Value
6.9/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 6.6 |
| P/S | 8.6 |
| EV/EBITDA | 4.7 |
| Fwd P/E | 8.3 |
| PEG | 5.9 |
- ▸Forward P/E: 14.2x
- ▸PEG: 1.27
BRC · Why this verdict
Why Brady (BRC) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.9/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Brady Corporation demonstrates genuine business quality — a Piotroski F-Score of 8 out of 9 and a consistent earnings beat record — but the stock has moved to within 2% of the analyst consensus target with 13.4% downside, producing a reward-to-risk ratio of 0.29 that makes current-price entry unattractive regardless of underlying fundamentals.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
A Piotroski F-Score of 8 out of 9 reflects strong asset productivity, improving margins, positive momentum in financial health, and solid liquidity — multiple signals firing simultaneously that the business is operationally disciplined and financially sound. Quality breakdown | Piotroski F-Score remains at 7 or above and free cash flow conversion improves above 80% of net income over the next 12 months. | →Stable |
| CounterFree cash flow converts at only 70% of reported net income — an earnings quality flag suggesting reported profits may be running ahead of true cash generation, which limits confidence in the quality score's durability. | ||
With a debt-to-equity ratio of 6.6, the capital structure carries meaningful financial leverage — explicitly penalizing the investment thesis — and amplifies downside risk in any scenario where revenue or margins disappoint. Bear case | The debt-to-equity ratio declines below 4.0 through earnings retention or debt repayment over the next 24 months. | →Stable |
| CounterThe strong Piotroski F-Score and consistent earnings generation suggest the leverage is comfortably serviced at current earnings levels, substantially reducing near-term financial distress risk. | ||
The stock sits within 2% of its analyst consensus target with 13.4% downside to technical support — a reward-to-risk ratio of 0.29 — offering no meaningful margin of safety for a new position regardless of underlying business quality. Price targets | Analyst consensus price target rises at least 15% driven by earnings upgrades, restoring upside above 15% and a reward-to-risk ratio above 1.5. | →Stable |
| CounterIf the next earnings catalyst delivers another double-digit surprise and the elevated put/call ratio begins to unwind, analyst targets may be revised swiftly enough to reopen the upside geometry sooner than the current setup implies. | ||
The company beat consensus estimates in three of the last four quarters — with the most recent quarter delivering an 11.5% positive earnings surprise, the strongest beat in the recent track record — after an inline result in the second-most-recent quarter. Catalyst breakdown | EPS beats continue for at least two more consecutive quarters, sustaining the delivery track record through the next earnings cycle. | →Stable |
| CounterWith the stock already at the analyst consensus target, future beats may drive incremental upward revisions in estimates but insufficient price appreciation to create a favorable entry for new capital. | ||
A Piotroski F-Score of 8 out of 9 reflects strong asset productivity, improving margins, positive momentum in financial health, and solid liquidity — multiple signals firing simultaneously that the business is operationally disciplined and financially sound.
→StableQuality breakdown
- Expectation
- Piotroski F-Score remains at 7 or above and free cash flow conversion improves above 80% of net income over the next 12 months.
CounterFree cash flow converts at only 70% of reported net income — an earnings quality flag suggesting reported profits may be running ahead of true cash generation, which limits confidence in the quality score's durability.
With a debt-to-equity ratio of 6.6, the capital structure carries meaningful financial leverage — explicitly penalizing the investment thesis — and amplifies downside risk in any scenario where revenue or margins disappoint.
→StableBear case
- Expectation
- The debt-to-equity ratio declines below 4.0 through earnings retention or debt repayment over the next 24 months.
CounterThe strong Piotroski F-Score and consistent earnings generation suggest the leverage is comfortably serviced at current earnings levels, substantially reducing near-term financial distress risk.
The stock sits within 2% of its analyst consensus target with 13.4% downside to technical support — a reward-to-risk ratio of 0.29 — offering no meaningful margin of safety for a new position regardless of underlying business quality.
→StablePrice targets
- Expectation
- Analyst consensus price target rises at least 15% driven by earnings upgrades, restoring upside above 15% and a reward-to-risk ratio above 1.5.
CounterIf the next earnings catalyst delivers another double-digit surprise and the elevated put/call ratio begins to unwind, analyst targets may be revised swiftly enough to reopen the upside geometry sooner than the current setup implies.
The company beat consensus estimates in three of the last four quarters — with the most recent quarter delivering an 11.5% positive earnings surprise, the strongest beat in the recent track record — after an inline result in the second-most-recent quarter.
→StableCatalyst breakdown
- Expectation
- EPS beats continue for at least two more consecutive quarters, sustaining the delivery track record through the next earnings cycle.
CounterWith the stock already at the analyst consensus target, future beats may drive incremental upward revisions in estimates but insufficient price appreciation to create a favorable entry for new capital.
Per-dimension breakdown
Quality
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.6 |
| ROA | 6.9 |
| Gross margin | 6.3 |
| Op margin | 7.1 |
| Net margin | 6.5 |
| Current ratio | 7.0 |
| FCF quality | 5.3 |
| Moat | 6.9 |
| Piotroski F | 8.9 |
- ▸Earnings quality warning: 70% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
5.1/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.9 |
| EPS growth | 4.2 |
Momentum
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.4 |
| Price target | 7.2 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (2.0) — signal dampened
Insider
5.8/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 6.5 |
| holder change | 5.1 |
- ▸Modest insider buying — $1,000,025 (0.024% of mkt cap)
Peer rank
4.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.4 |
| quality rank | 3.1 |
| growth rank | 6.3 |
Technical
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.1 |
| support resistance | 1.9 |
| 52w position | 7.7 |
Risk (lower is worse)
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.1 |
| days to cover | 8.7 |
| volatility | 1.8 |
| put call | 0.0 |
| implied vol | 5.8 |
| beta | 9.3 |
| debt equity | 0.0 |
- ▸Elevated put/call: 2.33
Catalyst
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 5.0 |
| dividend safety | 5.2 |
- ▸Strong earnings: 3B/0M
- ▸Dividend: 113.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:6.9>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:70d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.1=NEGATIVE
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.10
Upside
-1.6%
Downside
15.0%
Sizing output
AVOID
SetupBREAKOUT — Golden cross, above all MAs, RSI 49, MACD bullish
EdgeNO_EDGE — No clear edge identified
SuitabilityAGGRESSIVE — MCap $4.1B<$5B
Investment implication
The F-path SELL output reflects an overall score of 4.4 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 6.9) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.1=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.10 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 6.9, Momentum at 6.9, and Quality at 6.7; the weakest are Technical at 4.2, Peer rank at 4.7, and Risk (lower is worse) at 5.0. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.10 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1A Piotroski F-Score of 8 out of 9 reflects strong asset productivity, improving margins, positive momentum in financial health, and solid liquidity — multiple signals firing simultaneously that the business is operationally disciplined and financially sound.
Trip ifPiotroski F-Score falls below 6 for 2 consecutive annual periods.
- P2The company beat consensus estimates in three of the last four quarters — with the most recent quarter delivering an 11.5% positive earnings surprise, the strongest beat in the recent track record — after an inline result in the second-most-recent quarter.
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P3With a debt-to-equity ratio of 6.6, the capital structure carries meaningful financial leverage — explicitly penalizing the investment thesis — and amplifies downside risk in any scenario where revenue or margins disappoint.
Trip ifNet debt-to-EBITDA exceeds 4x for 2 consecutive quarters.
- P4The stock sits within 2% of its analyst consensus target with 13.4% downside to technical support — a reward-to-risk ratio of 0.29 — offering no meaningful margin of safety for a new position regardless of underlying business quality.
Trip ifAnalyst consensus price target rises more than 15% from current levels, restoring a reward-to-risk ratio above 1.5.