Value
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 3.7 |
| P/S | 9.3 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 6.9 |
| PEG | 10.0 |
| Analyst target | 5.0 |
- ▸Forward P/E: 18.4x
- ▸PEG: 0.21
LYTS · Why this verdict
Why LSI Industries (LYTS) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score5.3/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
LSI Industries has beaten EPS estimates in all 4 of its last reported quarters, with an average surprise of about 26.7%. Earnings | The beat streak should continue at the next earnings print. | →Stable |
| CounterQuality notes flag an earnings-quality red flag on free cash flow, suggesting the reported EPS beats may not be backed by matching cash generation. | ||
Free cash flow is running at -52% of net income, a red flag suggesting reported earnings are not converting into cash. Quality breakdown | The FCF-to-net-income ratio should turn positive within the next few quarters. | →Stable |
| CounterThe company's strong 4-of-4 beat streak suggests underlying operating execution remains intact despite the FCF timing mismatch. | ||
Insiders have sold a net $6.2 million over the past 90 days, equal to 0.662% of market cap, an extreme reading per the engine's insider check. Insider | Insider selling as a percentage of market cap should fall back toward more typical levels. | →Stable |
| CounterThe absolute dollar amount is modest relative to the company's overall market cap, and may reflect routine diversification rather than a negative signal. | ||
The stock is trading essentially at its analyst price target, leaving only 0.8% modeled upside against 7% downside. Bear case | Analyst price targets should be raised such that modeled upside expands past 15%. | →Stable |
| CounterConsistent dividend income may still make the stock attractive to income-oriented investors even without near-term price appreciation. | ||
Momentum has weakened to a reading of 3.7, below the engine's 4.5 threshold, and on-balance volume is falling, even though price remains above its 200-day moving average. Engine gate (failed) | Momentum score should recover above the engine's 4.5 threshold. | →Stable |
| CounterPrice holding above the 200-day moving average suggests the broader uptrend structure remains intact despite short-term momentum softness. | ||
LSI Industries has beaten EPS estimates in all 4 of its last reported quarters, with an average surprise of about 26.7%.
→StableEarnings
- Expectation
- The beat streak should continue at the next earnings print.
CounterQuality notes flag an earnings-quality red flag on free cash flow, suggesting the reported EPS beats may not be backed by matching cash generation.
Free cash flow is running at -52% of net income, a red flag suggesting reported earnings are not converting into cash.
→StableQuality breakdown
- Expectation
- The FCF-to-net-income ratio should turn positive within the next few quarters.
CounterThe company's strong 4-of-4 beat streak suggests underlying operating execution remains intact despite the FCF timing mismatch.
Insiders have sold a net $6.2 million over the past 90 days, equal to 0.662% of market cap, an extreme reading per the engine's insider check.
→StableInsider
- Expectation
- Insider selling as a percentage of market cap should fall back toward more typical levels.
CounterThe absolute dollar amount is modest relative to the company's overall market cap, and may reflect routine diversification rather than a negative signal.
The stock is trading essentially at its analyst price target, leaving only 0.8% modeled upside against 7% downside.
→StableBear case
- Expectation
- Analyst price targets should be raised such that modeled upside expands past 15%.
CounterConsistent dividend income may still make the stock attractive to income-oriented investors even without near-term price appreciation.
Momentum has weakened to a reading of 3.7, below the engine's 4.5 threshold, and on-balance volume is falling, even though price remains above its 200-day moving average.
→StableEngine gate (failed)
- Expectation
- Momentum score should recover above the engine's 4.5 threshold.
CounterPrice holding above the 200-day moving average suggests the broader uptrend structure remains intact despite short-term momentum softness.
TrendMatrix Research · core thesis
Engine thesis — one sentence
LSI Industries has a perfect 4-quarter EPS beat streak, but a negative free-cash-flow-to-earnings ratio, extreme insider selling, a valuation already at its price target, and weakening momentum all argue for caution despite the headline beat record.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
3.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.8 |
| ROA | 2.6 |
| Gross margin | 1.1 |
| Op margin | 1.1 |
| Net margin | 2.0 |
| Current ratio | 5.4 |
| FCF quality | 0.0 |
| Moat | 4.9 |
| Piotroski F | 6.7 |
- ▸Earnings quality RED FLAG: -52% FCF/NI
- ▸No competitive moat
- ▸Quality concerns
Growth
8.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.9 |
| EPS growth | 10.0 |
Momentum
2.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 6.0 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 7.9 |
| erm sentiment | 5.9 |
- ▸Analyst upside: 22%
Insider
4.7/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 2.0 |
| insider conviction | 2.0 |
| holder change | 10.0 |
- ▸Heavy insider selling — $6,220,368 (0.660% of mkt cap)
- ▸Institutions accumulating
Peer rank
4.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.6 |
| quality rank | 3.8 |
| growth rank | 3.4 |
Technical
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.1 |
| support resistance | 7.3 |
| 52w position | 8.1 |
| gap | 6.0 |
Risk (lower is worse)
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.4 |
| days to cover | 7.6 |
| volatility | 1.8 |
| put call | 5.5 |
| implied vol | 2.7 |
| max pain risk | 3.0 |
| beta | 9.8 |
| debt equity | 5.7 |
- ▸High IV: 64%
- ▸Above max pain $15
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 6.5 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 5.5 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (5)
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:44d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:2.5<4.5
- ASYMMETRY:0.5<1.5@spot
- INSIDER:0.66%=EXTREME
Warning (0)
none
Reward-to-Risk
0.46
Upside
+3.9%
Downside
8.6%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $0.9B<$5B
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Growth at 8.0 could not lift the engine output above the verdict floor. Failed gate signal: MOMENTUM:2.5<4.5.
The strongest dimensions are Growth at 8.0, Technical at 7.4, and Catalyst at 7.4; the weakest are Momentum at 2.5, Quality at 3.0, and Peer rank at 4.1. The V9 engine flagged 3 failed gates, producing an asymmetric reward-to-risk of 0.46 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Earnings Beat Streak
Trip ifEPS surprise falls below 0% (a miss) at the next earnings print.
- P2Fcf Earnings Quality Flag
Trip ifFCF-to-net-income ratio rises above 0% from the current -52%.
- P3Extreme Insider Selling
Trip ifInsider selling as a percentage of market cap falls below 0.3% from the current 0.662%.
- P4Valuation Ceiling
Trip ifAnalyst 12-month upside rises above 15% from the current 0.8%.
- P5Momentum Breakdown
Trip ifMomentum score rises above 4.5, reversing the current reading of 3.7.