Value
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.5 |
| P/S | 8.1 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 6.8 |
| PEG | 10.0 |
| Analyst target | 9.0 |
- ▸Forward P/E: 18.8x
- ▸PEG: 0.44
VSEC · Why this verdict
Why VSE (VSEC) 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 score6.0/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
VSE Corporation is an aerospace and defense services company with a perfect 4-quarter earnings beat streak averaging 29.3% positive surprise, 27% revenue growth, and a breakout technical pattern with a golden cross — but the stock has only 10.8% upside to analyst targets and below-threshold near-term asymmetry, making it a hold rather than a new buy at current levels.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
VSE Corporation has beaten earnings estimates in all 4 of the last 4 quarters with an average positive surprise of 29.3%, including a 38.24% beat in Q2 2025 and a 31.41% beat in the most recent quarter — consistently delivering roughly one-third more earnings than consensus expectations. Catalyst breakdown | Earnings per share should continue to beat consensus estimates in at least 3 of the next 4 quarters, with the positive surprise percentage remaining above 15% on average. | ↑Improving |
| CounterA 29.3% average beat suggests systematic under-modeling by analysts rather than genuine outperformance; when consensus models are reset to reflect actual performance, the beat magnitude will narrow and could reverse. | ||
Revenue is growing at 27% year-over-year with a growth score of 9.6/10, placing VSE in the top tier of aerospace and defense services companies, supported by U.S. defense spending tailwinds and MRO (maintenance, repair, and overhaul) demand. Growth breakdown | Revenue growth should remain above 15% annually over the next 12 months, and the PEG ratio of 0.35 should compress toward 0.5 as earnings catch up with growth. | →Stable |
| CounterFree cash flow is only 222% of net income due to elevated working capital investment in a growth phase, and the low gross margin implies VSE is a services business with thin pricing power rather than a technology-enabled defense company. | ||
The stock is in a breakout pattern with a golden cross confirmed, trading above all moving averages with RSI at 65, bullish MACD, and rising OBV — all three momentum signals aligned positively at the same time. Chart pattern detection | The stock should remain above its 200-day moving average and sustain a price above $190 over the next 3 months, confirming the breakout is real rather than a false signal. | Tripped→Stable |
| CounterThe Bollinger band score of 0.0/10 indicates the stock is near or at the upper Bollinger band, which historically precedes a mean-reversion pullback rather than continued acceleration in a breakout. | ||
The put/call ratio of 1.70 combined with 88% implied volatility signals elevated options market uncertainty despite the positive momentum and earnings trajectory, suggesting sophisticated investors are hedging against downside even as the breakout pattern appears bullish. Key risks | The put/call ratio should decline below 1.20 within 6 months as earnings beats continue and options market uncertainty resolves in favor of the fundamental thesis. | →Stable |
| CounterAn elevated put/call ratio in a defense services stock undergoing a momentum breakout may reflect smart money hedging the run-up rather than directional bearishness, and options market activity alone is insufficient to invalidate strong fundamental momentum. | ||
VSE Corporation has beaten earnings estimates in all 4 of the last 4 quarters with an average positive surprise of 29.3%, including a 38.24% beat in Q2 2025 and a 31.41% beat in the most recent quarter — consistently delivering roughly one-third more earnings than consensus expectations.
↑ImprovingCatalyst breakdown
- Expectation
- Earnings per share should continue to beat consensus estimates in at least 3 of the next 4 quarters, with the positive surprise percentage remaining above 15% on average.
CounterA 29.3% average beat suggests systematic under-modeling by analysts rather than genuine outperformance; when consensus models are reset to reflect actual performance, the beat magnitude will narrow and could reverse.
Revenue is growing at 27% year-over-year with a growth score of 9.6/10, placing VSE in the top tier of aerospace and defense services companies, supported by U.S. defense spending tailwinds and MRO (maintenance, repair, and overhaul) demand.
→StableGrowth breakdown
- Expectation
- Revenue growth should remain above 15% annually over the next 12 months, and the PEG ratio of 0.35 should compress toward 0.5 as earnings catch up with growth.
CounterFree cash flow is only 222% of net income due to elevated working capital investment in a growth phase, and the low gross margin implies VSE is a services business with thin pricing power rather than a technology-enabled defense company.
The stock is in a breakout pattern with a golden cross confirmed, trading above all moving averages with RSI at 65, bullish MACD, and rising OBV — all three momentum signals aligned positively at the same time.
Tripped→StableChart pattern detection
- Expectation
- The stock should remain above its 200-day moving average and sustain a price above $190 over the next 3 months, confirming the breakout is real rather than a false signal.
CounterThe Bollinger band score of 0.0/10 indicates the stock is near or at the upper Bollinger band, which historically precedes a mean-reversion pullback rather than continued acceleration in a breakout.
The put/call ratio of 1.70 combined with 88% implied volatility signals elevated options market uncertainty despite the positive momentum and earnings trajectory, suggesting sophisticated investors are hedging against downside even as the breakout pattern appears bullish.
→StableKey risks
- Expectation
- The put/call ratio should decline below 1.20 within 6 months as earnings beats continue and options market uncertainty resolves in favor of the fundamental thesis.
CounterAn elevated put/call ratio in a defense services stock undergoing a momentum breakout may reflect smart money hedging the run-up rather than directional bearishness, and options market activity alone is insufficient to invalidate strong fundamental momentum.
Per-dimension breakdown
Quality
3.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.4 |
| ROA | 2.3 |
| Gross margin | 0.0 |
| Op margin | 5.1 |
| Net margin | 2.8 |
| Current ratio | 9.2 |
| FCF quality | 0.0 |
| Moat | 5.6 |
| Piotroski F | 7.8 |
- ▸Earnings quality RED FLAG: -347% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
10.0/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
- ▸Strong growth: 65% YoY
Momentum
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 1.0 |
| Volume | 3.2 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -1.1%/30d — confirmed downtrend
Sentiment
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.0 |
| Analyst rating | 6.9 |
| Price target | 9.8 |
- ▸Light analyst coverage (9.0) — signal dampened
- ▸Analyst upside: 62%
Insider
3.4/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 2.0 |
| holder change | 5.5 |
| notable moves | 3.0 |
- ▸Notable insider selling — $4,537,148 (0.104% of mkt cap)
Peer rank
5.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.7 |
| quality rank | 3.5 |
| growth rank | 8.7 |
- ▸Industry growth leader
Technical
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 6.2 |
| support resistance | 5.6 |
| 52w position | 2.5 |
| gap | 5.0 |
Risk (lower is worse)
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 4.6 |
| days to cover | 4.5 |
| volatility | 0.0 |
| put call | 2.4 |
| implied vol | 1.6 |
| beta | 5.9 |
| debt equity | 8.6 |
| news risk | 6.0 |
- ▸Elevated put/call: 1.65
- ▸High IV: 71%
Catalyst
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 3.5 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 4.3 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
- ▸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 (6)
- MOMENTUM:5.5>=5.5
- ASYMMETRY:3.4>=1.5
- INSIDER:OK
- 8K:CLEAN
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- EARNINGS_PROXIMITY:5d<=7d
Warning (1)
- DEATH_CROSS:momentum=5.5>=5.0 recovering
Reward-to-Risk
3.35
Upside
+40.6%
Downside
12.1%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $4.4B<$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 3.35.
The strongest dimensions are Growth at 10.0, Sentiment at 7.1, and Catalyst at 6.8; the weakest are Insider at 3.4, Quality at 3.8, and Risk (lower is worse) at 4.2. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 3.35 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Consistent Large Earnings Beats
Trip ifEPS surprise falls below 0% in at least 3 of the next 4 quarters.
- P2Strong Revenue Growth 27pct
Trip ifRevenue growth falls below 10% year-over-year for 2 consecutive quarters, more than 17 percentage points below the current 27% growth rate.
- P3Golden Cross Breakout MomentumTripped
Trip ifStock price falls below $180, more than 9% below the current $198.55, closing below the 200-day moving average and invalidating the breakout.
- P4Elevated Put Call Caution
Trip ifPut/call ratio rises above 2.5 and implied volatility rises above 120%, indicating the options market is pricing a materially higher probability of near-term downside.