Value
7.7/10data confidence 83%| Component | Sub-score |
|---|---|
| P/S | 9.6 |
| EV/EBITDA | 1.4 |
| Fwd P/E | 10.0 |
| PEG | 10.0 |
| Analyst target | 7.5 |
- ▸Forward P/E: 4.9x
- ▸PEG: 0.00
- ▸Attractively valued
EQH · Why this verdict
Why Equitable Holdings (EQH) 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 score4.1/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Equitable Holdings screens attractively on valuation — with a forward price-to-earnings of 5.1 times and a near-zero price-to-growth ratio — and shows improving price momentum, but the business is generating deeply negative free cash flow equivalent to 82% of revenue, revenue is declining at 8% year-over-year, and three of the last four earnings reports have missed estimates, making the cheap multiple more likely a value trap than an opportunity.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
At a forward price-to-earnings of 5.1 times and a price-to-earnings-to-growth ratio near zero, the stock screens as inexpensive relative to its earnings trajectory, offering meaningful upside if earnings delivery stabilizes. Value | Forward price-to-earnings expands above 8 times as earnings misses abate, implying material price appreciation from current levels. | →Stable |
| CounterA low multiple alongside declining revenue and negative free cash flow is more consistent with a deteriorating business than a mispriced one; the multiple can remain compressed indefinitely if fundamentals do not recover. | ||
Free cash flow is deeply negative, consuming resources equivalent to 82% of revenue, which means the business is not converting reported earnings into cash and raises serious questions about the sustainability of shareholder returns and growth investment. Quality | Free cash flow as a percentage of revenue improves from deeply negative toward breakeven over four consecutive quarters. | →Stable |
| CounterIf the negative free cash flow reflects a transitional period of heavy investment rather than a structural cost problem, it may normalize without damaging equity value — though no such explanation appears in the available data. | ||
The company has missed earnings estimates in three of the last four quarters — with individual misses of 0.9%, 8%, and 15%, reading most recent to oldest — yielding an average negative surprise of approximately 6% and indicating management forecasts have consistently overstated near-term earnings power. Earnings | EPS surprise turns positive above 0% for at least 2 consecutive quarters, signaling a reset in guidance discipline. | →Stable |
| CounterThe most recent quarter delivered a slim 0.7% positive surprise, which could mark a turning point if estimates have finally been reset low enough for the business to clear consistently. | ||
Price momentum has strengthened noticeably — with the RSI at 66, a bullish MACD crossover, rising on-balance volume, and the stock trading above its 200-day moving average — suggesting institutional accumulation is supporting the price despite weak underlying fundamentals. Momentum | RSI remains above 50 and on-balance volume continues rising for at least three consecutive months. | →Stable |
| CounterThe 200-day moving average slope is flat rather than rising, suggesting the momentum recovery may stall at current levels rather than build into a sustained uptrend. | ||
At a forward price-to-earnings of 5.1 times and a price-to-earnings-to-growth ratio near zero, the stock screens as inexpensive relative to its earnings trajectory, offering meaningful upside if earnings delivery stabilizes.
→StableValue
- Expectation
- Forward price-to-earnings expands above 8 times as earnings misses abate, implying material price appreciation from current levels.
CounterA low multiple alongside declining revenue and negative free cash flow is more consistent with a deteriorating business than a mispriced one; the multiple can remain compressed indefinitely if fundamentals do not recover.
Free cash flow is deeply negative, consuming resources equivalent to 82% of revenue, which means the business is not converting reported earnings into cash and raises serious questions about the sustainability of shareholder returns and growth investment.
→StableQuality
- Expectation
- Free cash flow as a percentage of revenue improves from deeply negative toward breakeven over four consecutive quarters.
CounterIf the negative free cash flow reflects a transitional period of heavy investment rather than a structural cost problem, it may normalize without damaging equity value — though no such explanation appears in the available data.
The company has missed earnings estimates in three of the last four quarters — with individual misses of 0.9%, 8%, and 15%, reading most recent to oldest — yielding an average negative surprise of approximately 6% and indicating management forecasts have consistently overstated near-term earnings power.
→StableEarnings
- Expectation
- EPS surprise turns positive above 0% for at least 2 consecutive quarters, signaling a reset in guidance discipline.
CounterThe most recent quarter delivered a slim 0.7% positive surprise, which could mark a turning point if estimates have finally been reset low enough for the business to clear consistently.
Price momentum has strengthened noticeably — with the RSI at 66, a bullish MACD crossover, rising on-balance volume, and the stock trading above its 200-day moving average — suggesting institutional accumulation is supporting the price despite weak underlying fundamentals.
→StableMomentum
- Expectation
- RSI remains above 50 and on-balance volume continues rising for at least three consecutive months.
CounterThe 200-day moving average slope is flat rather than rising, suggesting the momentum recovery may stall at current levels rather than build into a sustained uptrend.
Per-dimension breakdown
Quality
2.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.0 |
| Gross margin | 0.0 |
| Op margin | 9.0 |
| Net margin | 0.0 |
| Current ratio | 8.0 |
| FCF quality | 0.0 |
| Moat | 2.5 |
| Piotroski F | 4.4 |
- ▸Cash-burning: FCF -82% of revenue
- ▸No competitive moat
- ▸Quality concerns
Growth
0.6/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 0.6 |
- ▸Declining revenue: -8%
Momentum
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 2.8 |
| MACD | 7.6 |
| OBV | 1.0 |
| MA position | 6.0 |
| Volume | 0.0 |
- ▸Overbought bear rally (RSI 73)
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -3.0%/30d — confirmed downtrend
Sentiment
7.7/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 8.4 |
| Price target | 8.8 |
| erm sentiment | 5.4 |
- ▸Analyst upside: 33%
Insider
3.9/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 5.1 |
- ▸Modest insider selling — $10,161,771 (0.086% of mkt cap)
Peer rank
3.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 9.8 |
| quality rank | 0.4 |
| growth rank | 2.2 |
Technical
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.7 |
| support resistance | 3.8 |
| 52w position | 5.9 |
Risk (lower is worse)
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 10.0 |
| volatility | 6.2 |
| put call | 8.9 |
| implied vol | 5.7 |
| max pain risk | 3.0 |
| beta | 6.6 |
| debt equity | 1.8 |
- ▸Above max pain $22
Catalyst
3.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| dividend safety | 5.5 |
- ▸Earnings concerns: 1B/3M
- ▸Dividend: 256.0%
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (7)
- ASYMMETRY:1.6>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:40d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:3.5<4.5
- DEATH_CROSS:HARD_BLOCK
Warning (0)
none
Reward-to-Risk
1.58
Upside
+15.9%
Downside
10.1%
Sizing output
AVOID
SetupRECOVERY — Death cross but MACD improving, RSI 73
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 Value at 7.7 could not lift the engine output above the verdict floor. Failed gate signal: MOMENTUM:3.5<4.5.
The strongest dimensions are Value at 7.7, Sentiment at 7.7, and Risk (lower is worse) at 6.0; the weakest are Growth at 0.6, Quality at 2.7, and Catalyst at 3.1. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of 1.58 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Free cash flow is deeply negative, consuming resources equivalent to 82% of revenue, which means the business is not converting reported earnings into cash and raises serious questions about the sustainability of shareholder returns and growth investment.
Trip ifFree cash flow improves above -30% of revenue for 2 consecutive quarters.
- P2The company has missed earnings estimates in three of the last four quarters — with individual misses of 0.9%, 8%, and 15%, reading most recent to oldest — yielding an average negative surprise of approximately 6% and indicating management forecasts have consistently overstated near-term earnings power.
Trip ifEPS surprise exceeds 3% for 2 consecutive quarters.
- P3At a forward price-to-earnings of 5.1 times and a price-to-earnings-to-growth ratio near zero, the stock screens as inexpensive relative to its earnings trajectory, offering meaningful upside if earnings delivery stabilizes.
Trip ifRevenue decline accelerates beyond -15% year-over-year for 2 consecutive quarters.
- P4Price momentum has strengthened noticeably — with the RSI at 66, a bullish MACD crossover, rising on-balance volume, and the stock trading above its 200-day moving average — suggesting institutional accumulation is supporting the price despite weak underlying fundamentals.
Trip ifRSI falls below 45 for 2 consecutive months.