Value
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.5 |
| P/S | 9.0 |
| EV/EBITDA | 3.2 |
| Fwd P/E | 6.5 |
| PEG | 10.0 |
| Analyst target | 6.0 |
- ▸Forward P/E: 19.7x
- ▸PEG: 0.01
TTEK · Why this verdict
Why Tetra Tech (TTEK) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.5/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Tetra Tech has a four-quarter earnings beat streak with a 10.7% average surprise and an attractive forward P/E of 16.3x with a PEG near zero, but a death cross with negative 3.7% moving average slope and declining revenue signal that the near-term technical environment requires patience before entry.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Tetra Tech has beaten analyst estimates in each of the last four quarters with an average surprise of 10.7%, including back-to-back beats of 11.6% and 13.2%, indicating consistent execution in engineering and construction project delivery. Earnings | The earnings beat streak extends to at least 6 consecutive quarters with average surprise remaining above 6%. | ↑Improving |
| CounterEngineering and construction revenues are highly project-dependent; a single contract delay or government spending freeze could break the beat streak abruptly. | ||
The stock trades at a forward P/E of 16.3x with a PEG ratio near zero, while delivering a return on equity of 26% and free cash flow conversion of 124% of net income, suggesting the market is undervaluing the durability of Tetra Tech's capital efficiency. Quality breakdown | Return on equity remains above 20% over the next 12 months, confirming the capital efficiency is sustainable. | →Stable |
| CounterA PEG near zero can reflect stale growth estimates or a one-time earnings spike rather than genuine structural undervaluation. | ||
The stock is below its 200-day moving average with the slope declining at negative 3.7% over 30 days and falling on-balance volume, triggering a death cross hard block that reflects sustained institutional selling despite improving fundamental momentum. Momentum breakdown | The stock closes above its 200-day moving average on above-average volume for at least 5 consecutive sessions within the next 4 months. | ↑Improving |
| CounterThe MACD is already improving from a low base, and RSI at 52 is not deeply oversold, suggesting the recovery setup may be closer than the death cross implies. | ||
Revenue has declined by 5% year over year, the worst growth reading in the assigned batch for an otherwise quality business, which questions whether the project pipeline is contracting or whether government and infrastructure clients are delaying awards. Growth breakdown | Revenue growth turns positive and exceeds 3% year over year within the next 2 reported quarters. | →Stable |
| CounterEngineering firms often see revenue lumpiness tied to multi-year contract cycles; a decline in one period can reverse sharply when a new contract phase begins. | ||
Tetra Tech has beaten analyst estimates in each of the last four quarters with an average surprise of 10.7%, including back-to-back beats of 11.6% and 13.2%, indicating consistent execution in engineering and construction project delivery.
↑ImprovingEarnings
- Expectation
- The earnings beat streak extends to at least 6 consecutive quarters with average surprise remaining above 6%.
CounterEngineering and construction revenues are highly project-dependent; a single contract delay or government spending freeze could break the beat streak abruptly.
The stock trades at a forward P/E of 16.3x with a PEG ratio near zero, while delivering a return on equity of 26% and free cash flow conversion of 124% of net income, suggesting the market is undervaluing the durability of Tetra Tech's capital efficiency.
→StableQuality breakdown
- Expectation
- Return on equity remains above 20% over the next 12 months, confirming the capital efficiency is sustainable.
CounterA PEG near zero can reflect stale growth estimates or a one-time earnings spike rather than genuine structural undervaluation.
The stock is below its 200-day moving average with the slope declining at negative 3.7% over 30 days and falling on-balance volume, triggering a death cross hard block that reflects sustained institutional selling despite improving fundamental momentum.
↑ImprovingMomentum breakdown
- Expectation
- The stock closes above its 200-day moving average on above-average volume for at least 5 consecutive sessions within the next 4 months.
CounterThe MACD is already improving from a low base, and RSI at 52 is not deeply oversold, suggesting the recovery setup may be closer than the death cross implies.
Revenue has declined by 5% year over year, the worst growth reading in the assigned batch for an otherwise quality business, which questions whether the project pipeline is contracting or whether government and infrastructure clients are delaying awards.
→StableGrowth breakdown
- Expectation
- Revenue growth turns positive and exceeds 3% year over year within the next 2 reported quarters.
CounterEngineering firms often see revenue lumpiness tied to multi-year contract cycles; a decline in one period can reverse sharply when a new contract phase begins.
Per-dimension breakdown
Quality
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 8.5 |
| ROA | 5.9 |
| Gross margin | 0.4 |
| Op margin | 5.0 |
| Net margin | 5.0 |
| Current ratio | 4.8 |
| FCF quality | 9.1 |
| Moat | 5.0 |
| Piotroski F | 6.7 |
- ▸Excellent ROE: 26%
- ▸Excellent cash conversion: 124% FCF/NI
- ▸No competitive moat
Growth
1.3/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 1.3 |
- ▸Declining revenue: -5%
Momentum
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 9.1 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 10.0 |
| vol acceleration | 2.6 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -2.0%/30d — confirmed downtrend
- ▸Volume surge (2.4x avg) on selloff
Sentiment
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 4.3 |
| Analyst rating | 6.6 |
| Price target | 7.9 |
- ▸Light analyst coverage (6.0) — signal dampened
- ▸Analyst upside: 22%
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Negligible insider buying — $50,179 (0.001% of mkt cap)
- ▸Institutions accumulating
Peer rank
4.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.9 |
| quality rank | 7.3 |
| growth rank | 0.6 |
Technical
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.3 |
| support resistance | 4.4 |
| 52w position | 5.1 |
| gap | 4.0 |
Risk (lower is worse)
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.4 |
| days to cover | 7.3 |
| volatility | 3.8 |
| put call | 10.0 |
| implied vol | 2.6 |
| beta | 7.5 |
| debt equity | 7.4 |
| news risk | 5.0 |
- ▸High IV: 64%
Catalyst
7.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| surprise avg | 7.0 |
| dividend safety | 8.5 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
- ▸Dividend aristocrat: 0.9% yield
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (5)
- MOMENTUM:7.0>=5.5
- INSIDER:OK
- EARNINGS_PROXIMITY:NO_DATE
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.6<1.5@spot
Warning (2)
- DEATH_CROSS:momentum=7.0>=5.0 recovering
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
0.60
Upside
+5.9%
Downside
9.8%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 59
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:7.0>=5.5. Top dim: Catalyst at 7.7; weakest: Growth at 1.3. No conviction either direction.
The strongest dimensions are Catalyst at 7.7, Insider at 7.3, and Value at 7.0; the weakest are Growth at 1.3, Technical at 4.0, and Peer rank at 4.9. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of 0.60 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Earnings Beat Streak Quality
Trip ifEPS surprise falls below 0% in at least 2 of the next 4 quarters.
- P2Attractive Valuation High Roe
Trip ifReturn on equity falls below 15% for at least 2 consecutive quarters.
- P3Death Cross Downtrend Block
Trip ifStock price drops below $25, more than 10% below the current $28.00, accelerating the downtrend.
- P4Revenue Decline Risk
Trip ifRevenue declines by more than 8% year over year in any reported period over the next 12 months.