Value
3.8/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 2.9 |
| P/S | 8.4 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 5.3 |
| PEG | 2.2 |
- ▸Forward P/E: 23.8x
- ▸PEG: 5.51
LQDT · Why this verdict
Why Liquidity Services (LQDT) 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 score5.7/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Liquidity Services is a high-quality online marketplace operator with a perfect four-quarter earnings-beat streak and excellent cash conversion. The stock trades at a forward P/E of 24.4x, 0.3% from its 52-week high and 3.3% above the analyst target, leaving little room for further gains.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Execution is consistent: the company beat estimates in all four of the last four quarters, with an average surprise of about 25.6% and the latest EPS of 0.45 against a 0.35 estimate. Earnings | EPS should continue to meet or beat estimates at the November 19 report and beyond. | →Stable |
| CounterAfter a long beat streak, expectations rise and estimates may be set too high to keep beating, so even a small miss could hit a stock priced near its high. | ||
Business quality is solid: free cash flow is 246% of net income and the Piotroski F-Score is 9/9. Quality breakdown | Free cash flow conversion should stay above 100% of net income over the next 12 months. | →Stable |
| CounterCash conversion above 200% can reflect timing effects in working capital that reverse, and margin scores are only mid-range. | ||
The stock at $44.85 is 3.3% above the $43.35 analyst target and only 0.3% from its 52-week high, with 8.8% downside to the stop. Upside pct | Analyst targets need to rise above the current price for new upside to open up; otherwise the stock should consolidate. | →Stable |
| CounterTargets typically lag after a strong beat streak, and a breakout with a golden cross and bullish MACD can keep the price rising past them. | ||
Valuation is rich relative to growth: the forward P/E is 24.4x and the PEG ratio is 5.01. Valuation breakdown | Earnings growth must stay well above 20% for the multiple to be justified at current prices. | →Stable |
| CounterA perfect beat streak and a 9/9 Piotroski F-Score justify a premium multiple, and earnings growth scored 9.8 out of 10. | ||
Technical momentum is positive: the stock is above its 200-day average with rising on-balance volume, a golden cross, and a momentum score of 6.8 out of 10. Momentum breakdown | The price should hold above its 200-day average as volume accumulation continues. | →Stable |
| CounterBeing at a 52-week high with weak volume (score 1.3) makes a breakout prone to failure. | ||
Execution is consistent: the company beat estimates in all four of the last four quarters, with an average surprise of about 25.6% and the latest EPS of 0.45 against a 0.35 estimate.
→StableEarnings
- Expectation
- EPS should continue to meet or beat estimates at the November 19 report and beyond.
CounterAfter a long beat streak, expectations rise and estimates may be set too high to keep beating, so even a small miss could hit a stock priced near its high.
Business quality is solid: free cash flow is 246% of net income and the Piotroski F-Score is 9/9.
→StableQuality breakdown
- Expectation
- Free cash flow conversion should stay above 100% of net income over the next 12 months.
CounterCash conversion above 200% can reflect timing effects in working capital that reverse, and margin scores are only mid-range.
The stock at $44.85 is 3.3% above the $43.35 analyst target and only 0.3% from its 52-week high, with 8.8% downside to the stop.
→StableUpside pct
- Expectation
- Analyst targets need to rise above the current price for new upside to open up; otherwise the stock should consolidate.
CounterTargets typically lag after a strong beat streak, and a breakout with a golden cross and bullish MACD can keep the price rising past them.
Valuation is rich relative to growth: the forward P/E is 24.4x and the PEG ratio is 5.01.
→StableValuation breakdown
- Expectation
- Earnings growth must stay well above 20% for the multiple to be justified at current prices.
CounterA perfect beat streak and a 9/9 Piotroski F-Score justify a premium multiple, and earnings growth scored 9.8 out of 10.
Technical momentum is positive: the stock is above its 200-day average with rising on-balance volume, a golden cross, and a momentum score of 6.8 out of 10.
→StableMomentum breakdown
- Expectation
- The price should hold above its 200-day average as volume accumulation continues.
CounterBeing at a 52-week high with weak volume (score 1.3) makes a breakout prone to failure.
Per-dimension breakdown
Quality
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.0 |
| ROA | 4.6 |
| Gross margin | 5.5 |
| Op margin | 4.3 |
| Net margin | 3.4 |
| Current ratio | 5.7 |
| FCF quality | 10.0 |
| Moat | 7.0 |
| Piotroski F | 10.0 |
- ▸Excellent cash conversion: 246% FCF/NI
- ▸Strong Piotroski F-Score: 9/9
Growth
7.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.5 |
| EPS growth | 9.8 |
Momentum
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 7.6 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 7.1 |
| erm sentiment | 5.0 |
Insider
6.6/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 7.8 |
| notable moves | 7.0 |
- ▸Insider selling (low materiality) — $87,959 (0.006% of mkt cap)
- ▸Institutions accumulating
Peer rank
4.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.7 |
| quality rank | 5.2 |
| growth rank | 2.5 |
Technical
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.7 |
| support resistance | 2.8 |
| 52w position | 9.4 |
Risk (lower is worse)
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.3 |
| days to cover | 6.5 |
| volatility | 6.9 |
| put call | 10.0 |
| implied vol | 2.9 |
| max pain risk | 3.0 |
| beta | 6.8 |
| debt equity | 9.8 |
- ▸High IV: 63%
- ▸Above max pain $40
Catalyst
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:4.6>=4.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:20d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.3=NEGATIVE
Warning (1)
- MOMENTUM:4.6<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
-0.32
Upside
-2.6%
Downside
8.2%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 60, MACD bullish
EdgeCatalyst-Driven — Earnings in 20d with 4/4 beat streak
SuitabilityAggressive — MCap $1.4B<$5B
Investment implication
The F-path SELL output reflects an overall score of 4.2 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Catalyst at 7.5) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.3=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.32 — supplementary context, not the trigger for this path.
The strongest dimensions are Catalyst at 7.5, Growth at 7.2, and Risk (lower is worse) at 6.7; the weakest are Value at 3.8, Peer rank at 4.5, and Momentum at 4.6. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.32 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Earnings Beat Streak
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P2Excellent Cash Conversion
Trip ifFree cash flow to net income falls below 100% from the current 246%.
- P3Price Above Analyst Target
Trip ifUpside to the analyst target rises above 10% (price below target) from the current -3.3%.
- P4Rich Valuation For Growth
Trip ifForward P/E exceeds 30x from the current 24.4x without matching earnings growth.
- P5Breakout Momentum
Trip ifPrice falls below the $42.81 stop level, more than 4% below the current $44.85.