Value
8.1/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.7 |
| P/S | 9.6 |
| EV/EBITDA | 6.2 |
| Fwd P/E | 9.0 |
| PEG | 10.0 |
| Analyst target | 9.0 |
- ▸Forward P/E: 11.7x
- ▸PEG: 0.04
- ▸Attractively valued
HLMN · Why this verdict
Why Hillman Solutions (HLMN) 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 score5.3/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Hillman Solutions offers a compelling valuation at roughly 11x forward earnings with 32% upside to the analyst target and a roughly 4.6-to-1 risk/reward in the investor's favor, but the absence of a competitive moat, below-average quality metrics, and a confirmed downtrend despite an overbought near-term rally argue for patience over immediate deployment.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The business operates without a competitive moat, quality metrics sit in the below-average range, and free cash flow represents only 68% of net income — a combination that leaves little margin for error if the demand environment weakens and reduces confidence that the earnings base will compound over time. Quality | For the quality concern to resolve, free cash flow conversion should rise above 90% of net income over the next four quarters, indicating improved earnings quality and reducing the moat-absence risk. | →Stable |
| CounterIf free cash flow conversion rises above 90% of net income for 4 consecutive quarters, it would indicate the earnings quality concern has largely resolved and the below-average quality rating no longer represents a material constraint on the thesis. | ||
A forward price-to-earnings of approximately 11.4x and a PEG ratio of 0.04 place the stock at an extreme discount to earnings expectations, while analyst consensus implies roughly 32% upside to the take-profit target — a setup with a roughly 4.6-to-1 risk/reward in the investor's favor. Value | The stock should narrow the gap toward the $10.55 target over 12 months as the deep value discount attracts capital and earnings estimates hold stable. | →Stable |
| CounterAn extremely low PEG and forward multiple can reflect the market's rational expectation of earnings deterioration rather than a mispricing; if forward estimates are cut substantially over the next two quarters, the apparent cheapness will prove illusory. | ||
MACD is improving and on-balance volume is rising, signaling a potential recovery in progress, but the stock remains in a confirmed downtrend below the 200-day moving average with the trend slope declining approximately 2.6% over 30 days, and the RSI at 73 is a level associated with overbought conditions in a bear-market rally that can reverse before the underlying trend genuinely changes. Momentum | The recovery should be validated by the stock reclaiming the 200-day moving average with the moving average slope turning positive within the next two to three months, confirming the downtrend has genuinely reversed rather than temporarily paused. | →Stable |
| CounterIf the stock reclaims the 200-day moving average and holds above it for 4 consecutive weeks while the trend slope turns positive, the downtrend thesis is falsified and the technical picture shifts from a bear-market rally to a genuine recovery. | ||
The company has delivered two earnings beats — with surprises of 18.47% and 7.62% — followed by two in-line quarters with no misses, establishing a record of meeting or exceeding expectations across each of the last four reported quarters. Earnings | Results should continue to meet or beat estimates in the next two reported quarters, demonstrating that the no-miss track record is sustainable. | →Stable |
| CounterThe two most recent in-line quarters may signal that earnings momentum is plateauing; if results miss estimates by more than 10% for 2 consecutive quarters, the positive earnings trajectory thesis breaks. | ||
The business operates without a competitive moat, quality metrics sit in the below-average range, and free cash flow represents only 68% of net income — a combination that leaves little margin for error if the demand environment weakens and reduces confidence that the earnings base will compound over time.
→StableQuality
- Expectation
- For the quality concern to resolve, free cash flow conversion should rise above 90% of net income over the next four quarters, indicating improved earnings quality and reducing the moat-absence risk.
CounterIf free cash flow conversion rises above 90% of net income for 4 consecutive quarters, it would indicate the earnings quality concern has largely resolved and the below-average quality rating no longer represents a material constraint on the thesis.
A forward price-to-earnings of approximately 11.4x and a PEG ratio of 0.04 place the stock at an extreme discount to earnings expectations, while analyst consensus implies roughly 32% upside to the take-profit target — a setup with a roughly 4.6-to-1 risk/reward in the investor's favor.
→StableValue
- Expectation
- The stock should narrow the gap toward the $10.55 target over 12 months as the deep value discount attracts capital and earnings estimates hold stable.
CounterAn extremely low PEG and forward multiple can reflect the market's rational expectation of earnings deterioration rather than a mispricing; if forward estimates are cut substantially over the next two quarters, the apparent cheapness will prove illusory.
MACD is improving and on-balance volume is rising, signaling a potential recovery in progress, but the stock remains in a confirmed downtrend below the 200-day moving average with the trend slope declining approximately 2.6% over 30 days, and the RSI at 73 is a level associated with overbought conditions in a bear-market rally that can reverse before the underlying trend genuinely changes.
→StableMomentum
- Expectation
- The recovery should be validated by the stock reclaiming the 200-day moving average with the moving average slope turning positive within the next two to three months, confirming the downtrend has genuinely reversed rather than temporarily paused.
CounterIf the stock reclaims the 200-day moving average and holds above it for 4 consecutive weeks while the trend slope turns positive, the downtrend thesis is falsified and the technical picture shifts from a bear-market rally to a genuine recovery.
The company has delivered two earnings beats — with surprises of 18.47% and 7.62% — followed by two in-line quarters with no misses, establishing a record of meeting or exceeding expectations across each of the last four reported quarters.
→StableEarnings
- Expectation
- Results should continue to meet or beat estimates in the next two reported quarters, demonstrating that the no-miss track record is sustainable.
CounterThe two most recent in-line quarters may signal that earnings momentum is plateauing; if results miss estimates by more than 10% for 2 consecutive quarters, the positive earnings trajectory thesis breaks.
Per-dimension breakdown
Quality
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.0 |
| ROA | 1.9 |
| Gross margin | 5.7 |
| Op margin | 0.7 |
| Net margin | 1.1 |
| Current ratio | 9.9 |
| FCF quality | 5.2 |
| Moat | 5.2 |
| Piotroski F | 10.0 |
- ▸Earnings quality warning: 68% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 9/9
Growth
6.6/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.2 |
| EPS growth | 10.0 |
Momentum
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 2.7 |
| MACD | 8.4 |
| OBV | 1.0 |
| MA position | 6.0 |
| Volume | 0.0 |
- ▸Overbought bear rally (RSI 75)
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -3.3%/30d — confirmed downtrend
Sentiment
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 9.4 |
| erm sentiment | 5.0 |
- ▸Analyst upside: 46%
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
2.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.4 |
| quality rank | 0.0 |
| growth rank | 1.3 |
Technical
1.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.0 |
| 52w position | 5.3 |
Risk (lower is worse)
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.9 |
| days to cover | 7.1 |
| volatility | 2.9 |
| put call | 3.3 |
| implied vol | 2.8 |
| max pain risk | 7.0 |
| beta | 5.4 |
| debt equity | 7.0 |
- ▸High IV: 63%
- ▸Concentration risks: 2 MED (10-K Item 1A)
Catalyst
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 5.3 |
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- ASYMMETRY:1.8>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:32d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:3.6<4.5
- DEATH_CROSS:HARD_BLOCK
Warning (0)
none
Reward-to-Risk
1.79
Upside
+26.8%
Downside
15.0%
Sizing output
AVOID
SetupRECOVERY — Death cross but MACD improving, RSI 75
EdgeNO_EDGE — No clear edge identified
SuitabilityAGGRESSIVE — Beta 1.41>1.3, MCap $1.6B<$5B
Investment implication
The F-path SELL output reflects an overall score of 5.3 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 8.1) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:3.6<4.5, DEATH_CROSS:HARD_BLOCK) reinforce the read. Current asymmetry R:R is 1.79 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 8.1, Growth at 6.6, and Sentiment at 6.4; the weakest are Technical at 1.8, Peer rank at 2.7, and Momentum at 3.6. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of 1.79 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1A forward price-to-earnings of approximately 11.4x and a PEG ratio of 0.04 place the stock at an extreme discount to earnings expectations, while analyst consensus implies roughly 32% upside to the take-profit target — a setup with a roughly 4.6-to-1 risk/reward in the investor's favor.
Trip ifForward EPS estimates are cut more than 20% from current levels over 2 consecutive quarters, indicating the cheap valuation reflects rational earnings deterioration rather than mispricing.
- P2The business operates without a competitive moat, quality metrics sit in the below-average range, and free cash flow represents only 68% of net income — a combination that leaves little margin for error if the demand environment weakens and reduces confidence that the earnings base will compound over time.
Trip ifFree cash flow rises above 90% of net income for 4 consecutive quarters, indicating the earnings quality concern has resolved.
- P3MACD is improving and on-balance volume is rising, signaling a potential recovery in progress, but the stock remains in a confirmed downtrend below the 200-day moving average with the trend slope declining approximately 2.6% over 30 days, and the RSI at 73 is a level associated with overbought conditions in a bear-market rally that can reverse before the underlying trend genuinely changes.
Trip ifStock reclaims the 200-day moving average and holds above it for 4 consecutive weeks with the trend slope turning positive, validating a genuine recovery rather than a bear-market rally.
- P4The company has delivered two earnings beats — with surprises of 18.47% and 7.62% — followed by two in-line quarters with no misses, establishing a record of meeting or exceeding expectations across each of the last four reported quarters.
Trip ifEPS surprise falls below -10% for 2 consecutive quarters, breaking the no-miss streak.