Value
6.3/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 1.9 |
| P/S | 9.5 |
| EV/EBITDA | 0.5 |
| Fwd P/E | 5.6 |
| PEG | 10.0 |
- ▸Forward P/E: 22.9x
- ▸PEG: 0.13
RGR · Why this verdict
Why Sturm, Ruger & Company (RGR) 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
Sturm Ruger is under a detected tender offer with the price above the $36.55 analyst target, so the deal terms drive the stock; underlying fundamentals show strong cash conversion and revenue growth but a poor earnings record.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
An M&A event, a tender offer, was detected, and the guidance is to hold for deal completion or sell if the spread falls under 3%. Warnings | The tender offer closes on its stated terms within 12 months and the price stays near the offer level. | ↓Deteriorating |
| CounterIf the offer is withdrawn or fails to close, the price could fall back toward the analyst target, which is below the current $45.47 price. | ||
The $45.47 price is above the $36.55 analyst target, with reported upside of -19.6% and negative reward-to-risk of -1.9 against 10.3% downside to the stop. Upside pct | The price remains supported by the deal rather than falling toward the analyst target. | ↑Improving |
| CounterWithout the offer the stock would be valued off fundamentals, and the target implies a much lower price. | ||
Sturm Ruger converts 309% of net income into free cash flow and has a Piotroski F-Score of 8/9. Quality breakdown | Free cash flow stays above 150% of net income over the next 12 months. | →Stable |
| CounterNet margin and ROE are low (net margin score 1.1, ROE score 1.4), so very high cash conversion may be a working-capital effect on small profits. | ||
Sturm Ruger missed EPS estimates in 3 of the last 4 quarters with an average surprise of -20.8%, though the latest $0.52 beat the $0.42 estimate. Catalyst breakdown | EPS meets or beats estimates in the November 2026 report. | ↓Deteriorating |
| CounterMisses in 9 of the last 12 reports show that estimates are routinely too high, and one recent beat may not signal a change. | ||
Quarterly revenue reached $158.1M in June 2026 compared with $132.5M a year earlier. Revenue quarters | Quarterly revenue stays above $140M over the next 12 months. | ↓Deteriorating |
| CounterThe next-quarter estimate of $131.0M is well below the latest quarter, hinting that the recent rise may not last. | ||
An M&A event, a tender offer, was detected, and the guidance is to hold for deal completion or sell if the spread falls under 3%.
↓DeterioratingWarnings
- Expectation
- The tender offer closes on its stated terms within 12 months and the price stays near the offer level.
CounterIf the offer is withdrawn or fails to close, the price could fall back toward the analyst target, which is below the current $45.47 price.
The $45.47 price is above the $36.55 analyst target, with reported upside of -19.6% and negative reward-to-risk of -1.9 against 10.3% downside to the stop.
↑ImprovingUpside pct
- Expectation
- The price remains supported by the deal rather than falling toward the analyst target.
CounterWithout the offer the stock would be valued off fundamentals, and the target implies a much lower price.
Sturm Ruger converts 309% of net income into free cash flow and has a Piotroski F-Score of 8/9.
→StableQuality breakdown
- Expectation
- Free cash flow stays above 150% of net income over the next 12 months.
CounterNet margin and ROE are low (net margin score 1.1, ROE score 1.4), so very high cash conversion may be a working-capital effect on small profits.
Sturm Ruger missed EPS estimates in 3 of the last 4 quarters with an average surprise of -20.8%, though the latest $0.52 beat the $0.42 estimate.
↓DeterioratingCatalyst breakdown
- Expectation
- EPS meets or beats estimates in the November 2026 report.
CounterMisses in 9 of the last 12 reports show that estimates are routinely too high, and one recent beat may not signal a change.
Quarterly revenue reached $158.1M in June 2026 compared with $132.5M a year earlier.
↓DeterioratingRevenue quarters
- Expectation
- Quarterly revenue stays above $140M over the next 12 months.
CounterThe next-quarter estimate of $131.0M is well below the latest quarter, hinting that the recent rise may not last.
Per-dimension breakdown
Quality
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.4 |
| ROA | 1.0 |
| Gross margin | 0.0 |
| Op margin | 2.1 |
| Net margin | 1.1 |
| Current ratio | 9.7 |
| FCF quality | 10.0 |
| Moat | 6.4 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 309% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
8.7/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 7.3 |
| EPS growth | 10.0 |
Momentum
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 3.1 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 1.9 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 3.9 |
| erm sentiment | 5.0 |
Insider
6.8/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 8.4 |
| notable moves | 7.0 |
- ▸Insider selling (low materiality) — $49,170 (0.007% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.7 |
| quality rank | 2.8 |
| growth rank | 4.4 |
- ▸Conservative debt levels
Technical
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.2 |
| support resistance | 4.5 |
| 52w position | 8.2 |
Risk (lower is worse)
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 4.0 |
| days to cover | 6.2 |
| volatility | 0.0 |
| put call | 6.3 |
| implied vol | 3.0 |
| beta | 10.0 |
| debt equity | 10.0 |
- ▸High IV: 62%
Catalyst
3.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| dividend safety | 5.8 |
- ▸Earnings concerns: 1B/3M
- ▸Earnings in 6 days
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:4.1<4.5
- ASYMMETRY:-1.8=NEGATIVE
- EARNINGS_PROXIMITY:6d<=7d
Warning (0)
none
Reward-to-Risk
-1.82
Upside
-21.2%
Downside
11.7%
Sizing output
AVOID
SetupRange Bound — RSI 59 mid-range, Bollinger mid-band
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $0.7B<$5B
Investment implication
The F-path SELL output reflects an overall score of 4.5 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Growth at 8.7) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:4.1<4.5, ASYMMETRY:-1.8=NEGATIVE, EARNINGS_PROXIMITY:6d<=7d) reinforce the read. Current asymmetry R:R is -1.82 — supplementary context, not the trigger for this path.
The strongest dimensions are Growth at 8.7, Insider at 6.8, and Value at 6.3; the weakest are Catalyst at 3.2, Momentum at 4.1, and Quality at 4.5. The V9 engine flagged 3 failed gates, producing an asymmetric reward-to-risk of -1.82 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Tender Offer Deal Driven Price
Trip ifTender offer is withdrawn or the offer price falls below $40.
- P2Price Above Analyst Target
Trip ifPrice falls below the $42.29 stop level.
- P3Excellent Cash Conversion
Trip ifFree cash flow to net income ratio falls below 100%.
- P4Poor Earnings Record
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P5Revenue Growth Recovery
Trip ifQuarterly revenue falls below $130M for 2 consecutive quarters.