Value
8.8/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 8.1 |
| P/S | 8.7 |
| EV/EBITDA | 6.1 |
| Fwd P/E | 9.0 |
| PEG | 10.0 |
- ▸Forward P/E: 12.0x
- ▸PEG: 0.26
- ▸Attractively valued
MLI · Why this verdict
Why Mueller Industries (MLI) 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 score6.7/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Mueller Industries is a high-quality metal fabricator (26% ROE, 17% margins, wide moat, 32% YoY growth) trading at a forward P/E of 11.6x after a sharp pullback. The price is 22.5% below the analyst target, but the stock is oversold in a weak trend and has just missed earnings.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Profitability is high on the data: a 26% return on equity, 17% margins, a wide economic moat and a Piotroski F-Score of 7/9, giving a quality score of 7.3 out of 10. Quality breakdown | Return on equity should stay above 20% and margins should hold near current levels over the next 12 months. | →Stable |
| CounterFree cash flow is only 62% of net income, which is an earnings-quality warning for a business with heavy working capital needs. | ||
Growth is strong at 32% YoY, ranking the company well within its industry peers on growth. Growth breakdown | Revenue should keep growing above 10% YoY over the next 12 months. | →Stable |
| CounterEarnings growth scores only 3.3 out of 10, so revenue growth is not converting to profit growth, and metals demand is cyclical. | ||
Earnings are inconsistent: 2 beats and 2 misses in the last four quarters, with the latest EPS of 1.00 missing the 1.15 estimate by 13%. Earnings | EPS should meet or beat estimates at the next report on February 2, 2027. | ↓Deteriorating |
| CounterBefore the last four quarters the company beat estimates in six of its prior seven reports, so the recent misses may be temporary. | ||
The stock is attractively valued at a forward P/E of 11.6x, and the price of $54.11 is 22.5% below the $66.30 analyst target against 6.9% downside to the stop. Upside pct | The stock should close part of the gap to the analyst target if earnings recover. | →Stable |
| CounterCoverage is light, and the target may be cut after the recent miss, so the gap may close through lower targets. | ||
Momentum is weak: RSI is 20 (capitulation risk), the price is below its 200-day average with falling on-balance volume, and insiders have sold about $29.5M, 0.250% of market cap. Momentum breakdown | The price should stabilize and reclaim its 200-day average, which is still rising 0.9% over 30 days, for the pullback to end. | ↑Improving |
| CounterAn RSI of 20 within a still-rising long-term average is a typical pullback in an uptrend, and institutions are accumulating. | ||
Profitability is high on the data: a 26% return on equity, 17% margins, a wide economic moat and a Piotroski F-Score of 7/9, giving a quality score of 7.3 out of 10.
→StableQuality breakdown
- Expectation
- Return on equity should stay above 20% and margins should hold near current levels over the next 12 months.
CounterFree cash flow is only 62% of net income, which is an earnings-quality warning for a business with heavy working capital needs.
Growth is strong at 32% YoY, ranking the company well within its industry peers on growth.
→StableGrowth breakdown
- Expectation
- Revenue should keep growing above 10% YoY over the next 12 months.
CounterEarnings growth scores only 3.3 out of 10, so revenue growth is not converting to profit growth, and metals demand is cyclical.
Earnings are inconsistent: 2 beats and 2 misses in the last four quarters, with the latest EPS of 1.00 missing the 1.15 estimate by 13%.
↓DeterioratingEarnings
- Expectation
- EPS should meet or beat estimates at the next report on February 2, 2027.
CounterBefore the last four quarters the company beat estimates in six of its prior seven reports, so the recent misses may be temporary.
The stock is attractively valued at a forward P/E of 11.6x, and the price of $54.11 is 22.5% below the $66.30 analyst target against 6.9% downside to the stop.
→StableUpside pct
- Expectation
- The stock should close part of the gap to the analyst target if earnings recover.
CounterCoverage is light, and the target may be cut after the recent miss, so the gap may close through lower targets.
Momentum is weak: RSI is 20 (capitulation risk), the price is below its 200-day average with falling on-balance volume, and insiders have sold about $29.5M, 0.250% of market cap.
↑ImprovingMomentum breakdown
- Expectation
- The price should stabilize and reclaim its 200-day average, which is still rising 0.9% over 30 days, for the pullback to end.
CounterAn RSI of 20 within a still-rising long-term average is a typical pullback in an uptrend, and institutions are accumulating.
Per-dimension breakdown
Quality
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 8.8 |
| ROA | 10.0 |
| Gross margin | 1.5 |
| Op margin | 7.8 |
| Net margin | 8.6 |
| Current ratio | 8.6 |
| FCF quality | 4.8 |
| Moat | 7.5 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 26%
- ▸Strong margins: 17%
- ▸Earnings quality warning: 62% FCF/NI
- ▸Wide economic moat
Growth
6.7/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 3.3 |
- ▸Strong growth: 32% YoY
Momentum
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 0.0 |
| OBV | 10.0 |
| MA position | 2.2 |
| Volume | 2.5 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA but MA still rising (+0.5%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.4 |
| Price target | 9.2 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (2.0) — signal dampened
- ▸Analyst upside: 40%
Insider
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 2.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Notable insider selling — $29,524,958 (0.243% of mkt cap)
- ▸Institutions accumulating
Peer rank
7.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.4 |
| quality rank | 7.9 |
| growth rank | 7.8 |
Technical
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 7.5 |
| support resistance | 8.0 |
| 52w position | 5.7 |
Risk (lower is worse)
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.8 |
| days to cover | 7.9 |
| volatility | 4.5 |
| put call | 10.0 |
| implied vol | 7.4 |
| max pain risk | 3.0 |
| beta | 6.6 |
| debt equity | 10.0 |
- ▸Above max pain $50
Catalyst
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 6.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 2.0 |
| dividend safety | 8.5 |
- ▸Earnings concerns: 2B/2M
- ▸Dividend aristocrat: 1.3% yield
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more. | News modifier -1 (HOLD_IF_HOLDING → SELL_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_F_HOLD|L3:NEWS_MOD=-1Passed (6)
- ASYMMETRY:3.0>=1.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:94d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- MOMENTUM:3.6<4.5
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
2.97
Upside
+18.9%
Downside
6.4%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: ASYMMETRY:3.0>=1.5. Top dim: Value at 8.8; weakest: Momentum at 3.6. No conviction either direction.
The strongest dimensions are Value at 8.8, Quality at 7.3, and Risk (lower is worse) at 7.3; the weakest are Momentum at 3.6, Catalyst at 5.0, and Insider at 5.5. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 2.97 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1High Returns Wide Moat
Trip ifReturn on equity falls below 15% from the current 26%.
- P2Strong Revenue Growth
Trip ifRevenue growth falls below 10% YoY from the current 32%.
- P3Recent Earnings Misses
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P4Attractive Valuation Upside
Trip ifUpside to the analyst target falls below 10% from the current 22.5%.
- P5Oversold Weak Momentum
Trip ifPrice falls below the $52.04 stop level, more than 3% below the current $54.11.