Value
9.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 8.2 |
| P/S | 10.0 |
| EV/EBITDA | 8.7 |
| Fwd P/E | 9.8 |
| PEG | 10.0 |
| Analyst target | 7.5 |
- ▸Forward P/E: 6.3x
- ▸PEG: 0.37
- ▸Attractively valued
QUAD · Why this verdict
Why Quad Graphics (QUAD) 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 score5.9/10
ConfidenceHIGH
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Quad Graphics trades at 6.3x forward earnings with 287% cash conversion, a 4.2% dividend and 18.6% analyst upside, but leverage is high, there is no moat and revenue is shrinking.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Quad trades at a forward P/E of 6.3x with a PEG of 0.34 and a 43% margin of safety, rated attractively valued. Valuation breakdown | Earnings growth holds so forward P/E stays below 8x over the next 12 months. | →Stable |
| CounterGrowth rank versus peers is only 1/10 and revenue is declining, so the low multiple may reflect a shrinking print business rather than mispricing. | ||
Quad converts 287% of net income into free cash flow and earns an excellent 29% ROE, supporting a 4.2% dividend. Quality breakdown | Free cash flow stays above 150% of net income and the dividend yield stays near 4%. | →Stable |
| CounterNet margin is only 0.7 on the quality scale and high ROE partly reflects a thin equity base from heavy leverage, so cash flow may not hold if revenue falls further. | ||
Quad beat EPS estimates in 3 of the last 4 quarters with no misses and an average surprise of 16.3%, most recently $0.24 versus $0.20 expected. Catalyst breakdown | EPS keeps meeting or beating estimates in the October 28, 2026 report and later quarters. | ↓Deteriorating |
| CounterRevenue is falling (quarterly revenue of $577.5M versus $629.4M a year ago in the March quarter), so beats may rely on cost cuts that cannot continue indefinitely. | ||
Debt is heavy, with a debt-to-equity ratio of 3.8 drawing a 1.5-point leverage penalty, and the business has no competitive moat. Bear case | Debt-to-equity declines below 3.0 as free cash flow pays down borrowings. | ↓Deteriorating |
| CounterWith little pricing power and falling revenue, leverage amplifies the downside if earnings weaken, and an elevated put/call ratio of 2.00 shows traders are hedging. | ||
The analyst target of $11.19 implies 18.6% upside from $9.44, with reward-to-risk of 3.24 against 5.7% downside to the stop. Upside pct | Price moves toward the $11.19 analyst target after earnings. | →Stable |
| CounterThe target is haircut by 15% and the price is range-bound with falling on-balance volume, so a catalyst may be missing. | ||
Quad trades at a forward P/E of 6.3x with a PEG of 0.34 and a 43% margin of safety, rated attractively valued.
→StableValuation breakdown
- Expectation
- Earnings growth holds so forward P/E stays below 8x over the next 12 months.
CounterGrowth rank versus peers is only 1/10 and revenue is declining, so the low multiple may reflect a shrinking print business rather than mispricing.
Quad converts 287% of net income into free cash flow and earns an excellent 29% ROE, supporting a 4.2% dividend.
→StableQuality breakdown
- Expectation
- Free cash flow stays above 150% of net income and the dividend yield stays near 4%.
CounterNet margin is only 0.7 on the quality scale and high ROE partly reflects a thin equity base from heavy leverage, so cash flow may not hold if revenue falls further.
Quad beat EPS estimates in 3 of the last 4 quarters with no misses and an average surprise of 16.3%, most recently $0.24 versus $0.20 expected.
↓DeterioratingCatalyst breakdown
- Expectation
- EPS keeps meeting or beating estimates in the October 28, 2026 report and later quarters.
CounterRevenue is falling (quarterly revenue of $577.5M versus $629.4M a year ago in the March quarter), so beats may rely on cost cuts that cannot continue indefinitely.
Debt is heavy, with a debt-to-equity ratio of 3.8 drawing a 1.5-point leverage penalty, and the business has no competitive moat.
↓DeterioratingBear case
- Expectation
- Debt-to-equity declines below 3.0 as free cash flow pays down borrowings.
CounterWith little pricing power and falling revenue, leverage amplifies the downside if earnings weaken, and an elevated put/call ratio of 2.00 shows traders are hedging.
The analyst target of $11.19 implies 18.6% upside from $9.44, with reward-to-risk of 3.24 against 5.7% downside to the stop.
→StableUpside pct
- Expectation
- Price moves toward the $11.19 analyst target after earnings.
CounterThe target is haircut by 15% and the price is range-bound with falling on-balance volume, so a catalyst may be missing.
Per-dimension breakdown
Quality
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 9.8 |
| ROA | 3.7 |
| Gross margin | 0.3 |
| Op margin | 1.7 |
| Net margin | 0.7 |
| Current ratio | 3.5 |
| FCF quality | 10.0 |
| Moat | 4.9 |
| Piotroski F | 6.7 |
- ▸Excellent ROE: 29%
- ▸Excellent cash conversion: 287% FCF/NI
- ▸No competitive moat
Growth
6.3/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.7 |
| EPS growth | 10.0 |
Momentum
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 6.3 |
| OBV | 1.0 |
| MA position | 4.0 |
| Volume | 3.8 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 4.8 |
| Analyst rating | 5.0 |
| Price target | 9.2 |
- ▸Analyst upside: 40%
Insider
5.9/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.6 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
4.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 9.4 |
| quality rank | 5.7 |
| growth rank | 1.3 |
- ▸Attractive P/E vs peers
- ▸Superior ROE vs peers
Technical
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 5.7 |
| support resistance | 5.5 |
| 52w position | 7.0 |
Risk (lower is worse)
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.1 |
| days to cover | 4.2 |
| volatility | 5.0 |
| put call | 10.0 |
| implied vol | 0.0 |
| beta | 6.6 |
| debt equity | 1.2 |
- ▸High IV: 92%
Catalyst
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 5.6 |
| surprise avg | 6.8 |
| dividend safety | 5.8 |
| news activity | 8.0 |
- ▸Dividend: 4.2%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- ASYMMETRY:3.2>=1.5
- INSIDER:OK
- 8K:CLEAN
- EARNINGS_PROXIMITY:NO_DATE
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- MOMENTUM:4.1<4.5
Warning (0)
none
Reward-to-Risk
3.16
Upside
+19.1%
Downside
6.0%
Sizing output
AVOID
SetupRange Bound — RSI 48 mid-range, Bollinger mid-band
EdgeInst Constrain — Small cap ($0.5B) below institutional reach
SuitabilityAggressive — MCap $0.5B<$5B
Investment implication
The F-path SELL output reflects an overall score of 3.2 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 9.0) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:4.1<4.5) reinforce the read. Current asymmetry R:R is 3.16 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 9.0, Growth at 6.3, and Sentiment at 6.2; the weakest are Momentum at 4.1, Peer rank at 4.2, and Quality at 4.6. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of 3.16 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Attractive Valuation Margin Of Safety
Trip ifForward P/E rises above 9x from the current 6.3x.
- P2Excellent Cash Conversion And Returns
Trip ifFree cash flow to net income ratio falls below 100%.
- P3Earnings Beat Record
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P4High Leverage No Moat
Trip ifDebt-to-equity exceeds 4.5 from the current 3.8.
- P5Analyst Upside To Target
Trip ifPrice falls below the $8.90 stop level.