Value
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.9 |
| P/S | 7.4 |
| EV/EBITDA | 0.8 |
| Fwd P/E | 6.2 |
| PEG | 3.8 |
| Analyst target | 5.0 |
- ▸Forward P/E: 20.9x
- ▸PEG: 2.90
VLTO · Why this verdict
Why Veralto (VLTO) 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 score6.1/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Veralto Corp delivers four consecutive earnings beats and carries high-quality financial characteristics including a 36% return on equity and strong margins of 17%, but a confirmed price downtrend with the 200-day moving average declining at 3.1% per month and a death-cross technical signal block the near-term entry case.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
A return on equity of 36%, operating margins of 17%, and a Piotroski financial-strength score of 7 out of 9 categorize Veralto as a high-quality business with durable profitability characteristics in the pollution control and water treatment sector. Quality breakdown | Return on equity stays above 28% and operating margins remain above 14% over the next 12 months. | →Stable |
| CounterFree cash flow conversion is only 79% of net income, which is a warning flag suggesting reported earnings are somewhat ahead of actual cash generation. | ||
Veralto has beaten analyst earnings estimates in each of the four most recent quarters, with surprises ranging from 4% to 6% per quarter, demonstrating reliable if modest execution above consensus. Earnings | Earnings surprise stays positive in at least 3 of the next 4 reported quarters, maintaining the four-quarter beat streak. | ↑Improving |
| CounterThe beat magnitude is narrow at 4-6% per quarter, suggesting the company manages guidance tightly rather than demonstrating true operational outperformance that could accelerate. | ||
The 200-day moving average is declining at 3.1% per month, on-balance volume is falling, and a death-cross technical signal has been triggered, together confirming that price momentum is decisively negative in the near term. Momentum breakdown | The stock's 200-day moving average slope turns flat or positive and on-balance volume turns upward within 6 months. | ↑Improving |
| CounterDeath-cross signals in high-quality companies have historically been temporary; strong business fundamentals often pull price back above trend lines within 3 to 6 months. | ||
Analysts maintain price targets averaging 31% above the current price of $82.68, implying significant recovery potential if the technical headwinds abate and the earnings beat streak continues. Sentiment breakdown | Stock price rises above $97, more than 17% above the current level, within 18 months as momentum recovers. | ↓Deteriorating |
| CounterAnalyst targets may lag the technical deterioration; if momentum continues to worsen, price targets could be cut before the stock reaches them. | ||
A return on equity of 36%, operating margins of 17%, and a Piotroski financial-strength score of 7 out of 9 categorize Veralto as a high-quality business with durable profitability characteristics in the pollution control and water treatment sector.
→StableQuality breakdown
- Expectation
- Return on equity stays above 28% and operating margins remain above 14% over the next 12 months.
CounterFree cash flow conversion is only 79% of net income, which is a warning flag suggesting reported earnings are somewhat ahead of actual cash generation.
Veralto has beaten analyst earnings estimates in each of the four most recent quarters, with surprises ranging from 4% to 6% per quarter, demonstrating reliable if modest execution above consensus.
↑ImprovingEarnings
- Expectation
- Earnings surprise stays positive in at least 3 of the next 4 reported quarters, maintaining the four-quarter beat streak.
CounterThe beat magnitude is narrow at 4-6% per quarter, suggesting the company manages guidance tightly rather than demonstrating true operational outperformance that could accelerate.
The 200-day moving average is declining at 3.1% per month, on-balance volume is falling, and a death-cross technical signal has been triggered, together confirming that price momentum is decisively negative in the near term.
↑ImprovingMomentum breakdown
- Expectation
- The stock's 200-day moving average slope turns flat or positive and on-balance volume turns upward within 6 months.
CounterDeath-cross signals in high-quality companies have historically been temporary; strong business fundamentals often pull price back above trend lines within 3 to 6 months.
Analysts maintain price targets averaging 31% above the current price of $82.68, implying significant recovery potential if the technical headwinds abate and the earnings beat streak continues.
↓DeterioratingSentiment breakdown
- Expectation
- Stock price rises above $97, more than 17% above the current level, within 18 months as momentum recovers.
CounterAnalyst targets may lag the technical deterioration; if momentum continues to worsen, price targets could be cut before the stock reaches them.
Per-dimension breakdown
Quality
7.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 7.5 |
| Gross margin | 8.0 |
| Op margin | 9.5 |
| Net margin | 8.7 |
| Current ratio | 5.5 |
| FCF quality | 6.0 |
| Moat | 6.9 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 36%
- ▸Strong margins: 17%
- ▸Earnings quality warning: 79% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
4.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.2 |
| EPS growth | 4.7 |
Momentum
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 8.0 |
| Volume | 3.5 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.2 |
| Analyst rating | 7.4 |
| Price target | 7.0 |
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Negligible insider selling — $700,678 (0.003% of mkt cap)
- ▸Institutions accumulating
Peer rank
3.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.0 |
| quality rank | 7.9 |
| growth rank | 0.0 |
- ▸Superior ROE vs peers
Technical
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.2 |
| support resistance | 5.8 |
| 52w position | 7.3 |
| gap | 6.0 |
Risk (lower is worse)
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.4 |
| days to cover | 7.9 |
| volatility | 5.0 |
| put call | 10.0 |
| implied vol | 6.3 |
| beta | 8.3 |
| debt equity | 5.3 |
| news risk | 6.0 |
Catalyst
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 5.9 |
| dividend safety | 7.5 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
- ▸Dividend aristocrat: 0.6% yield
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more. | News modifier +2 (HOLD_IF_HOLDING → STRONG_BUY_WAIT).
Engine technical detail
verdict_path:
L4:PATH_F_HOLD|L3:NEWS_MOD=+2Passed (8)
- MOMENTUM:7.4>=5.5
- INSIDER:OK
- DEATH_CROSS:QUALITY_MOMENTUM_EXEMPT
- 8K:CLEAN
- NEWS_BOOST:ANALYST:0.70
- EARNINGS_PROXIMITY:83d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.5<1.5@spot
Warning (1)
- DEATH_CROSS:quality=7.8>=7.5+momentum=7.4>=5.0 exempted
Reward-to-Risk
0.45
Upside
+2.7%
Downside
6.0%
Sizing output
STARTER
SetupMomentum Cont — Trend continuation, RSI 55, MACD bullish
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:7.4>=5.5. Top dim: Quality at 7.8; weakest: Peer rank at 3.6. No conviction either direction.
The strongest dimensions are Quality at 7.8, Momentum at 7.4, and Insider at 7.3; the weakest are Peer rank at 3.6, Growth at 4.5, and Value at 4.7. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 0.45 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Consistent Earnings Beat Streak
Trip ifEarnings surprise falls below 0% in at least 2 of the next 4 quarters, ending the beat streak.
- P2High Quality Business Returns
Trip ifReturn on equity drops below 22% in any reported quarter over the next 12 months.
- P3Confirmed Price Downtrend Risk
Trip ifStock price drops below $70, more than 15% below the current $82.68, while the 200-day moving average continues declining.
- P4Analyst Upside At 31 Pct
Trip ifAnalyst consensus price target falls below $88, representing a 10% cut from the current implied target, reflecting broad estimate reductions.