Value
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 7.5 |
| P/S | 8.7 |
| EV/EBITDA | 6.0 |
| Fwd P/E | 8.2 |
| PEG | 7.4 |
| Analyst target | 5.0 |
- ▸Forward P/E: 14.5x
- ▸PEG: 0.93
- ▸Attractively valued
MWA · Why this verdict
Why MUELLER WATER PRODUCTS (MWA) 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 score5.7/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Mueller Water Products has a 3-of-4 earnings beat record, a Piotroski F-Score of 8/9, and trades at an attractive valuation relative to industrial peers, but momentum has softened below critical thresholds and the upside-to-risk ratio remains too thin for a new position at current prices.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Mueller Water Products beat earnings estimates in 3 of the last 4 quarters with an average positive surprise of 7.6%, and has not missed once in the trailing year, reflecting steady operational execution in water infrastructure. Earnings | The company continues to beat or meet consensus in at least 3 of the next 4 quarters as water infrastructure demand remains supported. | ↑Improving |
| CounterAn average surprise of only 7.6% and no standout beats suggest guidance is set conservatively; any unexpected cost pressure in materials or labor could flip the pattern to misses. | ||
A Piotroski F-Score of 8/9 and quality peer rankings above median indicate that Mueller Water Products maintains solid balance sheet health and financial discipline, even if free cash flow relative to net income falls short at 48%. Quality breakdown | The Piotroski F-Score stays at 7 or above through the next annual reporting cycle as liquidity and profitability metrics hold. | →Stable |
| CounterFree cash flow converting at only 48% of net income is flagged as a quality concern; if working capital deteriorates further, the Piotroski score could drop and quality metrics could compress. | ||
Mueller Water Products ranks above the median in P/E value versus peers, with an attractive forward P/E of 16.3x and a PEG of 1.07, suggesting the stock is not overpaying for growth relative to industrial machinery comparables. Peer-rank breakdown | The stock re-rates closer to the analyst consensus target of approximately $28, implying at least 8% upside from current $25.79 levels within 12 months. | →Stable |
| CounterA PEG of 1.07 is not particularly cheap in the context of a below-average growth profile, and the stock's limited 8.6% upside to target leaves little cushion for valuation compression. | ||
Mueller Water Products relies on single-source or limited-source suppliers for key components, meaning a supply disruption could halt production and create outsized revenue shortfalls relative to the company's size. Bear case | The company diversifies its supplier base so that no single-source dependency accounts for more than 30% of critical materials within 18 months. | →Stable |
| CounterWater infrastructure components often require specialized suppliers, and long-term qualified supplier relationships typically provide more reliability than the concentration label implies. | ||
Mueller Water Products beat earnings estimates in 3 of the last 4 quarters with an average positive surprise of 7.6%, and has not missed once in the trailing year, reflecting steady operational execution in water infrastructure.
↑ImprovingEarnings
- Expectation
- The company continues to beat or meet consensus in at least 3 of the next 4 quarters as water infrastructure demand remains supported.
CounterAn average surprise of only 7.6% and no standout beats suggest guidance is set conservatively; any unexpected cost pressure in materials or labor could flip the pattern to misses.
A Piotroski F-Score of 8/9 and quality peer rankings above median indicate that Mueller Water Products maintains solid balance sheet health and financial discipline, even if free cash flow relative to net income falls short at 48%.
→StableQuality breakdown
- Expectation
- The Piotroski F-Score stays at 7 or above through the next annual reporting cycle as liquidity and profitability metrics hold.
CounterFree cash flow converting at only 48% of net income is flagged as a quality concern; if working capital deteriorates further, the Piotroski score could drop and quality metrics could compress.
Mueller Water Products ranks above the median in P/E value versus peers, with an attractive forward P/E of 16.3x and a PEG of 1.07, suggesting the stock is not overpaying for growth relative to industrial machinery comparables.
→StablePeer-rank breakdown
- Expectation
- The stock re-rates closer to the analyst consensus target of approximately $28, implying at least 8% upside from current $25.79 levels within 12 months.
CounterA PEG of 1.07 is not particularly cheap in the context of a below-average growth profile, and the stock's limited 8.6% upside to target leaves little cushion for valuation compression.
Mueller Water Products relies on single-source or limited-source suppliers for key components, meaning a supply disruption could halt production and create outsized revenue shortfalls relative to the company's size.
→StableBear case
- Expectation
- The company diversifies its supplier base so that no single-source dependency accounts for more than 30% of critical materials within 18 months.
CounterWater infrastructure components often require specialized suppliers, and long-term qualified supplier relationships typically provide more reliability than the concentration label implies.
Per-dimension breakdown
Quality
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 7.2 |
| ROA | 7.1 |
| Gross margin | 3.6 |
| Op margin | 9.6 |
| Net margin | 7.5 |
| Current ratio | 8.4 |
| FCF quality | 4.6 |
| Moat | 6.4 |
| Piotroski F | 10.0 |
- ▸Strong margins: 15%
- ▸Earnings quality warning: 59% FCF/NI
- ▸Strong Piotroski F-Score: 9/9
Growth
5.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.5 |
| EPS growth | 8.1 |
Momentum
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 2.9 |
| MACD | 9.4 |
| OBV | 1.0 |
| MA position | 6.0 |
| Volume | 5.0 |
- ▸Overbought bear rally (RSI 72)
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -1.5%/30d — confirmed downtrend
Sentiment
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 7.5 |
| erm sentiment | 0.0 |
- ▸Estimates falling as sentiment proxy (-27.3%)
Insider
4.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 3.0 |
| holder change | 5.4 |
- ▸Modest insider selling — $1,642,265 (0.046% of mkt cap)
Peer rank
6.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.9 |
| quality rank | 8.1 |
| growth rank | 2.2 |
- ▸Attractive P/E vs peers
- ▸Superior ROE vs peers
Technical
1.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.1 |
| 52w position | 4.8 |
Risk (lower is worse)
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.3 |
| days to cover | 6.9 |
| volatility | 6.8 |
| put call | 0.0 |
| implied vol | 5.2 |
| beta | 7.0 |
| debt equity | 8.4 |
- ▸Elevated put/call: 5.17
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 1.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 9.7 |
| dividend safety | 7.5 |
- ▸Estimates down -27.3% (30d)
- ▸Perfect beat streak: 4Q
- ▸Earnings in 5 days
- ▸Dividend aristocrat: 1.4% yield
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:4.9>=4.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- ASYMMETRY:0.4<1.5@spot
- DEATH_CROSS:HARD_BLOCK
- EARNINGS_PROXIMITY:5d<=7d
Warning (1)
- MOMENTUM:4.9<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
0.43
Upside
+3.1%
Downside
7.2%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 72
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $3.6B<$5B
Investment implication
The F-path SELL output reflects an overall score of 5.2 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Quality at 7.2) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:0.4<1.5@spot, DEATH_CROSS:HARD_BLOCK, EARNINGS_PROXIMITY:5d<=7d) reinforce the read. Current asymmetry R:R is 0.43 — supplementary context, not the trigger for this path.
The strongest dimensions are Quality at 7.2, Value at 7.1, and Catalyst at 6.6; the weakest are Technical at 1.6, Insider at 4.3, and Sentiment at 4.5. The V9 engine flagged 3 failed gates with 1 warning, producing an asymmetric reward-to-risk of 0.43 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Consistent Earnings Execution
Trip ifEarnings miss consensus estimates by more than 5% in any 1 of the next 3 quarters.
- P2Strong Quality Piotroski Score
Trip ifPiotroski F-Score falls below 6 in the next annual reporting cycle.
- P3Attractive Peer Relative Valuation
Trip ifAnalyst consensus price target declines below $25 (falls below current price of $25.79).
- P4Single Source Supplier Concentration
Trip ifManagement discloses that a single-source supplier failure caused revenue to decline more than 5% in any quarter.