Value
6.4/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 2.1 |
| P/S | 7.8 |
| EV/EBITDA | 1.9 |
| Fwd P/E | 6.1 |
| PEG | 10.0 |
- ▸Forward P/E: 21.0x
- ▸PEG: 0.12
NRC · Why this verdict
Why NRC Health (NRC) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score6.2/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
NRC shows excellent quality metrics, with return on equity near 42% and free-cash-flow-to-net-income conversion near 218%, alongside a strong Piotroski F-Score of 7 out of 9. Quality breakdown | Return on equity should remain above 30% and cash conversion should stay above 150% over the next 12 months. | →Stable |
| CounterA cash-conversion ratio above 200% is unusually high and may reflect a one-time working-capital benefit rather than a sustainable conversion rate. | ||
NRC has already reached its analyst price target and shows a negative modeled asymmetry ratio of -0.85, indicating more downside than upside is assessed from current levels. Reward-to-risk math | Analyst targets should be raised, or price should pull back to restore a positive risk/reward setup, over the next 12 months. | →Stable |
| CounterReaching a price target while quality and momentum scores remain solid can precede target increases rather than marking a ceiling. | ||
NRC shows an overbought technical condition with RSI at 78, alongside rising volume accumulation and price above its 200-day moving average. Momentum breakdown | RSI should cool from 78 toward the 50-60 range without a sharp price reversal over the next few months, while the longer uptrend holds over 12 months. | →Stable |
| CounterOverbought readings in strong uptrends can persist for extended periods without triggering a reversal, especially when volume accumulation confirms continued buying interest. | ||
NRC's last four quarters split evenly between beats and misses, but the two misses were unusually large, both exceeding a 70% negative surprise. Last 4 quarters | Surprise magnitude on any future miss should narrow well below 70%, and the beat rate should improve, over the next 12 months. | →Stable |
| CounterSuch extreme surprise percentages often reflect small absolute EPS bases, where minor dollar misses translate into huge percentage swings, rather than genuine operational deterioration. | ||
NRC shows excellent quality metrics, with return on equity near 42% and free-cash-flow-to-net-income conversion near 218%, alongside a strong Piotroski F-Score of 7 out of 9.
→StableQuality breakdown
- Expectation
- Return on equity should remain above 30% and cash conversion should stay above 150% over the next 12 months.
CounterA cash-conversion ratio above 200% is unusually high and may reflect a one-time working-capital benefit rather than a sustainable conversion rate.
NRC has already reached its analyst price target and shows a negative modeled asymmetry ratio of -0.85, indicating more downside than upside is assessed from current levels.
→StableReward-to-risk math
- Expectation
- Analyst targets should be raised, or price should pull back to restore a positive risk/reward setup, over the next 12 months.
CounterReaching a price target while quality and momentum scores remain solid can precede target increases rather than marking a ceiling.
NRC shows an overbought technical condition with RSI at 78, alongside rising volume accumulation and price above its 200-day moving average.
→StableMomentum breakdown
- Expectation
- RSI should cool from 78 toward the 50-60 range without a sharp price reversal over the next few months, while the longer uptrend holds over 12 months.
CounterOverbought readings in strong uptrends can persist for extended periods without triggering a reversal, especially when volume accumulation confirms continued buying interest.
NRC's last four quarters split evenly between beats and misses, but the two misses were unusually large, both exceeding a 70% negative surprise.
→StableLast 4 quarters
- Expectation
- Surprise magnitude on any future miss should narrow well below 70%, and the beat rate should improve, over the next 12 months.
CounterSuch extreme surprise percentages often reflect small absolute EPS bases, where minor dollar misses translate into huge percentage swings, rather than genuine operational deterioration.
TrendMatrix Research · core thesis
Engine thesis — one sentence
NRC combines excellent profitability and cash-conversion metrics with having already reached its analyst price target and a negative modeled risk/reward setup, while an overbought technical condition and two large recent earnings misses add further uncertainty.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 8.1 |
| Gross margin | 8.4 |
| Op margin | 6.4 |
| Net margin | 3.3 |
| Current ratio | 2.1 |
| FCF quality | 10.0 |
| Moat | 6.4 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 42%
- ▸Excellent cash conversion: 218% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
6.7/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.4 |
| EPS growth | 10.0 |
Momentum
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.3 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Overbought (RSI 74)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.6 |
| Price target | 5.8 |
| erm sentiment | 10.0 |
- ▸Light analyst coverage (1.0) — signal dampened
- ▸Estimates rising as sentiment proxy (+77.8%)
Insider
7.4/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 9.8 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
3.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.3 |
| quality rank | 8.7 |
| growth rank | 2.5 |
- ▸Superior ROE vs peers
Technical
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.7 |
| support resistance | 2.0 |
| 52w position | 9.0 |
Risk (lower is worse)
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 2.6 |
| days to cover | 8.2 |
| volatility | 0.5 |
| put call | 10.0 |
| implied vol | 1.7 |
| max pain risk | 7.0 |
| beta | 10.0 |
| debt equity | 0.0 |
- ▸High IV: 70%
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 9.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| dividend safety | 5.5 |
- ▸Estimates up 77.8% (30d)
- ▸Earnings concerns: 2B/2M
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:6.7>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:20d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.7=NEGATIVE
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.71
Upside
-10.6%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $0.5B<$5B
Investment implication
The F-path SELL output reflects an overall score of 4.7 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Insider at 7.4) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.7=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.71 — supplementary context, not the trigger for this path.
The strongest dimensions are Insider at 7.4, Quality at 6.9, and Sentiment at 6.8; the weakest are Peer rank at 3.9, Catalyst at 4.6, and Technical at 4.6. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.71 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Excellent Quality Metrics
Trip ifReturn on equity falls below 20% from the current 42%, showing the quality advantage has eroded.
- P2Analyst Target Reached Negative Asymmetry
Trip ifAsymmetry ratio rises above 1.0 from the current -0.85, or the analyst price target is raised more than 15%, restoring a positive risk/reward setup.
- P3Overbought Technical Condition
Trip ifRSI falls below 40 from the current 78 alongside a price decline of more than 10%, confirming the overbought condition resolved into a reversal.
- P4Large Magnitude Earnings Misses
Trip ifCompany posts an earnings surprise below -70% in a subsequent quarter, repeating the large-magnitude miss pattern.