Value
6.0/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 6.2 |
| P/S | 8.3 |
| EV/EBITDA | 3.4 |
| Fwd P/E | 7.5 |
| PEG | 4.6 |
- ▸Forward P/E: 16.4x
- ▸PEG: 1.88
ERIE · Why this verdict
Why Erie Indemnity (ERIE) 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 score5.0/10
ConfidenceHIGH
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Erie Indemnity is in a confirmed technical downtrend — the 200-day moving average is declining at close to 7% per month and a death-cross pattern has triggered a hard block — while the price target offers only 2.5% of headroom at a 0.4-to-1 risk/reward ratio; high-severity customer and product concentration risks compound the setup, and the most recent quarter was a miss following two consecutive beats.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company derives its business predominantly from a single exchange customer and concentrates roughly 71% of its product mix in personal lines, creating two high-severity concentration risks flagged in the annual filing. Bear case | Personal-lines share of total premiums falls below 65% for 2 consecutive quarters as the business diversifies its product mix. | →Stable |
| CounterA concentrated focus on personal lines through a dedicated exchange relationship can deliver operational efficiency and underwriting consistency; not all concentration is fragility if the relationship is structurally durable. | ||
A death-cross formation has triggered a hard technical block, the 200-day moving average is declining at close to 7% per month, and on-balance volume is falling — all consistent with a confirmed downtrend rather than a temporary pullback. Engine gate (failed) | The 200-day moving average slope turns positive for 2 consecutive months while price trades above it, signaling a genuine trend reversal. | →Stable |
| CounterMACD is improving and RSI is at a neutral 51, suggesting internal momentum may be bottoming; if broader conditions turn constructive, this setup could recover faster than the moving-average crossover alone implies. | ||
The price target offers only 2.5% of headroom from current levels, and the reward-to-risk ratio of 0.4-to-1 is clearly unfavorable — the potential upside is a fraction of the potential downside, making new entry unattractive. Price targets | Upside to the price target expands above 10% through a price pullback or a significant analyst target upgrade. | →Stable |
| CounterA stock with limited stated upside to the technical target may simply need a target revision upward; if the company delivers a strong earnings beat, analyst targets could be raised, restoring asymmetry from current levels. | ||
The last four quarters produced two beats and two misses, with the most recent quarter missing consensus estimates by roughly 5%; this inconsistency limits the earnings-catalyst premium that would otherwise be warranted. Earnings | EPS surprise exceeds 0% for 3 consecutive quarters, restoring a reliable positive-surprise pattern. | →Stable |
| CounterThe average EPS surprise across the four quarters was still positive at roughly 16.5%, driven by a large beat in the prior period; a single miss does not break the overall trend if the next print returns to positive territory. | ||
The company derives its business predominantly from a single exchange customer and concentrates roughly 71% of its product mix in personal lines, creating two high-severity concentration risks flagged in the annual filing.
→StableBear case
- Expectation
- Personal-lines share of total premiums falls below 65% for 2 consecutive quarters as the business diversifies its product mix.
CounterA concentrated focus on personal lines through a dedicated exchange relationship can deliver operational efficiency and underwriting consistency; not all concentration is fragility if the relationship is structurally durable.
A death-cross formation has triggered a hard technical block, the 200-day moving average is declining at close to 7% per month, and on-balance volume is falling — all consistent with a confirmed downtrend rather than a temporary pullback.
→StableEngine gate (failed)
- Expectation
- The 200-day moving average slope turns positive for 2 consecutive months while price trades above it, signaling a genuine trend reversal.
CounterMACD is improving and RSI is at a neutral 51, suggesting internal momentum may be bottoming; if broader conditions turn constructive, this setup could recover faster than the moving-average crossover alone implies.
The price target offers only 2.5% of headroom from current levels, and the reward-to-risk ratio of 0.4-to-1 is clearly unfavorable — the potential upside is a fraction of the potential downside, making new entry unattractive.
→StablePrice targets
- Expectation
- Upside to the price target expands above 10% through a price pullback or a significant analyst target upgrade.
CounterA stock with limited stated upside to the technical target may simply need a target revision upward; if the company delivers a strong earnings beat, analyst targets could be raised, restoring asymmetry from current levels.
The last four quarters produced two beats and two misses, with the most recent quarter missing consensus estimates by roughly 5%; this inconsistency limits the earnings-catalyst premium that would otherwise be warranted.
→StableEarnings
- Expectation
- EPS surprise exceeds 0% for 3 consecutive quarters, restoring a reliable positive-surprise pattern.
CounterThe average EPS surprise across the four quarters was still positive at roughly 16.5%, driven by a large beat in the prior period; a single miss does not break the overall trend if the next print returns to positive territory.
Per-dimension breakdown
Quality
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 8.6 |
| ROA | 9.9 |
| Gross margin | 0.0 |
| Op margin | 6.8 |
| Net margin | 7.0 |
| Current ratio | 4.9 |
| FCF quality | 5.9 |
| Moat | 4.9 |
| Piotroski F | 6.7 |
- ▸Excellent ROE: 26%
- ▸Earnings quality warning: 78% FCF/NI
- ▸No competitive moat
Growth
3.4/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.1 |
| EPS growth | 3.7 |
Momentum
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -6.7%/30d — confirmed downtrend
Sentiment
5.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| erm sentiment | 5.0 |
Insider
5.3/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.5 |
| holder change | 5.1 |
- ▸Insider buying (low materiality) — $1,332,548 (0.011% of mkt cap)
Peer rank
3.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.1 |
| quality rank | 4.5 |
| growth rank | 0.0 |
Technical
2.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.1 |
| support resistance | 1.5 |
| 52w position | 2.3 |
Risk (lower is worse)
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 4.9 |
| days to cover | 0.0 |
| volatility | 4.4 |
| put call | 9.6 |
| implied vol | 6.2 |
| max pain risk | 3.0 |
| beta | 10.0 |
| debt equity | 2.9 |
- ▸Above max pain $140
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 6.5 |
- ▸Earnings concerns: 2B/2M
- ▸Dividend: 255.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:6.1>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:42d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (3)
- ASYMMETRY:UPSIDE_EXHAUSTED (upside=0.0%)
- DEATH_CROSS:momentum=6.1>=5.0 recovering
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
0.00
Upside
+0.0%
Downside
11.1%
Sizing output
AVOID
SetupRECOVERY — Death cross but MACD improving, RSI 58
EdgeNO_EDGE — No clear edge identified
SuitabilityMODERATE — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 3.5 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Quality at 6.1) was not enough to lift the adjusted overall above the threshold. Current asymmetry R:R is 0.00 — supplementary context, not the trigger for this path.
The strongest dimensions are Quality at 6.1, Momentum at 6.1, and Value at 6.0; the weakest are Technical at 2.0, Growth at 3.4, and Peer rank at 3.6. The V9 engine cleared all gates with 3 warnings, producing an asymmetric reward-to-risk of 0.00 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1A death-cross formation has triggered a hard technical block, the 200-day moving average is declining at close to 7% per month, and on-balance volume is falling — all consistent with a confirmed downtrend rather than a temporary pullback.
Trip if200-day moving average slope turns positive (greater than 0% per month) for 2 consecutive months while price trades above it.
- P2The price target offers only 2.5% of headroom from current levels, and the reward-to-risk ratio of 0.4-to-1 is clearly unfavorable — the potential upside is a fraction of the potential downside, making new entry unattractive.
Trip ifUpside to analyst price target expands above 10% through a price pullback or analyst target upgrade.
- P3The company derives its business predominantly from a single exchange customer and concentrates roughly 71% of its product mix in personal lines, creating two high-severity concentration risks flagged in the annual filing.
Trip ifPersonal-lines share of premiums falls below 60% for 2 consecutive reporting periods.
- P4The last four quarters produced two beats and two misses, with the most recent quarter missing consensus estimates by roughly 5%; this inconsistency limits the earnings-catalyst premium that would otherwise be warranted.
Trip ifEPS surprise exceeds 0% for 3 consecutive quarters.