Value
4.0/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 3.6 |
| P/S | 2.9 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 3.6 |
| PEG | 6.7 |
- ▸Forward P/E: 31.9x
- ▸PEG: 1.08
UI · Why this verdict
Why Ubiquiti (UI) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictBUY WAIT
Overall score5.8/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Two high-severity concentration risks — dependence on a limited number of suppliers for key components and majority of revenue outside the United States — cap the maximum position size and represent material tail risks if either supply chain or geographic exposure deteriorates. Bear case | No supply disruption or significant geographic revenue shift materializes over 12 months, allowing the concentration risk discount to remain a sizing consideration rather than an active loss event | →Stable |
| CounterUbiquiti has operated with these concentration risks throughout its public history and has navigated prior supply chain disruptions, suggesting management has developed mitigations that the 10-K disclosures do not fully reflect | ||
Ubiquiti generates 115% return on equity and 30% operating margins, ranking at the top of its peer group on both quality and margin metrics with a peer quality rank of 9.5 out of 10 — reflecting an unusually capital-efficient business model for a communication equipment company. Quality breakdown | ROE stays above 100% and operating margins remain above 25% for the next 4 reported quarters, sustaining the quality advantage | →Stable |
| CounterThe high ROE is partly driven by leverage (debt-to-equity of 5.6) rather than purely operational excellence, and free cash flow represents only 58% of net income — a potential earnings quality concern | ||
Ubiquiti beat earnings estimates in 3 of the last 4 quarters with an average positive surprise of 23.4%, including a 58.7% beat in August 2025 and an 18.3% beat in November 2025, demonstrating consistent ability to outperform analyst forecasts. Earnings | Earnings beats continue in at least 2 of the next 4 quarters and the stock recovers toward the analyst price target of $702 within 12 months | →Stable |
| CounterThe most recent quarter (May 2026) was a miss of 9.5%, and weak momentum with falling OBV suggests institutional accumulation has stalled at current levels | ||
The momentum score of 3.7 fails the minimum threshold of 4.5, and on-balance volume is falling while the stock trades below its 200-day moving average, although the MA is still rising at 5.0% per 30 days — suggesting a pullback within a longer uptrend rather than a structural reversal. Momentum breakdown | Price recovers above the 200-day moving average within 6 months and OBV turns positive, confirming demand absorption | →Stable |
| CounterVolume distribution alongside a sub-MA price can precede extended periods of consolidation or further decline before the uptrend resumes, particularly with high short interest at 11% | ||
Two high-severity concentration risks — dependence on a limited number of suppliers for key components and majority of revenue outside the United States — cap the maximum position size and represent material tail risks if either supply chain or geographic exposure deteriorates.
→StableBear case
- Expectation
- No supply disruption or significant geographic revenue shift materializes over 12 months, allowing the concentration risk discount to remain a sizing consideration rather than an active loss event
CounterUbiquiti has operated with these concentration risks throughout its public history and has navigated prior supply chain disruptions, suggesting management has developed mitigations that the 10-K disclosures do not fully reflect
Ubiquiti generates 115% return on equity and 30% operating margins, ranking at the top of its peer group on both quality and margin metrics with a peer quality rank of 9.5 out of 10 — reflecting an unusually capital-efficient business model for a communication equipment company.
→StableQuality breakdown
- Expectation
- ROE stays above 100% and operating margins remain above 25% for the next 4 reported quarters, sustaining the quality advantage
CounterThe high ROE is partly driven by leverage (debt-to-equity of 5.6) rather than purely operational excellence, and free cash flow represents only 58% of net income — a potential earnings quality concern
Ubiquiti beat earnings estimates in 3 of the last 4 quarters with an average positive surprise of 23.4%, including a 58.7% beat in August 2025 and an 18.3% beat in November 2025, demonstrating consistent ability to outperform analyst forecasts.
→StableEarnings
- Expectation
- Earnings beats continue in at least 2 of the next 4 quarters and the stock recovers toward the analyst price target of $702 within 12 months
CounterThe most recent quarter (May 2026) was a miss of 9.5%, and weak momentum with falling OBV suggests institutional accumulation has stalled at current levels
The momentum score of 3.7 fails the minimum threshold of 4.5, and on-balance volume is falling while the stock trades below its 200-day moving average, although the MA is still rising at 5.0% per 30 days — suggesting a pullback within a longer uptrend rather than a structural reversal.
→StableMomentum breakdown
- Expectation
- Price recovers above the 200-day moving average within 6 months and OBV turns positive, confirming demand absorption
CounterVolume distribution alongside a sub-MA price can precede extended periods of consolidation or further decline before the uptrend resumes, particularly with high short interest at 11%
TrendMatrix Research · core thesis
Engine thesis — one sentence
Ubiquiti delivers exceptional profitability with 115% ROE, 30% operating margins, and a Piotroski score of 7 out of 9, and has beaten earnings in 3 of the last 4 quarters with an average surprise of 23%, but the stock is in a momentum trough with falling volume and is trading below its 200-day moving average, making timing the entry the key challenge.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
8.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 10.0 |
| Gross margin | 5.2 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 9.4 |
| FCF quality | 4.5 |
| Moat | 6.8 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 115%
- ▸Strong margins: 30%
- ▸Earnings quality warning: 58% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
7.6/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 7.2 |
| EPS growth | 7.9 |
Momentum
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 2.2 |
| Volume | 3.0 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA but MA still rising (+2.6%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 8.0 |
| Analyst rating | 5.0 |
| Price target | 9.6 |
- ▸LLM news sentiment: +0.60 (n=1)
- ▸Analyst upside: 53%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.0 |
- ▸Negligible insider selling — $340,265 (0.001% of mkt cap)
Peer rank
4.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.9 |
| quality rank | 9.5 |
| growth rank | 4.7 |
- ▸Superior ROE vs peers
- ▸Best-in-class margins
Technical
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 10.0 |
| support resistance | 9.1 |
| 52w position | 0.0 |
Risk (lower is worse)
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 4.5 |
| days to cover | 7.5 |
| volatility | 0.2 |
| beta | 5.8 |
| debt equity | 0.0 |
- ▸Concentration risks: 2 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 5.2 |
| news activity | 5.0 |
- ▸Strong earnings: 3B/1M
- ▸Dividend: 58.0%
How the verdict was assembled
Engine trigger
Growth is cheap relative to earnings, but the technical setup has not yet produced a breakout above resistance (PEG 1.08, quality 8.2/10, growth 7.6/10).
Engine technical detail
verdict_path:
L4:PATH_C2_GARP_WAIT|ENTRY_STICKY:PRIOR_STILL_VIABLEPassed (7)
- ASYMMETRY:3.0>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:57d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- MOMENTUM:3.9<4.5
Warning (0)
none
Reward-to-Risk
3.02
Upside
+29.8%
Downside
9.8%
Sizing output
STARTER
Setup— — No clear chart pattern; technical signals are mixed
EdgeTemporary headwind — High quality (8.2) with weak momentum (3.9)
SuitabilityModerate — Balanced profile
Investment implication
The C-path quality+growth combination triggered the STRONG_BUY_WAIT verdict: quality 8.2 and growth 7.6 both clear their thresholds, with asymmetric R:R of 3.02 supporting the read.
The strongest dimensions are Quality at 8.2, Growth at 7.6, and Sentiment at 7.4; the weakest are Risk (lower is worse) at 3.6, Momentum at 3.9, and Value at 4.0. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of 3.02 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Ubiquiti generates 115% return on equity and 30% operating margins, ranking at the top of its peer group on both quality and margin metrics with a peer quality rank of 9.5 out of 10 — reflecting an unusually capital-efficient business model for a communication equipment company.
Trip ifOperating margin falls below 20% or ROE drops below 80% for 2 consecutive quarters
- P2Ubiquiti beat earnings estimates in 3 of the last 4 quarters with an average positive surprise of 23.4%, including a 58.7% beat in August 2025 and an 18.3% beat in November 2025, demonstrating consistent ability to outperform analyst forecasts.
Trip ifEPS surprise falls below 0% in at least 3 of the next 4 quarters
- P3The momentum score of 3.7 fails the minimum threshold of 4.5, and on-balance volume is falling while the stock trades below its 200-day moving average, although the MA is still rising at 5.0% per 30 days — suggesting a pullback within a longer uptrend rather than a structural reversal.
Trip ifPrice drops below $504 stop-loss level, more than 12% below the current $574.74
- P4Two high-severity concentration risks — dependence on a limited number of suppliers for key components and majority of revenue outside the United States — cap the maximum position size and represent material tail risks if either supply chain or geographic exposure deteriorates.
Trip ifA supplier disruption causes revenue to decline by more than 10% year-over-year in any single quarter