Value
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 1.1 |
| P/S | 9.2 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 6.1 |
| PEG | 10.0 |
| Analyst target | 6.0 |
- ▸Forward P/E: 21.1x
- ▸PEG: 0.04
REF · Why this verdict
Why Reformation (REF) 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 score6.2/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Reformation is a fast-growing apparel retailer with 24% YoY growth and rising earnings estimates, but insiders sold $58M (6.3% of market cap) and only 7.5% upside remains to the analyst target.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Reformation shows a Piotroski F-Score of 8/9 and a gross margin score of 8.3, but debt-to-equity of 1.2 draws a leverage penalty. Quality breakdown | Net margin improves above 5% while debt-to-equity stays at or below 1.2. | →Stable |
| CounterThe net margin score is just 1.0 and peers rank the quality at 1.9/10, so profitability is thin against peers. | ||
Reformation is growing 24% YoY and ranks as an industry growth leader, with quarterly revenue of $155.2M in June 2026 versus $125.1M a year earlier. Growth breakdown | Quarterly revenue keeps rising toward the $169.8M next-quarter estimate over the next 12 months. | →Stable |
| CounterApparel retail is a consumer cyclical segment with a -1.5 sector penalty, and growth could slow quickly if discretionary spending weakens. | ||
Insiders sold $61.4M and bought only $3.1M over 90 days, a net $58.3M or 6.338% of market cap sold. Insider | Insider selling slows below 1% of market cap per quarter and buying picks up. | ↑Improving |
| CounterLarge sales may reflect post-listing liquidity needs of early holders rather than a negative view, but the amount is large enough to pressure the stock. | ||
The $16.75 analyst target implies only 7.5% upside from $15.58, with reward-to-risk of 0.5 against 15.0% downside to the stop. Upside pct | Analyst targets are raised above $19 as earnings estimates keep trending up. | ↓Deteriorating |
| CounterOnly 8 analysts cover the stock and the target is already close to the price, so the risk of a decline outweighs the remaining gain. | ||
Momentum is strong at 7.5/10 with rising on-balance volume, and institutions are accumulating. Momentum breakdown | Price holds above its 200-day average with continued volume accumulation. | ↑Improving |
| CounterRSI and Bollinger scores are weak, which suggests the move may be stretched in the short term. | ||
Reformation shows a Piotroski F-Score of 8/9 and a gross margin score of 8.3, but debt-to-equity of 1.2 draws a leverage penalty.
→StableQuality breakdown
- Expectation
- Net margin improves above 5% while debt-to-equity stays at or below 1.2.
CounterThe net margin score is just 1.0 and peers rank the quality at 1.9/10, so profitability is thin against peers.
Reformation is growing 24% YoY and ranks as an industry growth leader, with quarterly revenue of $155.2M in June 2026 versus $125.1M a year earlier.
→StableGrowth breakdown
- Expectation
- Quarterly revenue keeps rising toward the $169.8M next-quarter estimate over the next 12 months.
CounterApparel retail is a consumer cyclical segment with a -1.5 sector penalty, and growth could slow quickly if discretionary spending weakens.
Insiders sold $61.4M and bought only $3.1M over 90 days, a net $58.3M or 6.338% of market cap sold.
↑ImprovingInsider
- Expectation
- Insider selling slows below 1% of market cap per quarter and buying picks up.
CounterLarge sales may reflect post-listing liquidity needs of early holders rather than a negative view, but the amount is large enough to pressure the stock.
The $16.75 analyst target implies only 7.5% upside from $15.58, with reward-to-risk of 0.5 against 15.0% downside to the stop.
↓DeterioratingUpside pct
- Expectation
- Analyst targets are raised above $19 as earnings estimates keep trending up.
CounterOnly 8 analysts cover the stock and the target is already close to the price, so the risk of a decline outweighs the remaining gain.
Momentum is strong at 7.5/10 with rising on-balance volume, and institutions are accumulating.
↑ImprovingMomentum breakdown
- Expectation
- Price holds above its 200-day average with continued volume accumulation.
CounterRSI and Bollinger scores are weak, which suggests the move may be stretched in the short term.
Per-dimension breakdown
Quality
5.9/10data confidence 86%| Component | Sub-score |
|---|---|
| Gross margin | 8.3 |
| Op margin | 4.9 |
| Net margin | 1.0 |
| Current ratio | 5.7 |
| Moat | 6.5 |
| Piotroski F | 8.9 |
- ▸Strong Piotroski F-Score: 8/9
Growth
9.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 8.5 |
| EPS growth | 10.0 |
- ▸Strong growth: 24% YoY
Momentum
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.2 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 7.5 |
| Volume | 5.0 |
- ▸Volume accumulation (rising OBV)
Sentiment
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.0 |
| Analyst rating | 7.9 |
| Price target | 7.9 |
- ▸Light analyst coverage (8.0) — signal dampened
- ▸Analyst upside: 22%
Insider
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 2.0 |
| insider conviction | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Heavy insider selling — $41,543,947 (4.451% of mkt cap)
- ▸Institutions accumulating
Peer rank
3.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.0 |
| quality rank | 1.3 |
| growth rank | 9.3 |
- ▸Industry growth leader
Technical
3.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.0 |
| support resistance | 1.0 |
| 52w position | 8.3 |
Risk (lower is worse)
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| days to cover | 5.9 |
| volatility | 0.0 |
| put call | 10.0 |
| implied vol | 0.2 |
| max pain risk | 3.0 |
| debt equity | 4.7 |
- ▸High IV: 79%
- ▸Above max pain $10
Catalyst
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 6.5 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 6.2 |
| news activity | 5.0 |
- ▸Earnings in 7 days
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (4)
- MOMENTUM:7.1>=5.5
- 8K:CLEAN
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- ASYMMETRY:0.4<1.5@spot
- INSIDER:4.45%=EXTREME
- EARNINGS_PROXIMITY:7d<=7d
Warning (0)
none
Reward-to-Risk
0.40
Upside
+6.0%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $0.9B<$5B
Investment implication
The F-path SELL output reflects an overall score of 4.2 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Growth at 9.2) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:0.4<1.5@spot, INSIDER:4.45%=EXTREME, EARNINGS_PROXIMITY:7d<=7d) reinforce the read. Current asymmetry R:R is 0.40 — supplementary context, not the trigger for this path.
The strongest dimensions are Growth at 9.2, Momentum at 7.1, and Sentiment at 7.0; the weakest are Technical at 3.4, Peer rank at 3.9, and Risk (lower is worse) at 4.0. The V9 engine flagged 3 failed gates, producing an asymmetric reward-to-risk of 0.40 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Strong Growth Industry Leader
Trip ifRevenue growth falls below 12% YoY for 2 consecutive quarters.
- P2Extreme Insider Selling
Trip ifInsider net selling exceeds 10% of market cap over 90 days.
- P3Thin Upside To Analyst Target
Trip ifPrice falls below the $14.49 stop level while the analyst target stays below $17.
- P4Positive Momentum Volume Accumulation
Trip ifPrice closes below the 200-day moving average for 10 consecutive trading days.
- P5Quality Fundamentals With Leverage
Trip ifDebt-to-equity exceeds 1.8 from the current 1.2.