Value
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.1 |
| P/S | 7.8 |
| EV/EBITDA | 1.3 |
| Fwd P/E | 5.4 |
| PEG | 3.7 |
| Analyst target | 4.0 |
- ▸Forward P/E: 23.6x
- ▸PEG: 3.01
CHD · Why this verdict
Why Church & Dwight Company (CHD) 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 score4.9/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Church & Dwight has delivered four consecutive earnings beats and converts net income to free cash flow at a well above average rate, but the stock has already traded past its near-term price target with a negative risk/reward and a 24x forward earnings multiple, while heavy revenue concentration in U.S. markets and a narrow brand portfolio leaves limited margin for disappointment.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Free cash flow ran at 154% of net income last period — well above typical levels — indicating high-quality earnings that translate into real cash available for capital allocation beyond what the income statement shows. Quality breakdown | Free cash flow as a percentage of net income stays above 120% for the next four quarters, sustaining the cash quality signal. | →Stable |
| CounterAn above-100% free-cash-flow-to-net-income ratio can reflect favorable working capital timing or deferred reinvestment; if capital expenditure requirements increase to maintain the brand portfolio, conversion could normalize toward or below 100%. | ||
The company has beaten consensus earnings estimates in each of the last four consecutive quarters, with the two oldest quarters in the window delivering particularly strong surprises of 9.5% and 9.9%, demonstrating consistent and reliable delivery against expectations. Catalyst breakdown | The beat streak extends to 6 consecutive quarters with average EPS surprise above 5%. | →Stable |
| CounterThe most recent beat came in at just 2.2% and the next most recent at 3.0%, suggesting estimates have been well-calibrated; the streak may be driven more by conservative guidance discipline than by genuine operational outperformance. | ||
At a forward price-to-earnings of 24x and a PEG ratio of 3.07, the stock carries a full growth premium — and with the current price already above the near-term price target, the risk/reward has turned negative at minus 0.2-to-1. Valuation breakdown | The forward P/E compresses below 20x over the next 12 months through either a price pullback or accelerating earnings growth. | →Stable |
| CounterConsumer staples businesses with high earnings visibility can command durable premiums; a perfect beat streak and strong cash quality support a case that the multiple is at least partially justified by the quality of the underlying business. | ||
With 82% of revenue generated in the U.S. market and approximately 70% tied to seven core brands, the business is heavily exposed to a single geography and a narrow product portfolio, limiting the diversification buffers available if either the domestic market or any key brand comes under pressure. Bear case | International revenue rises to more than 25% of total, or the top-seven brand concentration falls below 65%, materially reducing the concentration risk. | →Stable |
| CounterHigh concentration in a category-leading brand portfolio can reflect strategic focus and pricing power rather than fragility; the U.S. bias may represent deliberate positioning in familiar, higher-margin markets rather than a structural vulnerability. | ||
Free cash flow ran at 154% of net income last period — well above typical levels — indicating high-quality earnings that translate into real cash available for capital allocation beyond what the income statement shows.
→StableQuality breakdown
- Expectation
- Free cash flow as a percentage of net income stays above 120% for the next four quarters, sustaining the cash quality signal.
CounterAn above-100% free-cash-flow-to-net-income ratio can reflect favorable working capital timing or deferred reinvestment; if capital expenditure requirements increase to maintain the brand portfolio, conversion could normalize toward or below 100%.
The company has beaten consensus earnings estimates in each of the last four consecutive quarters, with the two oldest quarters in the window delivering particularly strong surprises of 9.5% and 9.9%, demonstrating consistent and reliable delivery against expectations.
→StableCatalyst breakdown
- Expectation
- The beat streak extends to 6 consecutive quarters with average EPS surprise above 5%.
CounterThe most recent beat came in at just 2.2% and the next most recent at 3.0%, suggesting estimates have been well-calibrated; the streak may be driven more by conservative guidance discipline than by genuine operational outperformance.
At a forward price-to-earnings of 24x and a PEG ratio of 3.07, the stock carries a full growth premium — and with the current price already above the near-term price target, the risk/reward has turned negative at minus 0.2-to-1.
→StableValuation breakdown
- Expectation
- The forward P/E compresses below 20x over the next 12 months through either a price pullback or accelerating earnings growth.
CounterConsumer staples businesses with high earnings visibility can command durable premiums; a perfect beat streak and strong cash quality support a case that the multiple is at least partially justified by the quality of the underlying business.
With 82% of revenue generated in the U.S. market and approximately 70% tied to seven core brands, the business is heavily exposed to a single geography and a narrow product portfolio, limiting the diversification buffers available if either the domestic market or any key brand comes under pressure.
→StableBear case
- Expectation
- International revenue rises to more than 25% of total, or the top-seven brand concentration falls below 65%, materially reducing the concentration risk.
CounterHigh concentration in a category-leading brand portfolio can reflect strategic focus and pricing power rather than fragility; the U.S. bias may represent deliberate positioning in familiar, higher-margin markets rather than a structural vulnerability.
Per-dimension breakdown
Quality
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.6 |
| ROA | 5.4 |
| Gross margin | 5.1 |
| Op margin | 8.1 |
| Net margin | 5.9 |
| Current ratio | 4.7 |
| FCF quality | 10.0 |
| Moat | 5.8 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 154% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
2.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.5 |
| EPS growth | 2.4 |
Momentum
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 3.7 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 2.7 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.5 |
| Price target | 5.6 |
| erm sentiment | 5.0 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Insider selling (low materiality) — $3,675,121 (0.016% of mkt cap)
Peer rank
3.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.8 |
| quality rank | 6.2 |
| growth rank | 2.5 |
Technical
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.7 |
| support resistance | 1.9 |
| 52w position | 8.7 |
Risk (lower is worse)
7.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.4 |
| days to cover | 5.5 |
| volatility | 6.5 |
| put call | 10.0 |
| implied vol | 8.0 |
| beta | 10.0 |
| debt equity | 7.6 |
- ▸Concentration risks: 3 HIGH, 2 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 5.6 |
| dividend safety | 6.5 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 127.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:37d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:4.3<4.5
- ASYMMETRY:-1.1=NEGATIVE
Warning (0)
none
Reward-to-Risk
-1.05
Upside
-6.5%
Downside
6.2%
Sizing output
AVOID
SetupUNKNOWN — No clear chart pattern; technical signals are mixed
EdgeNO_EDGE — No clear edge identified
SuitabilityMODERATE — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 4.9 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Risk (lower is worse) at 7.9) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:4.3<4.5, ASYMMETRY:-1.1=NEGATIVE) reinforce the read. Current asymmetry R:R is -1.05 — supplementary context, not the trigger for this path.
The strongest dimensions are Risk (lower is worse) at 7.9, Quality at 6.6, and Catalyst at 6.4; the weakest are Growth at 2.5, Peer rank at 3.9, and Technical at 4.1. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -1.05 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1The company has beaten consensus earnings estimates in each of the last four consecutive quarters, with the two oldest quarters in the window delivering particularly strong surprises of 9.5% and 9.9%, demonstrating consistent and reliable delivery against expectations.
Trip ifEPS surprise falls below 0% for 2 consecutive quarters, ending the beat streak.
- P2Free cash flow ran at 154% of net income last period — well above typical levels — indicating high-quality earnings that translate into real cash available for capital allocation beyond what the income statement shows.
Trip ifFree cash flow as a percentage of net income falls below 100% for 2 consecutive quarters.
- P3At a forward price-to-earnings of 24x and a PEG ratio of 3.07, the stock carries a full growth premium — and with the current price already above the near-term price target, the risk/reward has turned negative at minus 0.2-to-1.
Trip ifForward P/E compresses below 18x, restoring an attractive valuation entry point.
- P4With 82% of revenue generated in the U.S. market and approximately 70% tied to seven core brands, the business is heavily exposed to a single geography and a narrow product portfolio, limiting the diversification buffers available if either the domestic market or any key brand comes under pressure.
Trip ifU.S. revenue concentration falls below 75% of total for 2 consecutive annual periods, indicating meaningful geographic diversification.