Value
6.3/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 0.6 |
| P/S | 9.9 |
| EV/EBITDA | 0.4 |
| Fwd P/E | 6.0 |
| PEG | 10.0 |
- ▸Forward P/E: 21.5x
- ▸PEG: 0.07
MATW · Why this verdict
Why Matthews International Corporat (MATW) 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 score4.4/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
At current price, the stock offers 21% modeled upside to its analyst target versus 7% downside to its stop-loss, a favorable risk/reward ratio of 2.68x. Targets | The risk/reward ratio should stay above 2.0x as the price target is maintained or raised. | →Stable |
| CounterQuality score sits below the engine's 4.0 floor, so the favorable payoff skew may reflect analyst optimism the market itself doesn't yet share. | ||
Revenue is declining sharply, down 40% YoY, a severe top-line contraction despite the engine's positive risk/reward read. Growth breakdown | Revenue growth should turn positive within a few quarters. | →Stable |
| CounterExcellent cash conversion suggests the decline may be driven by portfolio pruning or divestitures rather than a collapse in the core business. | ||
Matthews International is converting free cash flow at 824% of net income, an unusually strong cash-generation profile. Quality breakdown | The FCF-to-net-income ratio should stay well above 200% over the coming quarters. | →Stable |
| CounterAn FCF/NI ratio this high can reflect one-time working-capital or divestiture-related cash inflows rather than a sustainable trend. | ||
Short interest stands at 14% of float alongside an elevated put/call ratio of 2.00, indicating the options and short markets are positioned for further downside. Key risks | The put/call ratio should fall back toward more typical levels. | →Stable |
| CounterHigh short interest combined with a favorable risk/reward setup can also set up a short squeeze if a positive catalyst emerges. | ||
At current price, the stock offers 21% modeled upside to its analyst target versus 7% downside to its stop-loss, a favorable risk/reward ratio of 2.68x.
→StableTargets
- Expectation
- The risk/reward ratio should stay above 2.0x as the price target is maintained or raised.
CounterQuality score sits below the engine's 4.0 floor, so the favorable payoff skew may reflect analyst optimism the market itself doesn't yet share.
Revenue is declining sharply, down 40% YoY, a severe top-line contraction despite the engine's positive risk/reward read.
→StableGrowth breakdown
- Expectation
- Revenue growth should turn positive within a few quarters.
CounterExcellent cash conversion suggests the decline may be driven by portfolio pruning or divestitures rather than a collapse in the core business.
Matthews International is converting free cash flow at 824% of net income, an unusually strong cash-generation profile.
→StableQuality breakdown
- Expectation
- The FCF-to-net-income ratio should stay well above 200% over the coming quarters.
CounterAn FCF/NI ratio this high can reflect one-time working-capital or divestiture-related cash inflows rather than a sustainable trend.
Short interest stands at 14% of float alongside an elevated put/call ratio of 2.00, indicating the options and short markets are positioned for further downside.
→StableKey risks
- Expectation
- The put/call ratio should fall back toward more typical levels.
CounterHigh short interest combined with a favorable risk/reward setup can also set up a short squeeze if a positive catalyst emerges.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Matthews International screens with a favorable risk-reward setup and exceptional cash conversion, but a sharp revenue decline and elevated bearish options and short positioning keep the quality-floor exit signal in place.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
3.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.7 |
| ROA | 0.5 |
| Gross margin | 3.4 |
| Op margin | 0.2 |
| Net margin | 0.4 |
| Current ratio | 5.9 |
| FCF quality | 10.0 |
| Moat | 3.9 |
| Piotroski F | 4.4 |
- ▸Excellent cash conversion: 824% FCF/NI
- ▸No competitive moat
Growth
0.0/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 0.0 |
- ▸Declining revenue: -40%
Momentum
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 7.4 |
| OBV | 10.0 |
| MA position | 4.0 |
| Volume | 2.3 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 9.4 |
| erm sentiment | 5.0 |
- ▸Analyst upside: 45%
Insider
7.5/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
2.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.3 |
| quality rank | 2.3 |
| growth rank | 0.0 |
Technical
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 5.8 |
| support resistance | 4.7 |
| 52w position | 7.1 |
Risk (lower is worse)
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 3.0 |
| days to cover | 0.0 |
| volatility | 3.8 |
| put call | 10.0 |
| implied vol | 3.3 |
| beta | 6.7 |
| debt equity | 4.5 |
- ▸High IV: 60%
Catalyst
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| dividend safety | 5.5 |
- ▸Strong earnings: 3B/1M
- ▸Dividend: 3.8%
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (7)
- MOMENTUM:5.8>=5.5
- ASYMMETRY:3.3>=1.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:28d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
3.33
Upside
+23.2%
Downside
7.0%
Sizing output
AVOID
SetupRange Bound — RSI 47 mid-range, Bollinger mid-band
EdgeCatalyst-Driven — Earnings in 28d with 3/4 beat streak
SuitabilityAggressive — MCap $0.8B<$5B
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Insider at 7.5 could not lift the engine output above the verdict floor.
The strongest dimensions are Insider at 7.5, Sentiment at 6.4, and Value at 6.3; the weakest are Growth at 0.0, Peer rank at 2.6, and Quality at 3.3. The V9 engine cleared all gates with 1 warning, producing an asymmetric reward-to-risk of 3.33 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Favorable Risk Reward
Trip ifRisk-reward ratio falls below 1.0, reversing from the current 2.68.
- P2Sharp Revenue Decline
Trip ifRevenue growth rises above 0% YoY, reversing the current -40% decline.
- P3Exceptional Cash Conversion
Trip ifFCF-to-net-income ratio falls below 200%, reversing from the current 824%.
- P4Elevated Bearish Positioning
Trip ifPut/call ratio falls below 1.0 from the current 2.00.