Value
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.7 |
| P/S | 9.2 |
| EV/EBITDA | 4.7 |
| Fwd P/E | 8.0 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 15.0x
- ▸PEG: 0.24
- ▸Attractively valued
GTX · Why this verdict
Why Garrett Motion (GTX) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.7/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Garrett Motion has demonstrated consistent earnings execution — beating estimates in each of the last four quarters by an average of 15% — at a valuation that still screens inexpensive with a PEG of 0.24; however, the stock has traded past its near-term price target with a negative reward-to-risk ratio, suggesting existing holders should maintain but not add at current levels.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company has beaten consensus earnings estimates in all four of the last four quarters with an average positive surprise of 15.3%, demonstrating a track record of consistently under-promising and over-delivering on results across multiple reporting periods. Catalyst breakdown | The beat streak should extend for at least two more quarters with surprises above 10% each, confirming that execution discipline is durable rather than a temporary alignment of conditions. | →Stable |
| CounterAnalyst estimates are described as trending downward, meaning future beats may reflect a progressively lower bar rather than genuine outperformance; a miss against a reduced estimate could still damage sentiment even if the underlying business has not materially weakened. | ||
A forward price-to-earnings of 15.3 times and a PEG ratio of 0.24 indicate the market is pricing the business cheaply relative to its earnings growth rate, offering a valuation cushion that is uncommon in a company with a clean four-quarter beat streak. Valuation breakdown | The PEG ratio should remain below 0.5 over the next four quarters as earnings growth continues to outpace the pace implied by the current multiple, preserving the valuation advantage. | →Stable |
| CounterHigh implied volatility of 110% signals that the market assigns a wide range of outcomes to the earnings trajectory; the low multiple may reflect genuine uncertainty about cyclical durability rather than straightforward mispricing. | ||
The stock is trading above its near-term price target with a negative reward-to-risk ratio, meaning the current price offers no buffer against downside and no room for incremental upside before reaching resistance — an unfavorable setup for new capital. Price targets | Upside to the take-profit target should recover above 10% before the entry geometry becomes attractive for adding to or initiating a position. | →Stable |
| CounterThe beat streak, valuation, and growth profile all remain intact; holders already positioned have no fundamental reason to exit — the unfavorable geometry is most relevant to new capital, not to managing an existing stake. | ||
Despite four consecutive beats, forward estimates are trending downward, which can signal that the earnings trajectory is softer than the historical beat streak implies — a potential leading indicator of deceleration that warrants monitoring. Bear case | Net analyst estimate revisions should turn positive for at least one full quarterly revision cycle, indicating that the downward revision trend has ended and the forward earnings outlook is stabilizing. | →Stable |
| CounterA company in a cyclical sector often sees conservative management guidance followed by operational outperformance; downward estimate revisions may reflect deliberate under-guidance rather than deteriorating business fundamentals. | ||
The company has beaten consensus earnings estimates in all four of the last four quarters with an average positive surprise of 15.3%, demonstrating a track record of consistently under-promising and over-delivering on results across multiple reporting periods.
→StableCatalyst breakdown
- Expectation
- The beat streak should extend for at least two more quarters with surprises above 10% each, confirming that execution discipline is durable rather than a temporary alignment of conditions.
CounterAnalyst estimates are described as trending downward, meaning future beats may reflect a progressively lower bar rather than genuine outperformance; a miss against a reduced estimate could still damage sentiment even if the underlying business has not materially weakened.
A forward price-to-earnings of 15.3 times and a PEG ratio of 0.24 indicate the market is pricing the business cheaply relative to its earnings growth rate, offering a valuation cushion that is uncommon in a company with a clean four-quarter beat streak.
→StableValuation breakdown
- Expectation
- The PEG ratio should remain below 0.5 over the next four quarters as earnings growth continues to outpace the pace implied by the current multiple, preserving the valuation advantage.
CounterHigh implied volatility of 110% signals that the market assigns a wide range of outcomes to the earnings trajectory; the low multiple may reflect genuine uncertainty about cyclical durability rather than straightforward mispricing.
The stock is trading above its near-term price target with a negative reward-to-risk ratio, meaning the current price offers no buffer against downside and no room for incremental upside before reaching resistance — an unfavorable setup for new capital.
→StablePrice targets
- Expectation
- Upside to the take-profit target should recover above 10% before the entry geometry becomes attractive for adding to or initiating a position.
CounterThe beat streak, valuation, and growth profile all remain intact; holders already positioned have no fundamental reason to exit — the unfavorable geometry is most relevant to new capital, not to managing an existing stake.
Despite four consecutive beats, forward estimates are trending downward, which can signal that the earnings trajectory is softer than the historical beat streak implies — a potential leading indicator of deceleration that warrants monitoring.
→StableBear case
- Expectation
- Net analyst estimate revisions should turn positive for at least one full quarterly revision cycle, indicating that the downward revision trend has ended and the forward earnings outlook is stabilizing.
CounterA company in a cyclical sector often sees conservative management guidance followed by operational outperformance; downward estimate revisions may reflect deliberate under-guidance rather than deteriorating business fundamentals.
Per-dimension breakdown
Quality
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROA | 9.4 |
| Gross margin | 0.1 |
| Op margin | 5.6 |
| Net margin | 4.6 |
| Current ratio | 3.9 |
| FCF quality | 7.0 |
| Moat | 5.5 |
| Piotroski F | 6.7 |
Growth
7.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.5 |
| EPS growth | 10.0 |
Momentum
3.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 5.6 |
| erm sentiment | 4.0 |
Insider
3.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 2.0 |
| holder change | 5.0 |
- ▸Notable insider selling — $6,714,332 (0.108% of mkt cap)
Peer rank
5.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.4 |
| quality rank | 6.3 |
| growth rank | 6.4 |
Technical
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.0 |
| support resistance | 2.1 |
| 52w position | 9.5 |
| gap | 5.0 |
Risk (lower is worse)
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.6 |
| days to cover | 9.5 |
| volatility | 3.5 |
| put call | 9.9 |
| implied vol | 3.7 |
| max pain risk | 3.0 |
| beta | 8.2 |
- ▸Above max pain $17
- ▸Concentration risks: 2 MED (10-K Item 1A)
Catalyst
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 3.5 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 6.0 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 96.0%
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:28d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:3.1<4.5
- ASYMMETRY:-1.0=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.96
Upside
-9.6%
Downside
10.0%
Sizing output
AVOID
SetupUNKNOWN — No clear chart pattern; technical signals are mixed
EdgeCATALYST — Earnings in 28d with 4/4 beat streak
SuitabilityMODERATE — Balanced profile
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: INSIDER:OK. Top dim: Growth at 7.8; weakest: Momentum at 3.1. No conviction either direction.
The strongest dimensions are Growth at 7.8, Value at 7.1, and Catalyst at 6.9; the weakest are Momentum at 3.1, Insider at 3.3, and Technical at 4.7. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -0.96 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 all four of the last four quarters with an average positive surprise of 15.3%, demonstrating a track record of consistently under-promising and over-delivering on results across multiple reporting periods.
Trip ifEarnings surprise falls below 0% for 2 consecutive quarters.
- P2A forward price-to-earnings of 15.3 times and a PEG ratio of 0.24 indicate the market is pricing the business cheaply relative to its earnings growth rate, offering a valuation cushion that is uncommon in a company with a clean four-quarter beat streak.
Trip ifPEG ratio rises above 1.0, indicating the valuation cushion versus growth has closed.
- P3The stock is trading above its near-term price target with a negative reward-to-risk ratio, meaning the current price offers no buffer against downside and no room for incremental upside before reaching resistance — an unfavorable setup for new capital.
Trip ifUpside to the take-profit target recovers above 10% from the current negative figure.
- P4Despite four consecutive beats, forward estimates are trending downward, which can signal that the earnings trajectory is softer than the historical beat streak implies — a potential leading indicator of deceleration that warrants monitoring.
Trip ifNet analyst estimate revisions rise above 0 for 1 full quarterly revision cycle.