 |
| PEG | 10.0 |
- ▸PEG: 0.28
- ▸Attractively valued
GRVY · Why this verdict
Why GRAVITY Co. (GRVY) 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 score6.5/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The stock screens as attractively valued with a PEG ratio of 0.28 and an estimated 37% margin of safety, supporting the case that shares are undervalued relative to growth. Bull case | The margin of safety should stay above 25% or widen further over the next 12 months if the valuation gap persists or the price doesn't fully close it. | →Stable |
| CounterA low PEG ratio in a cyclical gaming business can reflect optimistic forward earnings estimates that don't materialize, closing the apparent valuation gap without the stock price needing to rise. | ||
Fundamental quality is strong, with a near-perfect Piotroski F-Score of 9 out of 9, indicating broad-based improvement across profitability, leverage, and efficiency metrics. Quality breakdown | The Piotroski F-Score should remain at 7 or above over the next 12 months if the company sustains its current fundamental strength. | →Stable |
| CounterA high Piotroski F-Score is a backward-looking snapshot of the last reporting period and can decline quickly if a single quarter's margins or leverage metrics deteriorate. | ||
The engine flags exhausted upside asymmetry with modeled upside at 0.0% against 14.2% modeled downside, meaning the current price offers little further modeled reward relative to its risk. Gates warning | The asymmetry ratio should turn positive above 1.5 over the next 12 months if the price pulls back or the price target is raised. | →Stable |
| CounterAn asymmetry ratio of exactly 0.0% upside can reflect a temporarily stretched price near resistance rather than a genuine ceiling, and can improve quickly once the stock consolidates or estimates are revised. | ||
The stock is technically overbought with an RSI near 71 while the 200-day moving-average slope has gone flat, suggesting the recent uptrend's momentum may be stalling. Momentum breakdown | RSI should cool into a neutral 40-60 range over the next 12 months without a sharp price decline if the trend digests healthily. | →Stable |
| CounterA flat moving-average slope after a strong run can simply reflect consolidation before the next leg higher, rather than signaling trend exhaustion. | ||
The stock's small market capitalization of about $0.5 billion keeps it below institutional reach, per the engine's edge rationale, which may limit the demand base needed to close the valuation gap. Edge rationale | Market capitalization should grow above $1 billion over the next 12 months if the growth and valuation thesis draws in broader institutional demand. | →Stable |
| CounterSmall-cap stocks below institutional thresholds can still re-rate meaningfully on strong retail demand and continued earnings execution, without needing institutional sponsorship. | ||
The stock screens as attractively valued with a PEG ratio of 0.28 and an estimated 37% margin of safety, supporting the case that shares are undervalued relative to growth.
→StableBull case
- Expectation
- The margin of safety should stay above 25% or widen further over the next 12 months if the valuation gap persists or the price doesn't fully close it.
CounterA low PEG ratio in a cyclical gaming business can reflect optimistic forward earnings estimates that don't materialize, closing the apparent valuation gap without the stock price needing to rise.
Fundamental quality is strong, with a near-perfect Piotroski F-Score of 9 out of 9, indicating broad-based improvement across profitability, leverage, and efficiency metrics.
→StableQuality breakdown
- Expectation
- The Piotroski F-Score should remain at 7 or above over the next 12 months if the company sustains its current fundamental strength.
CounterA high Piotroski F-Score is a backward-looking snapshot of the last reporting period and can decline quickly if a single quarter's margins or leverage metrics deteriorate.
The engine flags exhausted upside asymmetry with modeled upside at 0.0% against 14.2% modeled downside, meaning the current price offers little further modeled reward relative to its risk.
→StableGates warning
- Expectation
- The asymmetry ratio should turn positive above 1.5 over the next 12 months if the price pulls back or the price target is raised.
CounterAn asymmetry ratio of exactly 0.0% upside can reflect a temporarily stretched price near resistance rather than a genuine ceiling, and can improve quickly once the stock consolidates or estimates are revised.
The stock is technically overbought with an RSI near 71 while the 200-day moving-average slope has gone flat, suggesting the recent uptrend's momentum may be stalling.
→StableMomentum breakdown
- Expectation
- RSI should cool into a neutral 40-60 range over the next 12 months without a sharp price decline if the trend digests healthily.
CounterA flat moving-average slope after a strong run can simply reflect consolidation before the next leg higher, rather than signaling trend exhaustion.
The stock's small market capitalization of about $0.5 billion keeps it below institutional reach, per the engine's edge rationale, which may limit the demand base needed to close the valuation gap.
→StableEdge rationale
- Expectation
- Market capitalization should grow above $1 billion over the next 12 months if the growth and valuation thesis draws in broader institutional demand.
CounterSmall-cap stocks below institutional thresholds can still re-rate meaningfully on strong retail demand and continued earnings execution, without needing institutional sponsorship.
TrendMatrix Research · core thesis
Engine thesis — one sentence
GRAVITY screens as attractively valued with strong fundamental quality and growth, but the engine flags exhausted upside asymmetry and overbought, flattening momentum, consistent with the recommendation to maintain the existing position without adding more.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.9 |
| ROA | 3.9 |
| Gross margin | 2.4 |
| Op margin | 7.0 |
| Net margin | 6.6 |
| Current ratio | 6.4 |
| Moat | 6.4 |
| Piotroski F | 10.0 |
- ▸Strong Piotroski F-Score: 9/9
Growth
7.9/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 7.1 |
| EPS growth | 8.7 |
Momentum
2.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 0.6 |
| OBV | 1.0 |
| MA position | 8.0 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
4.5/10data confidence 67%| Component | Sub-score |
|---|---|
| LLM sentiment | 4.0 |
| Analyst rating | 5.0 |
Insider
5.0/10data confidence 50%Peer rank
6.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.8 |
| quality rank | 3.9 |
| growth rank | 7.1 |
- ▸Conservative debt levels
Technical
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.9 |
| support resistance | 5.6 |
| 52w position | 6.9 |
Risk (lower is worse)
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.4 |
| days to cover | 10.0 |
| volatility | 0.0 |
| beta | 7.0 |
| debt equity | 10.0 |
| news risk | 5.0 |
Catalyst
8.0/10data confidence 25%| Component | Sub-score |
|---|---|
| news activity | 8.0 |
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more. | News modifier -1 (HOLD_IF_HOLDING → SELL_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_F_HOLD|L3:NEWS_MOD=-1Passed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:NO_DATE
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- MOMENTUM:2.9<4.5
Warning (1)
- ASYMMETRY:UPSIDE_EXHAUSTED (upside=0.0%)
Reward-to-Risk
0.00
Upside
+0.0%
Downside
11.3%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeInst Constrain — Small cap ($0.4B) below institutional reach
SuitabilityAggressive — MCap $0.4B<$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: INSIDER:OK. Top dim: Value at 9.8; weakest: Momentum at 2.9. No conviction either direction.
The strongest dimensions are Value at 9.8, Catalyst at 8.0, and Growth at 7.9; the weakest are Momentum at 2.9, Sentiment at 4.5, and Insider at 5.0. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 0.00 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Attractive Valuation Margin Of Safety
Trip ifMargin of safety falls below 10%, from the current 37%, as the price rises or earnings estimates are cut.
- P2Strong Fundamental Quality
Trip ifPiotroski F-Score falls below 5 out of 9, from the current 9 out of 9, in the next reported quarter.
- P3Exhausted Upside Asymmetry
Trip ifAsymmetry ratio rises above 1.5, from the current 0.0, as modeled upside exceeds 10%.
- P4Overbought Momentum Flat Trend
Trip ifMomentum score falls below 3.5, from the current 5.6, for 2 consecutive months.
- P5Small Cap Institutional Constraint
Trip ifMarket capitalization rises above $1 billion, from the current approximately $0.5 billion.