Value
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.5 |
| P/S | 8.0 |
| EV/EBITDA | 0.2 |
| Fwd P/E | 4.7 |
| PEG | 10.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 26.7x
- ▸PEG: 0.16
HLIO · Why this verdict
Why Helios Technologies (HLIO) 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
Helios Technologies has delivered four consecutive earnings beats averaging roughly 14% above consensus and converts free cash flow at 162% of net income — the quality fundamentals are real — but the stock has essentially reached its near-term resistance target and the risk/reward is unfavorable, making this a hold rather than a new-entry setup.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company has delivered four consecutive quarterly earnings beats — with individual positive surprises of 17.41%, 9.76%, 12.65%, and 16.13% — establishing a highly consistent pattern of under-promising and over-delivering that reflects operational discipline and management credibility. Earnings | Earnings beats should continue in the next two quarters with surprises above 8%, sustaining the track record and supporting stable-to-rising analyst estimates. | →Stable |
| CounterFour consecutive beats raises the bar for future performance; as analyst models tighten around the actual delivery pattern, the margin for upside surprise narrows, and any slip below consensus would disproportionately damage the credibility premium embedded in the current valuation. | ||
Free cash flow conversion stands at 162% of net income alongside a Piotroski F-Score of 9/9, indicating an unusually high-quality earnings stream where reported profits substantially understate the actual cash being generated — a financial profile that underpins long-term intrinsic value. Quality | Free cash flow conversion should remain above 130% of net income for the next four quarters, confirming that the cash efficiency is structural rather than driven by one-time working-capital tailwinds. | →Stable |
| CounterConversion ratios substantially above 100% can reflect non-recurring working-capital movements or timing of capital expenditures; if the ratio falls below 100% for 2 consecutive quarters, the quality signal weakens and the premium embedded in the financial profile may not be warranted. | ||
The hydraulics segment accounts for approximately 64% of revenue and the Americas geography represents approximately 79% of the electronics segment — a dual concentration that creates significant sensitivity to slowdowns in either the industrial hydraulics market or North American economic conditions. Bear case | If the thesis holds, segment revenue should remain relatively stable quarter-to-quarter, validating that the concentrated exposure is not creating outsized cyclical risk. | →Stable |
| CounterIf the hydraulics segment falls below 55% of total revenue for 4 consecutive quarters, it would indicate the company is successfully diversifying its mix, and the concentration risk that underpins this pillar is actively being managed down. | ||
The stock has essentially reached its near-term resistance target — with less than 1% headroom to the take-profit level — while the risk/reward is unfavorable; the geometric upside has been consumed by the current price level, making this unsuitable for new capital allocation. Price targets | A meaningful pullback from current levels or an analyst target revision of 15% or more would be required before the geometric setup justifies initiating or adding to a position. | →Stable |
| CounterIf analyst consensus targets are revised upward by more than 15% following the next earnings report, the upside-to-downside ratio would reset above 1.5-to-1 and the exhausted-upside thesis would no longer hold. | ||
The company has delivered four consecutive quarterly earnings beats — with individual positive surprises of 17.41%, 9.76%, 12.65%, and 16.13% — establishing a highly consistent pattern of under-promising and over-delivering that reflects operational discipline and management credibility.
→StableEarnings
- Expectation
- Earnings beats should continue in the next two quarters with surprises above 8%, sustaining the track record and supporting stable-to-rising analyst estimates.
CounterFour consecutive beats raises the bar for future performance; as analyst models tighten around the actual delivery pattern, the margin for upside surprise narrows, and any slip below consensus would disproportionately damage the credibility premium embedded in the current valuation.
Free cash flow conversion stands at 162% of net income alongside a Piotroski F-Score of 9/9, indicating an unusually high-quality earnings stream where reported profits substantially understate the actual cash being generated — a financial profile that underpins long-term intrinsic value.
→StableQuality
- Expectation
- Free cash flow conversion should remain above 130% of net income for the next four quarters, confirming that the cash efficiency is structural rather than driven by one-time working-capital tailwinds.
CounterConversion ratios substantially above 100% can reflect non-recurring working-capital movements or timing of capital expenditures; if the ratio falls below 100% for 2 consecutive quarters, the quality signal weakens and the premium embedded in the financial profile may not be warranted.
The hydraulics segment accounts for approximately 64% of revenue and the Americas geography represents approximately 79% of the electronics segment — a dual concentration that creates significant sensitivity to slowdowns in either the industrial hydraulics market or North American economic conditions.
→StableBear case
- Expectation
- If the thesis holds, segment revenue should remain relatively stable quarter-to-quarter, validating that the concentrated exposure is not creating outsized cyclical risk.
CounterIf the hydraulics segment falls below 55% of total revenue for 4 consecutive quarters, it would indicate the company is successfully diversifying its mix, and the concentration risk that underpins this pillar is actively being managed down.
The stock has essentially reached its near-term resistance target — with less than 1% headroom to the take-profit level — while the risk/reward is unfavorable; the geometric upside has been consumed by the current price level, making this unsuitable for new capital allocation.
→StablePrice targets
- Expectation
- A meaningful pullback from current levels or an analyst target revision of 15% or more would be required before the geometric setup justifies initiating or adding to a position.
CounterIf analyst consensus targets are revised upward by more than 15% following the next earnings report, the upside-to-downside ratio would reset above 1.5-to-1 and the exhausted-upside thesis would no longer hold.
Per-dimension breakdown
Quality
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.2 |
| ROA | 2.9 |
| Gross margin | 2.6 |
| Op margin | 5.2 |
| Net margin | 3.5 |
| Current ratio | 9.6 |
| FCF quality | 10.0 |
| Moat | 5.6 |
| Piotroski F | 10.0 |
- ▸Excellent cash conversion: 162% FCF/NI
- ▸Strong Piotroski F-Score: 9/9
Growth
8.3/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 6.7 |
| EPS growth | 10.0 |
Momentum
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 3.9 |
| erm sentiment | 5.0 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Insider selling (low materiality) — $229,440 (0.008% of mkt cap)
Peer rank
3.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.3 |
| quality rank | 2.5 |
| growth rank | 7.2 |
Technical
3.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.3 |
| 52w position | 9.9 |
| gap | 5.0 |
Risk (lower is worse)
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.5 |
| days to cover | 8.0 |
| volatility | 2.7 |
| put call | 10.0 |
| implied vol | 6.2 |
| max pain risk | 3.0 |
| beta | 5.9 |
| debt equity | 8.4 |
- ▸Above max pain $80
- ▸Concentration risks: 3 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 9.5 |
| dividend safety | 5.2 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 54.0%
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (7)
- MOMENTUM:6.8>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:42d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.3=NEGATIVE
Warning (0)
none
Reward-to-Risk
-1.28
Upside
-19.3%
Downside
15.0%
Sizing output
AVOID
SetupBREAKOUT — Golden cross, above all MAs, RSI 63, MACD bullish
EdgeNO_EDGE — No clear edge identified
SuitabilityAGGRESSIVE — MCap $3.0B<$5B
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: MOMENTUM:6.8>=5.5. Top dim: Growth at 8.3; weakest: Peer rank at 3.3. No conviction either direction.
The strongest dimensions are Growth at 8.3, Catalyst at 6.9, and Momentum at 6.8; the weakest are Peer rank at 3.3, Technical at 3.8, and Sentiment at 4.6. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -1.28 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 delivered four consecutive quarterly earnings beats — with individual positive surprises of 17.41%, 9.76%, 12.65%, and 16.13% — establishing a highly consistent pattern of under-promising and over-delivering that reflects operational discipline and management credibility.
Trip ifEPS surprise falls below 0% for 2 consecutive quarters, breaking the four-quarter beat streak.
- P2Free cash flow conversion stands at 162% of net income alongside a Piotroski F-Score of 9/9, indicating an unusually high-quality earnings stream where reported profits substantially understate the actual cash being generated — a financial profile that underpins long-term intrinsic value.
Trip ifFree cash flow falls below 100% of net income for 2 consecutive quarters.
- P3The hydraulics segment accounts for approximately 64% of revenue and the Americas geography represents approximately 79% of the electronics segment — a dual concentration that creates significant sensitivity to slowdowns in either the industrial hydraulics market or North American economic conditions.
Trip ifHydraulics segment falls below 55% of total revenue for 4 consecutive quarters, indicating successful diversification has reduced the concentration risk.
- P4The stock has essentially reached its near-term resistance target — with less than 1% headroom to the take-profit level — while the risk/reward is unfavorable; the geometric upside has been consumed by the current price level, making this unsuitable for new capital allocation.
Trip ifAnalyst consensus price target is revised upward by more than 15%, restoring upside to the take-profit level above 15% and resetting the risk/reward above 1.5-to-1.