Value
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 3.3 |
| P/S | 7.9 |
| EV/EBITDA | 1.6 |
| Fwd P/E | 6.5 |
| PEG | 4.8 |
| Analyst target | 4.0 |
- ▸Forward P/E: 19.9x
- ▸PEG: 1.69
MMSI · Why this verdict
Why Merit Medical Systems (MMSI) 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 score5.4/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Merit Medical Systems combines a perfect four-quarter earnings beat streak averaging nearly 13% upside, a maximum Piotroski financial health score of 9 out of 9, and free-cash-flow conversion at 128% of net income — but a confirmed death cross with the 200-day moving average declining at roughly 4% per month represents a hard technical block that makes the setup best suited to patient holders rather than new buyers.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company has beaten consensus earnings estimates in all four most recent quarters by an average of nearly 13%, while free cash flow converts at 128% of net income — a combination of delivery reliability and cash quality that is rare and supports confidence in the reported earnings. Earnings | The beat streak should continue, with EPS beating consensus in at least 3 of the next 4 quarters and average surprise remaining above 8%. | ↓Deteriorating |
| CounterA four-quarter beat streak with strong averages can set a high market expectation baseline, making any single miss disproportionately punitive; cash conversion above 100% may also reflect favorable working-capital timing rather than a structural outperformance that will persist. | ||
A confirmed death cross is in place, the 200-day moving average is declining at roughly 4% per month, and a hard technical block has been triggered — conditions that typically require resolution before new buyers can achieve reliable entry timing. Engine gate (failed) | The 200-day moving average should stop declining and price should reclaim that level within 12 months for the technical obstruction to resolve. | →Stable |
| CounterRSI stands at 58 and MACD is improving — early recovery signals consistent with the setup; the longer-term moving average may be lagging a genuine momentum inflection that is already underway in shorter-term data. | ||
A Piotroski financial strength score of 9 out of 9 — the highest possible reading — signals that the business clears every standard financial health criterion simultaneously, reducing the risk of distress or forced dilution at inopportune times. Quality breakdown | The Piotroski score should sustain above 7 for at least the next 4 quarters, confirming that financial health is structural rather than a point-in-time reading. | →Stable |
| CounterPiotroski scores reflect past financial statements and may not anticipate forward balance-sheet pressures from growth investment, potential acquisitions, or rising debt service if the company increases leverage. | ||
A strong growth profile across both revenue and earnings, at a forward P/E of 15.2 times and a PEG of 1.42, suggests the current multiple is reasonable relative to the growth trajectory — and analyst consensus implies approximately 34% upside to the target price. Bull case | Revenue growth should sustain above 5% year-over-year for the next 4 quarters, and forward earnings estimates should hold or rise, preserving the multiple-support argument. | →Stable |
| CounterVolume distribution (falling OBV) indicates institutional selling into the current price level, which can suppress the multiple even when underlying fundamentals are sound — suggesting the market may not yet accept the growth premium embedded in analyst targets. | ||
The company has beaten consensus earnings estimates in all four most recent quarters by an average of nearly 13%, while free cash flow converts at 128% of net income — a combination of delivery reliability and cash quality that is rare and supports confidence in the reported earnings.
↓DeterioratingEarnings
- Expectation
- The beat streak should continue, with EPS beating consensus in at least 3 of the next 4 quarters and average surprise remaining above 8%.
CounterA four-quarter beat streak with strong averages can set a high market expectation baseline, making any single miss disproportionately punitive; cash conversion above 100% may also reflect favorable working-capital timing rather than a structural outperformance that will persist.
A confirmed death cross is in place, the 200-day moving average is declining at roughly 4% per month, and a hard technical block has been triggered — conditions that typically require resolution before new buyers can achieve reliable entry timing.
→StableEngine gate (failed)
- Expectation
- The 200-day moving average should stop declining and price should reclaim that level within 12 months for the technical obstruction to resolve.
CounterRSI stands at 58 and MACD is improving — early recovery signals consistent with the setup; the longer-term moving average may be lagging a genuine momentum inflection that is already underway in shorter-term data.
A Piotroski financial strength score of 9 out of 9 — the highest possible reading — signals that the business clears every standard financial health criterion simultaneously, reducing the risk of distress or forced dilution at inopportune times.
→StableQuality breakdown
- Expectation
- The Piotroski score should sustain above 7 for at least the next 4 quarters, confirming that financial health is structural rather than a point-in-time reading.
CounterPiotroski scores reflect past financial statements and may not anticipate forward balance-sheet pressures from growth investment, potential acquisitions, or rising debt service if the company increases leverage.
A strong growth profile across both revenue and earnings, at a forward P/E of 15.2 times and a PEG of 1.42, suggests the current multiple is reasonable relative to the growth trajectory — and analyst consensus implies approximately 34% upside to the target price.
→StableBull case
- Expectation
- Revenue growth should sustain above 5% year-over-year for the next 4 quarters, and forward earnings estimates should hold or rise, preserving the multiple-support argument.
CounterVolume distribution (falling OBV) indicates institutional selling into the current price level, which can suppress the multiple even when underlying fundamentals are sound — suggesting the market may not yet accept the growth premium embedded in analyst targets.
Per-dimension breakdown
Quality
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.1 |
| ROA | 3.3 |
| Gross margin | 5.9 |
| Op margin | 5.8 |
| Net margin | 4.6 |
| Current ratio | 8.8 |
| FCF quality | 8.0 |
| Moat | 5.8 |
| Piotroski F | 10.0 |
- ▸Strong Piotroski F-Score: 9/9
Growth
5.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.9 |
| EPS growth | 6.1 |
Momentum
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.1 |
| Price target | 6.2 |
| erm sentiment | 5.0 |
Insider
3.8/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 5.0 |
- ▸Modest insider selling — $2,501,525 (0.045% of mkt cap)
Peer rank
5.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.2 |
| quality rank | 7.0 |
| growth rank | 5.4 |
Technical
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.2 |
| support resistance | 1.5 |
| 52w position | 9.6 |
Risk (lower is worse)
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.7 |
| days to cover | 4.2 |
| volatility | 6.5 |
| put call | 10.0 |
| implied vol | 6.2 |
| beta | 10.0 |
| debt equity | 8.0 |
Catalyst
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 9.6 |
| news activity | 5.0 |
- ▸Perfect beat streak: 4Q
- ▸Earnings today
How the verdict was assembled
Engine trigger
Earnings today. Wait until post-earnings.
Engine technical detail
verdict_path:
L3:NEWS_BLOCK|ENTRY_STICKY:WITHIN_BANDPassed (6)
- MOMENTUM:5.0>=4.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:-0.6=NEGATIVE
- EARNINGS_PROXIMITY:0d<=7d
Warning (1)
- MOMENTUM:5.0<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
-0.61
Upside
-6.0%
Downside
9.9%
Sizing output
STARTER
SetupBreakout — Golden cross, above all MAs, RSI 67, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
A recent news event triggered an L3 news-block on the verdict path. Trigger: Earnings today. Wait until post-earnings. The 10-dimension scores remain Risk (lower is worse) at 7.2 (strongest), but ASYMMETRY:-0.6=NEGATIVE also fails — the news block is the proximate trigger, not the sole driver.
The strongest dimensions are Risk (lower is worse) at 7.2, Catalyst at 6.9, and Sentiment at 6.2; the weakest are Insider at 3.8, Technical at 4.4, and Value at 4.8. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of -0.61 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 Execution Strong Cash Conversion
Trip ifEPS surprise falls below 0% in 2 consecutive quarters, ending the perfect beat streak.
- P2Confirmed Downtrend Blocks Near Term Entry
Trip ifThe 200-day moving-average slope rises above 0% and price holds above the 200-day moving average for 4 consecutive weeks, confirming the downtrend has reversed.
- P3Maximum Financial Health Score
Trip ifPiotroski financial strength score falls below 7 for 2 consecutive reporting periods, indicating meaningful deterioration in balance-sheet health.
- P4Growth Profile Supports Current Multiple
Trip ifRevenue growth falls below 5% year-over-year for 2 consecutive quarters, compressing the growth-to-multiple justification.