Value
8.3/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 7.6 |
| P/S | 10.0 |
| EV/EBITDA | 6.1 |
| Fwd P/E | 9.2 |
| PEG | 8.0 |
- ▸Forward P/E: 10.4x
- ▸PEG: 0.83
- ▸Attractively valued
SCSC · Why this verdict
Why ScanSource (SCSC) 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
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
ScanSource combines a cheap, cash-generative valuation and rising analyst estimates with a weak-growth headwind and a negative risk-adjusted asymmetry ratio, consistent with a call to consider reducing the position.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Weak growth stands as a headwind for ScanSource against the otherwise cheap valuation and cash-generative profile. Bear case | Revenue and earnings growth rates should show clear acceleration over the next two reported quarters. | ↓Deteriorating |
| CounterAs an IT distributor, ScanSource's growth is heavily tied to end-customer hardware refresh cycles, and a period of weak growth may simply reflect a temporary industry-wide lull. | ||
ScanSource trades at a forward P/E of 11.5x with a PEG of 0.77, backed by excellent cash conversion of 146% FCF/NI and a strong Piotroski F-Score of 8 out of 9. Valuation breakdown | The PEG ratio should stay below 1.0 and cash conversion should remain above 100% over the next 12 months. | →Stable |
| CounterWeak growth flagged elsewhere could make the cheap multiple a value trap rather than a mispricing if growth doesn't reaccelerate. | ||
ScanSource has beaten consensus EPS in 3 of its last 4 quarters, and analyst estimates have risen 60% over the past 30 days, a strong revision signal. Catalyst breakdown | The beat streak should extend and estimates should continue trending upward through the next reported quarter on 2026-08-20. | ↑Improving |
| CounterA 60% estimate revision in just 30 days is a large move that could reflect a low starting base or a one-time item rather than a durable re-rating of the earnings outlook. | ||
The risk-adjusted asymmetry ratio is negative at -0.91, with the analyst target already reached and -8.7% implied upside against 9.6% downside, explaining the reduce-position stance. Warnings | The asymmetry ratio should turn positive as either price consolidates lower or analyst targets are revised upward following the rising estimates. | ↓Deteriorating |
| CounterThe 60% rise in analyst estimates over the past 30 days could quickly translate into higher price targets, flipping the asymmetry ratio positive. | ||
Weak growth stands as a headwind for ScanSource against the otherwise cheap valuation and cash-generative profile.
↓DeterioratingBear case
- Expectation
- Revenue and earnings growth rates should show clear acceleration over the next two reported quarters.
CounterAs an IT distributor, ScanSource's growth is heavily tied to end-customer hardware refresh cycles, and a period of weak growth may simply reflect a temporary industry-wide lull.
ScanSource trades at a forward P/E of 11.5x with a PEG of 0.77, backed by excellent cash conversion of 146% FCF/NI and a strong Piotroski F-Score of 8 out of 9.
→StableValuation breakdown
- Expectation
- The PEG ratio should stay below 1.0 and cash conversion should remain above 100% over the next 12 months.
CounterWeak growth flagged elsewhere could make the cheap multiple a value trap rather than a mispricing if growth doesn't reaccelerate.
ScanSource has beaten consensus EPS in 3 of its last 4 quarters, and analyst estimates have risen 60% over the past 30 days, a strong revision signal.
↑ImprovingCatalyst breakdown
- Expectation
- The beat streak should extend and estimates should continue trending upward through the next reported quarter on 2026-08-20.
CounterA 60% estimate revision in just 30 days is a large move that could reflect a low starting base or a one-time item rather than a durable re-rating of the earnings outlook.
The risk-adjusted asymmetry ratio is negative at -0.91, with the analyst target already reached and -8.7% implied upside against 9.6% downside, explaining the reduce-position stance.
↓DeterioratingWarnings
- Expectation
- The asymmetry ratio should turn positive as either price consolidates lower or analyst targets are revised upward following the rising estimates.
CounterThe 60% rise in analyst estimates over the past 30 days could quickly translate into higher price targets, flipping the asymmetry ratio positive.
Per-dimension breakdown
Quality
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.9 |
| ROA | 2.3 |
| Gross margin | 0.0 |
| Op margin | 1.4 |
| Net margin | 1.2 |
| Current ratio | 6.3 |
| FCF quality | 9.0 |
| Moat | 6.4 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 120% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
8.4/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 6.8 |
| EPS growth | 10.0 |
Momentum
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 0.5 |
| OBV | 1.0 |
| MA position | 6.0 |
| Volume | 7.8 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.0 |
| Analyst rating | 5.0 |
| Price target | 6.2 |
Insider
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 2.0 |
| holder change | 6.4 |
| notable moves | 7.0 |
- ▸Notable insider selling — $5,484,319 (0.453% of mkt cap)
Peer rank
4.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.0 |
| quality rank | 2.9 |
| growth rank | 4.3 |
Technical
7.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.5 |
| support resistance | 7.4 |
| 52w position | 7.8 |
Risk (lower is worse)
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.2 |
| days to cover | 5.6 |
| volatility | 4.0 |
| put call | 10.0 |
| implied vol | 1.9 |
| max pain risk | 3.0 |
| beta | 6.0 |
| debt equity | 9.5 |
| news risk | 6.0 |
- ▸High IV: 68%
- ▸Above max pain $50
Catalyst
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 3.5 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 3.2 |
| news activity | 5.0 |
- ▸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 (3)
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (4)
- MOMENTUM:4.2<4.5
- ASYMMETRY:-1.1=NEGATIVE
- INSIDER:0.45%=HEAVY
- EARNINGS_PROXIMITY:6d<=7d
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-1.14
Upside
-7.8%
Downside
6.8%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeInst Constrain — Small cap ($1.2B) below institutional reach
SuitabilityAggressive — MCap $1.2B<$5B
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 ( Growth at 8.4) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:4.2<4.5, ASYMMETRY:-1.1=NEGATIVE, INSIDER:0.45%=HEAVY) reinforce the read. Current asymmetry R:R is -1.14 — supplementary context, not the trigger for this path.
The strongest dimensions are Growth at 8.4, Value at 8.3, and Technical at 7.9; the weakest are Momentum at 4.2, Quality at 4.3, and Catalyst at 4.5. The V9 engine flagged 4 failed gates with 1 warning, producing an asymmetric reward-to-risk of -1.14 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Cheap Valuation With Cash Conversion
Trip ifPEG ratio rises above 1.5 without a corresponding change in the growth outlook.
- P2Earnings Beat Streak With Rising Estimates
Trip ifScanSource's EPS surprise falls below 0% in the report on 2026-08-20.
- P3Weak Growth Headwind
Trip ifRevenue growth stays below 3% YoY for 2 consecutive quarters.
- P4Negative Asymmetry Caps Add
Trip ifThe risk-adjusted asymmetry ratio stays below -0.5 for 2 consecutive quarters.