Value
7.8/10data confidence 40%| Component | Sub-score |
|---|---|
| P/S | 9.8 |
| EV/EBITDA | 5.7 |
- ▸Attractively valued
SMC · Why this verdict
Why Summit Midstream (SMC) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.3/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Summit Midstream offers an attractive engine-calculated risk/reward setup and constructive technical momentum, but weak quality metrics, a rich valuation multiple, and recent insider selling introduce real downside risk.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The business shows no competitive moat and carries quality concerns despite near-breakeven free cash flow. Quality breakdown | The quality score should improve within 12 months if the underlying business strengthens. | ↓Deteriorating |
| CounterMidstream businesses often carry stable contracted cash flows that don't require a traditional moat to be resilient. | ||
The engine calculates a 5.97x asymmetry ratio, with 39.8% upside against a 6.7% downside to the stop. Reward-to-risk math | Price should progress toward the $41.65 take-profit target over 12 months if the setup plays out. | ↓Deteriorating |
| CounterEnergy midstream small caps carry commodity and financing risk that can override technical asymmetry. | ||
The stock trades at a 24.8x forward P/E but an extremely low 0.15 PEG ratio, with analyst upside of 64%. Valuation breakdown | The PEG ratio should stay low while price appreciates toward analyst targets. | →Stable |
| CounterA low PEG based on volatile forward earnings growth estimates for a small midstream name can be unreliable. | ||
Price is above its 200-day moving average with rising on-balance volume, indicating accumulation. Momentum breakdown | Momentum should remain constructive with price holding above the 200-day moving average over the next 2 quarters. | ↓Deteriorating |
| CounterRising volume without a corresponding earnings quality improvement can reflect speculative rather than fundamentally-driven buying. | ||
Insiders have been net sellers over the trailing 90 days, totaling $320,000, a bearish signal contrasting the technical setup. Insider | The insider signal should turn neutral if buying resumes at current levels. | ↑Improving |
| CounterA sale representing 0.078% of market cap is minor and may not be indicative of broader insider sentiment. | ||
The business shows no competitive moat and carries quality concerns despite near-breakeven free cash flow.
↓DeterioratingQuality breakdown
- Expectation
- The quality score should improve within 12 months if the underlying business strengthens.
CounterMidstream businesses often carry stable contracted cash flows that don't require a traditional moat to be resilient.
The engine calculates a 5.97x asymmetry ratio, with 39.8% upside against a 6.7% downside to the stop.
↓DeterioratingReward-to-risk math
- Expectation
- Price should progress toward the $41.65 take-profit target over 12 months if the setup plays out.
CounterEnergy midstream small caps carry commodity and financing risk that can override technical asymmetry.
The stock trades at a 24.8x forward P/E but an extremely low 0.15 PEG ratio, with analyst upside of 64%.
→StableValuation breakdown
- Expectation
- The PEG ratio should stay low while price appreciates toward analyst targets.
CounterA low PEG based on volatile forward earnings growth estimates for a small midstream name can be unreliable.
Price is above its 200-day moving average with rising on-balance volume, indicating accumulation.
↓DeterioratingMomentum breakdown
- Expectation
- Momentum should remain constructive with price holding above the 200-day moving average over the next 2 quarters.
CounterRising volume without a corresponding earnings quality improvement can reflect speculative rather than fundamentally-driven buying.
Insiders have been net sellers over the trailing 90 days, totaling $320,000, a bearish signal contrasting the technical setup.
↑ImprovingInsider
- Expectation
- The insider signal should turn neutral if buying resumes at current levels.
CounterA sale representing 0.078% of market cap is minor and may not be indicative of broader insider sentiment.
Per-dimension breakdown
Quality
3.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 1.6 |
| Gross margin | 5.0 |
| Op margin | 6.6 |
| Net margin | 0.0 |
| Current ratio | 3.8 |
| FCF quality | 0.0 |
| Moat | 5.0 |
| Piotroski F | 6.7 |
- ▸Cash-burning: FCF -1% of revenue
- ▸No competitive moat
Growth
5.2/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 5.2 |
Momentum
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.2 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 0.4 |
- ▸Overbought (RSI 76)
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.4 |
| Price target | 9.0 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (2.0) — signal dampened
- ▸Analyst upside: 36%
Insider
6.2/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 6.7 |
| notable moves | 7.0 |
- ▸Insider selling (low materiality) — $77,272 (0.016% of mkt cap)
Peer rank
3.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 8.6 |
| quality rank | 0.3 |
| growth rank | 1.7 |
Technical
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.9 |
| support resistance | 2.6 |
| 52w position | 9.0 |
Risk (lower is worse)
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.5 |
| days to cover | 4.3 |
| volatility | 3.2 |
| put call | 10.0 |
| implied vol | 5.6 |
| beta | 8.6 |
| debt equity | 4.3 |
Catalyst
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (7)
- MOMENTUM:4.9>=4.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:81d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:1.0<1.5@spot
Warning (1)
- MOMENTUM:4.9<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
1.03
Upside
+15.5%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeInst Constrain — Small cap ($0.5B) below institutional reach
SuitabilityAggressive — MCap $0.5B<$5B
Investment implication
The SELL_IF_HOLDING verdict reflects the ASYMMETRY gate's 1.0<1.5@spot outcome against Value at 7.8 and asymmetric R:R of 1.03.
The strongest dimensions are Value at 7.8, Sentiment at 6.9, and Risk (lower is worse) at 6.4; the weakest are Quality at 3.2, Peer rank at 3.8, and Catalyst at 3.9. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 1.03 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Favorable Risk Reward Asymmetry
Trip ifPrice falls below the $27.82 stop-loss, invalidating the 5.97x asymmetry setup.
- P2Cheap Valuation Low Peg
Trip ifPEG ratio exceeds 1.0 as forward earnings growth estimates are revised down.
- P3Quality Concerns No Moat
Trip ifQuality score rises above 4.0, clearing the floor the engine currently flags as failing.
- P4Bullish Technical Momentum
Trip ifPrice falls below the 200-day moving average for more than 10 consecutive trading days, ending the current accumulation trend.
- P5Insider Selling Despite Bullish Setup
Trip ifInsider buying exceeds $300,000 over a rolling 90-day window, reversing the bearish signal.