Value
7.9/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 6.9 |
| P/S | 9.8 |
| EV/EBITDA | 6.4 |
| Fwd P/E | 9.0 |
| PEG | 7.1 |
- ▸Forward P/E: 12.1x
- ▸PEG: 0.98
- ▸Attractively valued
IIIN · Why this verdict
Why Insteel Industries (IIIN) 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 score5.1/10
ConfidenceHIGH
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Insteel Industries trades at a forward P/E of 11.9x with 13.3% upside to a $31.45 analyst target, but it has missed earnings in 2 of the last 4 quarters, has no moat and sits in a confirmed downtrend.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The $27.77 price sits 13.3% below the $31.45 analyst target against a 7.1% modeled downside, a reward-to-risk of 1.9. Targets | Price should move toward the $31.45 target as earnings stabilize over 12 months. | →Stable |
| CounterAnalyst upside of 33% before the haircut sits alongside two recent misses, so targets may be too optimistic. | ||
Insteel trades at a forward P/E of 11.9x with a PEG of 1.04, flagged as attractively valued. Valuation breakdown | Forward P/E should stay below 14x as earnings recover. | →Stable |
| CounterA PEG of 1.04 is not a deep discount, and earnings growth scores 0.0, so the multiple may rise if estimates fall. | ||
Insteel missed EPS estimates in 2 of the last 4 quarters, including $0.42 against $0.49 in October 2026 and $0.27 against $0.64 in April 2026. Earnings | EPS should come in at or above consensus in the next 2 reports, starting January 2027. | →Stable |
| CounterConsecutive misses with an average surprise of -12.4% suggest margin pressure that the beats do not offset. | ||
Free cash flow is only 70% of net income, flagged as an earnings quality warning, and the company has no competitive moat. Quality breakdown | Free cash flow should rise above 90% of net income over the next 12 months. | ↑Improving |
| CounterA commodity-linked wire products maker with no moat has little pricing power if steel costs or demand shift. | ||
Price is below the 200-day average with a moving-average slope of -1.0% over 30 days, and RSI is 34. Momentum breakdown | Price should reclaim the 200-day moving average over the next several quarters. | ↓Deteriorating |
| CounterA confirmed downtrend with a bearish MACD suggests the selling is not yet exhausted. | ||
The $27.77 price sits 13.3% below the $31.45 analyst target against a 7.1% modeled downside, a reward-to-risk of 1.9.
→StableTargets
- Expectation
- Price should move toward the $31.45 target as earnings stabilize over 12 months.
CounterAnalyst upside of 33% before the haircut sits alongside two recent misses, so targets may be too optimistic.
Insteel trades at a forward P/E of 11.9x with a PEG of 1.04, flagged as attractively valued.
→StableValuation breakdown
- Expectation
- Forward P/E should stay below 14x as earnings recover.
CounterA PEG of 1.04 is not a deep discount, and earnings growth scores 0.0, so the multiple may rise if estimates fall.
Insteel missed EPS estimates in 2 of the last 4 quarters, including $0.42 against $0.49 in October 2026 and $0.27 against $0.64 in April 2026.
→StableEarnings
- Expectation
- EPS should come in at or above consensus in the next 2 reports, starting January 2027.
CounterConsecutive misses with an average surprise of -12.4% suggest margin pressure that the beats do not offset.
Free cash flow is only 70% of net income, flagged as an earnings quality warning, and the company has no competitive moat.
↑ImprovingQuality breakdown
- Expectation
- Free cash flow should rise above 90% of net income over the next 12 months.
CounterA commodity-linked wire products maker with no moat has little pricing power if steel costs or demand shift.
Price is below the 200-day average with a moving-average slope of -1.0% over 30 days, and RSI is 34.
↓DeterioratingMomentum breakdown
- Expectation
- Price should reclaim the 200-day moving average over the next several quarters.
CounterA confirmed downtrend with a bearish MACD suggests the selling is not yet exhausted.
Per-dimension breakdown
Quality
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.6 |
| ROA | 3.4 |
| Gross margin | 0.0 |
| Op margin | 2.0 |
| Net margin | 2.0 |
| Current ratio | 9.3 |
| FCF quality | 5.3 |
| Moat | 5.4 |
| Piotroski F | 6.7 |
- ▸Earnings quality warning: 70% FCF/NI
- ▸No competitive moat
Growth
3.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 7.0 |
| EPS growth | 0.0 |
Momentum
3.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 0.7 |
| OBV | 10.0 |
| MA position | 1.0 |
| Volume | 3.7 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -1.2%/30d — confirmed downtrend
Sentiment
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 8.7 |
| erm sentiment | 5.0 |
- ▸Analyst upside: 31%
Insider
4.0/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 3.9 |
| notable moves | 3.0 |
- ▸Insider selling (low materiality) — $49,704 (0.009% of mkt cap)
Peer rank
4.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.0 |
| quality rank | 2.1 |
| growth rank | 5.6 |
Technical
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.9 |
| support resistance | 7.6 |
| 52w position | 4.7 |
Risk (lower is worse)
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.3 |
| days to cover | 4.3 |
| volatility | 3.4 |
| put call | 10.0 |
| implied vol | 3.7 |
| beta | 9.8 |
Catalyst
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| dividend safety | 8.5 |
- ▸Earnings concerns: 2B/2M
- ▸Dividend aristocrat: 0.4% 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:1.6>=1.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:76d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:3.8<4.5
- DEATH_CROSS:HARD_BLOCK
- 8K_SERIOUS:2.05
Warning (0)
none
Reward-to-Risk
1.57
Upside
+11.4%
Downside
7.3%
Sizing output
AVOID
SetupFalling Knife — Death cross, below all MAs, RSI 39, MACD bearish
EdgeInst Constrain — Small cap ($0.5B) below institutional reach
SuitabilityAggressive — MCap $0.5B<$5B
Investment implication
The F-path SELL output reflects an overall score of 3.9 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 7.9) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:3.8<4.5, DEATH_CROSS:HARD_BLOCK, 8K_SERIOUS:2.05) reinforce the read. Current asymmetry R:R is 1.57 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 7.9, Technical at 7.1, and Risk (lower is worse) at 6.4; the weakest are Growth at 3.5, Momentum at 3.8, and Insider at 4.0. The V9 engine flagged 3 failed gates, producing an asymmetric reward-to-risk of 1.57 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Upside To Analyst Target
Trip ifAnalyst target is cut below $29.00 from the current $31.45.
- P2Reasonable Forward Valuation
Trip ifForward P/E rises above 16x as earnings estimates are cut.
- P3Two Recent Earnings Misses
Trip ifEPS misses estimates in at least 2 of the next 3 quarters.
- P4Weak Cash Conversion No Moat
Trip ifFree cash flow falls below 50% of net income from the current 70%.
- P5Confirmed Downtrend
Trip ifPrice falls below the $26.51 stop level from the current $27.77.