Value
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 3.0 |
| P/S | 7.4 |
| EV/EBITDA | 2.3 |
| Fwd P/E | 7.8 |
| PEG | 10.0 |
| Analyst target | 5.0 |
- ▸Forward P/E: 15.7x
- ▸PEG: 0.07
MITK · Why this verdict
Why Mitek Systems (MITK) is rated BUY WAIT
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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VerdictBUY WAIT
Overall score6.7/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Mitek Systems is a high-quality software company (wide moat, Piotroski F-Score 9/9, 225% cash conversion) with a perfect four-quarter earnings-beat streak and a confirmed breakout. The price is only 3.2% below the analyst target against 15.0% downside, so most near-term upside looks captured.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Quality is high at 7.6 out of 10: free cash flow is 225% of net income, the economic moat is wide, the Rule of 40 score is 44 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 of deferred revenue, and return on equity scores only 3.1. | ||
Execution is consistent: the company beat estimates in all four of the last four quarters, with an average surprise of about 26.6% and the latest EPS of 0.34 against a 0.28 estimate. Earnings | EPS should keep meeting or beating estimates at the December 10 report. | →Stable |
| CounterThe company missed three times in 2024, so the beat record is recent and could fade as estimates rise. | ||
Momentum is strong: a golden cross, the price above its 200-day average with rising on-balance volume, and a momentum score of 7.5 out of 10. Momentum breakdown | The price should hold above its breakout level and 200-day average over the coming quarters. | ↑Improving |
| CounterBollinger and support-resistance scores are near zero, so the price is stretched near the top of its range and prone to a pullback. | ||
The price of $18.64 is only 3.2% below the $19.23 analyst target, against 15.0% downside to the stop, a reward-to-risk of 0.21. Upside pct | Upside should stay in low single digits unless analysts raise their targets after the next beat. | ↓Deteriorating |
| CounterA streak of beats could trigger target upgrades, and the data labels growth as outpacing valuation (PEG 0.07). | ||
The business is concentrated in one product line, mobile imaging technology and software, which the data flags as a high-severity risk, alongside 10% short interest. Bear case | The concentration should persist, keeping results tied to demand for mobile imaging and deposit software. | ↓Deteriorating |
| CounterA specialized product line with a wide moat can be a strength, and a Rule of 40 score of 44 shows the business is performing well. | ||
Quality is high at 7.6 out of 10: free cash flow is 225% of net income, the economic moat is wide, the Rule of 40 score is 44 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 of deferred revenue, and return on equity scores only 3.1.
Execution is consistent: the company beat estimates in all four of the last four quarters, with an average surprise of about 26.6% and the latest EPS of 0.34 against a 0.28 estimate.
→StableEarnings
- Expectation
- EPS should keep meeting or beating estimates at the December 10 report.
CounterThe company missed three times in 2024, so the beat record is recent and could fade as estimates rise.
Momentum is strong: a golden cross, the price above its 200-day average with rising on-balance volume, and a momentum score of 7.5 out of 10.
↑ImprovingMomentum breakdown
- Expectation
- The price should hold above its breakout level and 200-day average over the coming quarters.
CounterBollinger and support-resistance scores are near zero, so the price is stretched near the top of its range and prone to a pullback.
The price of $18.64 is only 3.2% below the $19.23 analyst target, against 15.0% downside to the stop, a reward-to-risk of 0.21.
↓DeterioratingUpside pct
- Expectation
- Upside should stay in low single digits unless analysts raise their targets after the next beat.
CounterA streak of beats could trigger target upgrades, and the data labels growth as outpacing valuation (PEG 0.07).
The business is concentrated in one product line, mobile imaging technology and software, which the data flags as a high-severity risk, alongside 10% short interest.
↓DeterioratingBear case
- Expectation
- The concentration should persist, keeping results tied to demand for mobile imaging and deposit software.
CounterA specialized product line with a wide moat can be a strength, and a Rule of 40 score of 44 shows the business is performing well.
Per-dimension breakdown
Quality
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.1 |
| ROA | 3.7 |
| Gross margin | 10.0 |
| Op margin | 8.5 |
| Net margin | 5.7 |
| Current ratio | 9.2 |
| FCF quality | 10.0 |
| Moat | 7.9 |
| Rule of 40 | 7.5 |
| Piotroski F | 10.0 |
- ▸Excellent cash conversion: 225% FCF/NI
- ▸Wide economic moat
- ▸Rule of 40: 44 (pass)
- ▸Strong Piotroski F-Score: 9/9
Growth
8.6/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 7.1 |
| EPS growth | 10.0 |
Momentum
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 2.7 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.1 |
| Price target | 7.8 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (4.0) — signal dampened
- ▸Analyst upside: 21%
Insider
5.8/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 6.5 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
5.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.5 |
| quality rank | 5.0 |
| growth rank | 6.2 |
Technical
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.5 |
| support resistance | 1.5 |
| 52w position | 7.7 |
Risk (lower is worse)
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.2 |
| days to cover | 3.7 |
| volatility | 0.6 |
| put call | 7.8 |
| implied vol | 2.4 |
| max pain risk | 3.0 |
| beta | 7.4 |
| debt equity | 9.1 |
- ▸High IV: 66%
- ▸Above max pain $8
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
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
Growth is outpacing valuation and the technical setup has confirmed a breakout above resistance (PEG 0.07, quality 7.6/10, growth 8.6/10).
Engine technical detail
verdict_path:
L4:PATH_C2_GARP|ENTRY_STICKY:WITHIN_BANDPassed (7)
- MOMENTUM:7.4>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:42d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.2<1.5@spot
Warning (0)
none
Reward-to-Risk
0.20
Upside
+3.1%
Downside
15.0%
Sizing output
STARTER
SetupBreakout — Golden cross, above all MAs, RSI 59, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $0.8B<$5B
Investment implication
The C-path quality+growth combination triggered the STRONG_BUY_WAIT verdict: quality 7.6 and growth 8.6 both clear their thresholds, with asymmetric R:R of 0.20 supporting the read.
The strongest dimensions are Growth at 8.6, Quality at 7.6, and Catalyst at 7.5; the weakest are Technical at 3.6, Risk (lower is worse) at 4.9, and Peer rank at 5.3. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of 0.20 and an engine sizing output of STARTER.
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.
- P2High Quality Cash Generation
Trip ifFree cash flow to net income falls below 100% from the current 225%.
- P3Breakout Momentum
Trip ifPrice falls below the $14.94 stop level, more than 20% below the current $18.64.
- P4Thin Upside To Target
Trip ifUpside to the analyst target rises above 15% from the current 3.2%.
- P5Single Product Concentration
Trip ifThe number of high-severity concentration risks drops to 0 from the current 1.