Value
8.5/10data confidence 83%| Component | Sub-score |
|---|---|
| P/S | 9.0 |
| EV/EBITDA | 7.1 |
| Fwd P/E | 9.1 |
| PEG | 10.0 |
| Analyst target | 7.5 |
- ▸Forward P/E: 11.1x
- ▸PEG: 0.04
- ▸Attractively valued
TXO · Why this verdict
Why TXO Partners (TXO) 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 score6.6/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
TXO Partners is a fast-growing oil and gas partnership (68% revenue growth) with heavy insider buying and 18.3% analyst upside, but cash burn, weak quality (3.8/10), falling momentum and a yield-trap warning limit conviction.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Momentum is negative with falling on-balance volume, and operations are concentrated in the Permian, San Juan and Williston Basins, rated a high-severity risk. Bear case | On-balance volume turns upward and the momentum score rises above 4.5 from 3.8. | ↑Improving |
| CounterPrice is still above the 200-day average, so the momentum weakness may be a short pause in an uptrend. | ||
Revenue is growing 68% year over year and TXO is an industry growth leader, with both revenue and earnings growth scoring 10 out of 10. Growth breakdown | Revenue growth stays above 25% YoY over the next 12 months. | →Stable |
| CounterGrowth of 68% likely reflects acquisitions or a low base and is unlikely to repeat; growth confidence is only 0.67. | ||
Insiders have bought $5.6M of stock, equal to 0.717% of market cap, a strong conviction signal. Insider breakdown | Insider buying persists with no significant insider selling over the next 12 months. | →Stable |
| CounterInsider buys in a small partnership may reflect a controlling-owner strategy rather than informed timing, and holder-change scores only 2.9. | ||
Quality is below the minimum bar at 3.8 out of 10, with free cash flow at -22% of revenue and ROE and net margin components at 0. Quality breakdown | Free cash flow turns positive and the quality score rises above 4.5 within 12 months. | →Stable |
| CounterCash burn may be growth investment in wells, but combined with a yield-trap warning it undermines distribution safety. | ||
The $16.79 analyst target is 18.3% above the $14.19 price against 5.3% downside, a reward-to-risk of about 3.4. Targets | Price moves toward the analyst target as the earnings report in 10 days confirms the 3-of-4 beat record. | →Stable |
| CounterOnly 4 analysts cover the stock and the signal is dampened, while distribution of volume (falling OBV) suggests sellers. | ||
Momentum is negative with falling on-balance volume, and operations are concentrated in the Permian, San Juan and Williston Basins, rated a high-severity risk.
↑ImprovingBear case
- Expectation
- On-balance volume turns upward and the momentum score rises above 4.5 from 3.8.
CounterPrice is still above the 200-day average, so the momentum weakness may be a short pause in an uptrend.
Revenue is growing 68% year over year and TXO is an industry growth leader, with both revenue and earnings growth scoring 10 out of 10.
→StableGrowth breakdown
- Expectation
- Revenue growth stays above 25% YoY over the next 12 months.
CounterGrowth of 68% likely reflects acquisitions or a low base and is unlikely to repeat; growth confidence is only 0.67.
Insiders have bought $5.6M of stock, equal to 0.717% of market cap, a strong conviction signal.
→StableInsider breakdown
- Expectation
- Insider buying persists with no significant insider selling over the next 12 months.
CounterInsider buys in a small partnership may reflect a controlling-owner strategy rather than informed timing, and holder-change scores only 2.9.
Quality is below the minimum bar at 3.8 out of 10, with free cash flow at -22% of revenue and ROE and net margin components at 0.
→StableQuality breakdown
- Expectation
- Free cash flow turns positive and the quality score rises above 4.5 within 12 months.
CounterCash burn may be growth investment in wells, but combined with a yield-trap warning it undermines distribution safety.
The $16.79 analyst target is 18.3% above the $14.19 price against 5.3% downside, a reward-to-risk of about 3.4.
→StableTargets
- Expectation
- Price moves toward the analyst target as the earnings report in 10 days confirms the 3-of-4 beat record.
CounterOnly 4 analysts cover the stock and the signal is dampened, while distribution of volume (falling OBV) suggests sellers.
Per-dimension breakdown
Quality
3.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.0 |
| Gross margin | 6.6 |
| Op margin | 10.0 |
| Net margin | 0.0 |
| Current ratio | 4.2 |
| FCF quality | 0.0 |
| Moat | 6.5 |
| Piotroski F | 6.7 |
- ▸Cash-burning: FCF -22% of revenue
Growth
10.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 10.0 |
- ▸Strong growth: 68% YoY
Momentum
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 6.6 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 2.8 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.1 |
| Price target | 9.0 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (4.0) — signal dampened
- ▸Analyst upside: 37%
Insider
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 9.0 |
| insider conviction | 8.0 |
| holder change | 2.9 |
| notable moves | 3.0 |
- ▸Heavy insider buying — $5,638,175 (0.703% of mkt cap)
Peer rank
5.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.3 |
| quality rank | 1.6 |
| growth rank | 8.5 |
- ▸Industry growth leader
Technical
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.4 |
| support resistance | 2.6 |
| 52w position | 8.6 |
Risk (lower is worse)
7.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.5 |
| days to cover | 7.9 |
| volatility | 5.6 |
| put call | 9.8 |
| implied vol | 3.0 |
| beta | 10.0 |
| debt equity | 8.3 |
- ▸High IV: 62%
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| dividend safety | 3.0 |
- ▸Strong earnings: 3B/1M
- ▸Earnings in 5 days
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (7)
- MOMENTUM:6.8>=5.5
- ASYMMETRY:2.6>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- EARNINGS_PROXIMITY:5d<=7d
Warning (0)
none
Reward-to-Risk
2.56
Upside
+16.1%
Downside
6.3%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 54, MACD bullish
EdgeInst Constrain — Small cap ($0.8B) below institutional reach
SuitabilityAggressive — MCap $0.8B<$5B
Investment implication
The SELL_IF_HOLDING verdict reflects the EARNINGS_PROXIMITY gate's 5d<=7d outcome against Growth at 10.0 and asymmetric R:R of 2.56.
The strongest dimensions are Growth at 10.0, Value at 8.5, and Risk (lower is worse) at 7.7; the weakest are Quality at 3.8, Catalyst at 3.9, and Technical at 4.2. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of 2.56 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Strong Revenue Growth
Trip ifRevenue growth falls below 25% YoY from the current 68%.
- P2Heavy Insider Buying
Trip ifInsiders become net sellers with sales exceeding $1M over 90 days.
- P3Cash Burn Weak Quality
Trip ifFree cash flow stays below -10% of revenue for 2 consecutive quarters.
- P4Analyst Upside With Light Coverage
Trip ifPrice falls more than 5.3% to the $13.43 stop level.
- P5Negative Momentum Concentration Risk
Trip ifPrice closes below the 200-day moving average while momentum falls below 3.0.