Value
8.1/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 3.5 |
| P/S | 10.0 |
| EV/EBITDA | 9.4 |
| Fwd P/E | 7.7 |
| PEG | 10.0 |
| Analyst target | 7.5 |
- ▸Forward P/E: 16.0x
- ▸PEG: 0.13
- ▸Attractively valued
EMBJ · Why this verdict
Why Embraer (EMBJ) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score6.0/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Embraer shows a compelling combination of high growth scores and an attractive valuation — PEG of 0.13, a forward P/E of 16.0 times, and 18.2% upside to the consensus target — but quarterly earnings delivery has alternated between beats and misses with a negative average surprise of roughly -14% over four quarters, free cash flow is negative, and business quality sits below the minimum threshold, making this a setup that warrants monitoring before committing fresh capital.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Free cash flow is negative relative to net income — noted as a red flag in quality — and overall business quality sits below the minimum investment threshold despite a solid Piotroski F-Score of 7 out of 9, reflecting weakness concentrated in margins and returns on capital. Quality breakdown | Free cash flow turning positive for 2 consecutive quarters and quality score rising above 4.0, indicating the financial quality gap has closed. | →Stable |
| CounterA Piotroski score of 7 out of 9 indicates solid financial health across many balance sheet dimensions; the quality shortfall may be concentrated in near-term margin metrics rather than reflecting broad structural deterioration. | ||
Both revenue and earnings growth dimensions carry high scores, indicating the business is expanding meaningfully on the top and bottom lines — consistent with a company in an accelerating phase of its operating cycle. Growth | Revenue and earnings growth dimensions remaining in the upper half of their respective score ranges for two consecutive quarters, confirming the expansion trend is intact. | →Stable |
| CounterThe two most recent quarterly earnings results were both misses, suggesting realized growth in recent periods has fallen short of expectations even as trailing growth scores remain elevated. | ||
The stock screens attractively valued with a PEG ratio of 0.13 — indicating growth is available at a meaningful discount to typical rates — a forward P/E of 16.0 times described as attractively valued, and an 18.2% gap to the consensus price target with analysts showing 31% upside on average. Valuation breakdown | Price advancing toward the $72.72 target within 12 months, driven by earnings delivery that narrows the gap between current levels and assessed fair value. | →Stable |
| CounterAn attractive valuation can persist for extended periods in industries subject to order-cycle volatility or delivery slippage; a rich multiple can linger absent a catalyst even when the headline numbers screen cheap. | ||
The most recent two quarters each produced earnings misses — the most recent by more than 35% — and the trailing four-quarter average surprise is negative at approximately -14%, indicating management has not demonstrated consistent ability to meet or beat analyst expectations in recent periods. Earnings | EPS surprise turning positive and averaging above 5% across the next two consecutive quarters, confirming the miss pattern has reversed. | →Stable |
| CounterThe two older quarters in the same period both beat estimates; one-quarter misses may reflect timing differences in deliveries or cost recognition rather than a sustained deterioration in execution capability. | ||
Free cash flow is negative relative to net income — noted as a red flag in quality — and overall business quality sits below the minimum investment threshold despite a solid Piotroski F-Score of 7 out of 9, reflecting weakness concentrated in margins and returns on capital.
→StableQuality breakdown
- Expectation
- Free cash flow turning positive for 2 consecutive quarters and quality score rising above 4.0, indicating the financial quality gap has closed.
CounterA Piotroski score of 7 out of 9 indicates solid financial health across many balance sheet dimensions; the quality shortfall may be concentrated in near-term margin metrics rather than reflecting broad structural deterioration.
Both revenue and earnings growth dimensions carry high scores, indicating the business is expanding meaningfully on the top and bottom lines — consistent with a company in an accelerating phase of its operating cycle.
→StableGrowth
- Expectation
- Revenue and earnings growth dimensions remaining in the upper half of their respective score ranges for two consecutive quarters, confirming the expansion trend is intact.
CounterThe two most recent quarterly earnings results were both misses, suggesting realized growth in recent periods has fallen short of expectations even as trailing growth scores remain elevated.
The stock screens attractively valued with a PEG ratio of 0.13 — indicating growth is available at a meaningful discount to typical rates — a forward P/E of 16.0 times described as attractively valued, and an 18.2% gap to the consensus price target with analysts showing 31% upside on average.
→StableValuation breakdown
- Expectation
- Price advancing toward the $72.72 target within 12 months, driven by earnings delivery that narrows the gap between current levels and assessed fair value.
CounterAn attractive valuation can persist for extended periods in industries subject to order-cycle volatility or delivery slippage; a rich multiple can linger absent a catalyst even when the headline numbers screen cheap.
The most recent two quarters each produced earnings misses — the most recent by more than 35% — and the trailing four-quarter average surprise is negative at approximately -14%, indicating management has not demonstrated consistent ability to meet or beat analyst expectations in recent periods.
→StableEarnings
- Expectation
- EPS surprise turning positive and averaging above 5% across the next two consecutive quarters, confirming the miss pattern has reversed.
CounterThe two older quarters in the same period both beat estimates; one-quarter misses may reflect timing differences in deliveries or cost recognition rather than a sustained deterioration in execution capability.
Per-dimension breakdown
Quality
3.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.9 |
| ROA | 2.2 |
| Gross margin | 0.0 |
| Op margin | 2.3 |
| Net margin | 2.0 |
| Current ratio | 5.4 |
| FCF quality | 0.0 |
| Moat | 5.6 |
| Piotroski F | 7.8 |
- ▸Earnings quality RED FLAG: -13% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
8.6/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 7.1 |
| EPS growth | 10.0 |
Momentum
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.1 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 7.2 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA but MA still rising (+0.4%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 8.6 |
| Price target | 8.5 |
| erm sentiment | 5.0 |
- ▸Analyst upside: 28%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
4.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 8.1 |
| quality rank | 3.6 |
| growth rank | 4.9 |
Technical
2.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.7 |
| support resistance | 0.5 |
| 52w position | 5.6 |
| gap | 5.0 |
Risk (lower is worse)
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.4 |
| days to cover | 10.0 |
| volatility | 3.5 |
| put call | 9.9 |
| implied vol | 5.7 |
| beta | 8.6 |
| debt equity | 6.3 |
Catalyst
3.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| dividend safety | 5.2 |
- ▸Earnings concerns: 2B/2M
- ▸Dividend: 127.0%
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (7)
- MOMENTUM:6.1>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:45d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:1.1<1.5@spot
Warning (0)
none
Reward-to-Risk
1.05
Upside
+15.6%
Downside
14.8%
Sizing output
AVOID
SetupRECOVERY — Death cross but MACD improving, RSI 69
EdgeNO_EDGE — No clear edge identified
SuitabilityMODERATE — Balanced profile
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Growth at 8.6 could not lift the engine output above the verdict floor. Failed gate signal: ASYMMETRY:1.1<1.5@spot.
The strongest dimensions are Growth at 8.6, Value at 8.1, and Sentiment at 7.6; the weakest are Technical at 2.9, Quality at 3.1, and Catalyst at 3.7. The V9 engine flagged 1 failed gate, 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.
- P1Both revenue and earnings growth dimensions carry high scores, indicating the business is expanding meaningfully on the top and bottom lines — consistent with a company in an accelerating phase of its operating cycle.
Trip ifEarnings per share falls below $0 for 2 consecutive quarters, signaling the strong revenue and earnings growth trajectory has reversed.
- P2The stock screens attractively valued with a PEG ratio of 0.13 — indicating growth is available at a meaningful discount to typical rates — a forward P/E of 16.0 times described as attractively valued, and an 18.2% gap to the consensus price target with analysts showing 31% upside on average.
Trip ifConsensus price target is revised downward such that upside to take profit falls below 5%.
- P3The most recent two quarters each produced earnings misses — the most recent by more than 35% — and the trailing four-quarter average surprise is negative at approximately -14%, indicating management has not demonstrated consistent ability to meet or beat analyst expectations in recent periods.
Trip ifEPS surprise averages above 5% across 2 consecutive quarters.
- P4Free cash flow is negative relative to net income — noted as a red flag in quality — and overall business quality sits below the minimum investment threshold despite a solid Piotroski F-Score of 7 out of 9, reflecting weakness concentrated in margins and returns on capital.
Trip ifFree cash flow rises above $0 for 2 consecutive quarters, indicating the business has begun converting its operating profitability into cash despite below-floor quality scores.