Value
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.8 |
| P/S | 6.9 |
| EV/EBITDA | 0.4 |
| Fwd P/E | 5.8 |
| PEG | 6.2 |
| Analyst target | 7.5 |
- ▸Forward P/E: 22.3x
- ▸PEG: 1.21
Q · Why this verdict
Why Qnity Electronics (Q) 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 score5.4/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Qnity Electronics has beaten analyst estimates in 3 of the last 3 reported quarters with an average surprise of 31%, earns a strong Piotroski F-Score of 8/9, and leads its peers on value rank at 7.6/10, but generates 79% of revenue from the Asia-Pacific region and currently trades above analyst price targets.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
79% of revenue originates from the Asia-Pacific region, creating exposure to trade policy changes, export control regulations, currency fluctuations, and geopolitical tensions that could materially reduce the addressable market for semiconductor equipment. Bear case | Asia-Pacific concentration decreases below 70% within 24 months as the company diversifies its geographic customer base. | ↑Improving |
| CounterAsia-Pacific concentration in semiconductor equipment reflects where the world's most advanced fabs are being built; exposure to this region is synonymous with exposure to the global semiconductor capex cycle, not pure geopolitical risk. | ||
Qnity Electronics has beaten analyst estimates in all 3 of the last 3 reported quarters with an average positive surprise of 31%, including a 46% beat in the most recent quarter, suggesting consistent execution in the semiconductor equipment market. Earnings | Earnings beats continue in at least 3 of the next 4 quarters with average surprise above 10%. | ↓Deteriorating |
| CounterOnly 3 quarters of data are available, making the beat streak statistically less robust than a 4-quarter pattern, and the average could revert as analyst estimates adjust upward to account for prior beats. | ||
A Piotroski F-Score of 8/9, forward P/E of 33.6x that ranks attractively versus peers at 7.6/10, and an FCF quality score of 7.4 indicate a high-quality business with solid balance sheet health and reasonable relative valuation in the semiconductor equipment sector. Quality breakdown | Piotroski F-Score remains at 7 or above and FCF quality stays above 6.0 over the next 12 months. | →Stable |
| CounterA forward P/E of 33.6x and PEG of 2.70 represent expensive absolute valuation, and if the semiconductor equipment cycle turns, the multiple could compress sharply regardless of relative peer positioning. | ||
The stock currently trades above its analyst consensus price target, meaning it has negative implied upside of -6.5% from current levels, and the resistance-based take profit of $163.64 is only 1.6% above the current price of $161.02, leaving minimal reward for risk taken. Targets | Analyst consensus target rises above $180 within 6 months following earnings estimate upgrades. | ↓Deteriorating |
| CounterStocks that trade persistently above analyst targets often reflect earnings revisions still lagging behind actual business momentum; the targets may be raised to match price rather than price falling to match targets. | ||
79% of revenue originates from the Asia-Pacific region, creating exposure to trade policy changes, export control regulations, currency fluctuations, and geopolitical tensions that could materially reduce the addressable market for semiconductor equipment.
↑ImprovingBear case
- Expectation
- Asia-Pacific concentration decreases below 70% within 24 months as the company diversifies its geographic customer base.
CounterAsia-Pacific concentration in semiconductor equipment reflects where the world's most advanced fabs are being built; exposure to this region is synonymous with exposure to the global semiconductor capex cycle, not pure geopolitical risk.
Qnity Electronics has beaten analyst estimates in all 3 of the last 3 reported quarters with an average positive surprise of 31%, including a 46% beat in the most recent quarter, suggesting consistent execution in the semiconductor equipment market.
↓DeterioratingEarnings
- Expectation
- Earnings beats continue in at least 3 of the next 4 quarters with average surprise above 10%.
CounterOnly 3 quarters of data are available, making the beat streak statistically less robust than a 4-quarter pattern, and the average could revert as analyst estimates adjust upward to account for prior beats.
A Piotroski F-Score of 8/9, forward P/E of 33.6x that ranks attractively versus peers at 7.6/10, and an FCF quality score of 7.4 indicate a high-quality business with solid balance sheet health and reasonable relative valuation in the semiconductor equipment sector.
→StableQuality breakdown
- Expectation
- Piotroski F-Score remains at 7 or above and FCF quality stays above 6.0 over the next 12 months.
CounterA forward P/E of 33.6x and PEG of 2.70 represent expensive absolute valuation, and if the semiconductor equipment cycle turns, the multiple could compress sharply regardless of relative peer positioning.
The stock currently trades above its analyst consensus price target, meaning it has negative implied upside of -6.5% from current levels, and the resistance-based take profit of $163.64 is only 1.6% above the current price of $161.02, leaving minimal reward for risk taken.
↓DeterioratingTargets
- Expectation
- Analyst consensus target rises above $180 within 6 months following earnings estimate upgrades.
CounterStocks that trade persistently above analyst targets often reflect earnings revisions still lagging behind actual business momentum; the targets may be raised to match price rather than price falling to match targets.
Per-dimension breakdown
Quality
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.2 |
| ROA | 3.5 |
| Gross margin | 5.2 |
| Op margin | 8.9 |
| Net margin | 5.6 |
| Current ratio | 7.0 |
| FCF quality | 9.4 |
| Moat | 6.4 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 132% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
4.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 8.0 |
| EPS growth | 0.0 |
- ▸Strong growth: 22% YoY
Momentum
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 1.4 |
| OBV | 10.0 |
| MA position | 7.2 |
| Volume | 3.8 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA but MA still rising (+4.8%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
7.8/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.0 |
| Analyst rating | 8.2 |
| Price target | 9.2 |
- ▸Light analyst coverage (10.0) — signal dampened
- ▸Analyst upside: 42%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.0 |
- ▸Negligible insider buying — $138,136 (0.001% of mkt cap)
Peer rank
3.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.6 |
| quality rank | 4.2 |
| growth rank | 4.2 |
Technical
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.8 |
| support resistance | 3.8 |
| 52w position | 3.9 |
| gap | 5.0 |
Risk (lower is worse)
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.8 |
| days to cover | 8.1 |
| volatility | 1.5 |
| put call | 9.6 |
| implied vol | 2.2 |
| max pain risk | 3.0 |
| debt equity | 7.4 |
- ▸High IV: 67%
- ▸Above max pain $60
- ▸Concentration risks: 1 HIGH, 2 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 7.5 |
| news activity | 5.0 |
- ▸Perfect beat streak: 4Q
- ▸Earnings in 6 days
- ▸Dividend aristocrat: 0.3% 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:5.4>=4.5
- ASYMMETRY:1.6>=1.5
- INSIDER:OK
- 8K:CLEAN
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- EARNINGS_PROXIMITY:6d<=7d
Warning (1)
- MOMENTUM:5.4<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
1.62
Upside
+23.4%
Downside
14.5%
Sizing output
AVOID
SetupRange Bound — RSI 45 mid-range, Bollinger mid-band
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 4.6 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Sentiment at 7.8) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( EARNINGS_PROXIMITY:6d<=7d) reinforce the read. Current asymmetry R:R is 1.62 — supplementary context, not the trigger for this path.
The strongest dimensions are Sentiment at 7.8, Catalyst at 7.1, and Quality at 6.3; the weakest are Peer rank at 3.7, Growth at 4.0, and Technical at 4.4. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 1.62 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Earnings Beat Streak
Trip ifEPS surprise falls below -10% in at least 2 of the next 4 quarters.
- P2Asia Pacific Concentration Risk
Trip ifAsia-Pacific revenue share rises above 85% in any annual filing.
- P3Quality And Value Fundamentals
Trip ifPiotroski F-Score falls below 6 for 2 consecutive reporting periods.
- P4Above Price Target Risk
Trip ifAnalyst consensus target falls below $140, a decline of more than 13% from the current target of $163.