Value
7.2/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 1.3 |
| P/S | 7.9 |
| EV/EBITDA | 2.6 |
| Fwd P/E | 8.8 |
| PEG | 10.0 |
- ▸Forward P/E: 12.6x
- ▸PEG: 0.19
- ▸Attractively valued
RSVR · Why this verdict
Why Reservoir Media (RSVR) 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 score5.0/10
ConfidenceHIGH
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Reservoir Media is inexpensive (forward P/E 12.6x, PEG 0.20) with 15.5% distance to the analyst target, but heavy music-publishing concentration, deeply negative free cash flow and an uneven earnings record limit conviction.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The stock is attractively valued, with a forward P/E of 12.6x and a PEG of 0.20. Valuation breakdown | Earnings grow in line with forecasts so the PEG stays below 1.0 while the multiple holds. | →Stable |
| CounterThe trailing P/E component scores only 1.3/10, so the cheapness depends entirely on forecast earnings that the company has often missed. | ||
Revenue is concentrated, with music publishing at 66.0% of the business and digital music services flagged as a key counterparty, giving 2 HIGH concentration risks. Bear case | The mix diversifies or the key counterparties renew on stable terms over the next 12 months. | ↑Improving |
| CounterMusic publishing is a royalty stream with long-lived catalog assets, so concentration may be more stable than it looks, but one platform renegotiation could hit revenue. | ||
Cash conversion is a red flag at -754% FCF/NI, offset by a strong Piotroski F-Score of 7/9, so reported profits are not yet turning into free cash. Quality breakdown | Free cash flow turns positive and the quality score recovers above 5/10 within 12 months. | →Stable |
| CounterCatalog acquisitions are booked as investing outflows, so negative free cash flow may reflect growth spending rather than weak operations, but they also add leverage. | ||
The earnings record is uneven: 1 beat against 2 misses in the last four quarters, with an average surprise of -7.8%. Earnings | EPS meets or beats estimates in the report due 2026-11-04 and the following quarter. | ↓Deteriorating |
| CounterThe latest quarter was inline at $0.15 against $0.14 estimated, suggesting estimates may have reset to a more achievable level. | ||
The $11.05 analyst target sits 15.5% above the $9.57 price, a reward-to-risk of 2.5 against a 6.2% downside to the stop near $9.21. Estimated upside | Price moves toward the $11.05 analyst target after the earnings report in 11 days. | →Stable |
| CounterSetup is range-bound, with an RSI near 51 and weak technical scores, so upside may stall in the range. | ||
The stock is attractively valued, with a forward P/E of 12.6x and a PEG of 0.20.
→StableValuation breakdown
- Expectation
- Earnings grow in line with forecasts so the PEG stays below 1.0 while the multiple holds.
CounterThe trailing P/E component scores only 1.3/10, so the cheapness depends entirely on forecast earnings that the company has often missed.
Revenue is concentrated, with music publishing at 66.0% of the business and digital music services flagged as a key counterparty, giving 2 HIGH concentration risks.
↑ImprovingBear case
- Expectation
- The mix diversifies or the key counterparties renew on stable terms over the next 12 months.
CounterMusic publishing is a royalty stream with long-lived catalog assets, so concentration may be more stable than it looks, but one platform renegotiation could hit revenue.
Cash conversion is a red flag at -754% FCF/NI, offset by a strong Piotroski F-Score of 7/9, so reported profits are not yet turning into free cash.
→StableQuality breakdown
- Expectation
- Free cash flow turns positive and the quality score recovers above 5/10 within 12 months.
CounterCatalog acquisitions are booked as investing outflows, so negative free cash flow may reflect growth spending rather than weak operations, but they also add leverage.
The earnings record is uneven: 1 beat against 2 misses in the last four quarters, with an average surprise of -7.8%.
↓DeterioratingEarnings
- Expectation
- EPS meets or beats estimates in the report due 2026-11-04 and the following quarter.
CounterThe latest quarter was inline at $0.15 against $0.14 estimated, suggesting estimates may have reset to a more achievable level.
The $11.05 analyst target sits 15.5% above the $9.57 price, a reward-to-risk of 2.5 against a 6.2% downside to the stop near $9.21.
→StableEstimated upside
- Expectation
- Price moves toward the $11.05 analyst target after the earnings report in 11 days.
CounterSetup is range-bound, with an RSI near 51 and weak technical scores, so upside may stall in the range.
Per-dimension breakdown
Quality
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.7 |
| ROA | 1.8 |
| Gross margin | 8.9 |
| Op margin | 5.2 |
| Net margin | 2.4 |
| Current ratio | 4.9 |
| FCF quality | 0.0 |
| Moat | 6.4 |
| Piotroski F | 7.8 |
- ▸Earnings quality RED FLAG: -754% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
5.4/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 5.4 |
Momentum
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 6.1 |
| OBV | 1.0 |
| MA position | 6.0 |
| Volume | 0.8 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.9 |
| Price target | 9.0 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (2.0) — signal dampened
- ▸Analyst upside: 36%
Insider
4.2/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 4.5 |
| notable moves | 3.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
3.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.7 |
| quality rank | 3.5 |
| growth rank | 5.2 |
Technical
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 5.2 |
| support resistance | 3.3 |
| 52w position | 4.3 |
Risk (lower is worse)
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.2 |
| days to cover | 6.4 |
| volatility | 8.7 |
| put call | 6.7 |
| implied vol | 0.0 |
| beta | 8.4 |
| debt equity | 4.5 |
- ▸High IV: 111%
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
2.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 1.1 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
- ▸Earnings concerns: 1B/2M
- ▸Earnings in 5 days
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- ASYMMETRY:2.6>=1.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:3.9<4.5
- EARNINGS_PROXIMITY:5d<=7d
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
2.57
Upside
+15.6%
Downside
6.1%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 59, MACD bullish
EdgeInst Constrain — Small cap ($0.6B) below institutional reach
SuitabilityAggressive — MCap $0.6B<$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 7.2) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:3.9<4.5, EARNINGS_PROXIMITY:5d<=7d) reinforce the read. Current asymmetry R:R is 2.57 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 7.2, Sentiment at 6.7, and Risk (lower is worse) at 6.3; the weakest are Catalyst at 2.8, Peer rank at 3.7, and Momentum at 3.9. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of 2.57 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 Peg
Trip ifPEG ratio rises above 1.0 from the current 0.20.
- P2Music Publishing Concentration
Trip ifMusic publishing share of revenue exceeds 75% from the current 66.0%.
- P3Negative Fcf Strong Piotroski
Trip ifPiotroski F-Score falls below 5/9 from the current 7/9.
- P4Uneven Earnings Record
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P5Analyst Target Upside
Trip ifPrice falls below the $9.21 stop level from the current $9.57.