Value
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.9 |
| P/S | 8.1 |
| EV/EBITDA | 5.3 |
| Fwd P/E | 3.9 |
| PEG | 3.8 |
| Analyst target | 4.0 |
- ▸Forward P/E: 30.6x
- ▸PEG: 2.86
HWKN · Why this verdict
Why Hawkins (HWKN) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score4.5/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Hawkins trades near its analyst target at 29.4x forward earnings with declining revenue and an inconsistent earnings track record — the 1.3% upside to target and risk/reward of 0.21 to 1 do not compensate for the combination of a rich multiple and near-term execution uncertainty.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
With only 1.3% headroom to the near-term price target and a risk/reward ratio of 0.21 to 1, the current setup offers no meaningful reward relative to the risks present — a rich multiple, inconsistent earnings, and a leadership transition are not the conditions under which thin upside resolves favorably. Price targets | An actionable entry appears if the stock pulls back to create at least 10% upside to the target. | →Stable |
| CounterTechnical momentum is constructive — the stock is above its 200-day moving average with rising on-balance volume and a bullish MACD — which could carry the price above near-term resistance and establish a higher target range with better entry economics. | ||
At a forward multiple of 29.4x and a PEG of 2.74, the stock carries a premium that is difficult to justify against a 2% revenue decline — a rich valuation is most exposed when the growth narrative it depends on is not yet confirmed in the top line. Valuation breakdown | Valuation becomes more defensible if the forward P/E compresses below 20x, requiring earnings growth to outpace the current price or the stock to pull back materially. | →Stable |
| CounterStrong free cash flow conversion relative to net income and a Piotroski F-Score of 7 out of 9 indicate the underlying business is healthier than the topline contraction implies; a specialty chemicals franchise with sound balance sheet metrics can sustain a premium multiple through temporary revenue softness. | ||
The trailing four quarters show an alternating pattern — the most recent was a beat (+7.5%), the prior two were misses (-3% and -12%), and the oldest was a beat (+7%) — an inconsistency that makes earnings predictability low and prevents a durable premium for execution reliability. Earnings | Predictability improves if the company delivers 3 consecutive quarterly beats, each with EPS surprise above 5%. | →Stable |
| CounterThe most recent quarter returned to a beat after two consecutive misses; if the prior two misses reflected a temporary factor, the current quarter may mark the beginning of a recovery in earnings consistency. | ||
A recent 8-K filing disclosed a C-suite officer departure or appointment — an event that introduces near-term strategic uncertainty at a time when the business is already navigating a revenue contraction, as leadership transitions can shift customer relationships and capital allocation priorities in ways that take several quarters to manifest in results. Gates warning | This uncertainty resolves over 2 to 3 quarters as the incoming leadership's strategic priorities become visible and earnings execution stabilizes. | →Stable |
| CounterNo net insider share transactions were reported in the 90-day window around the filing, and the insider signal remains neutral — suggesting the transition may be orderly and planned rather than a disruptive departure. | ||
With only 1.3% headroom to the near-term price target and a risk/reward ratio of 0.21 to 1, the current setup offers no meaningful reward relative to the risks present — a rich multiple, inconsistent earnings, and a leadership transition are not the conditions under which thin upside resolves favorably.
→StablePrice targets
- Expectation
- An actionable entry appears if the stock pulls back to create at least 10% upside to the target.
CounterTechnical momentum is constructive — the stock is above its 200-day moving average with rising on-balance volume and a bullish MACD — which could carry the price above near-term resistance and establish a higher target range with better entry economics.
At a forward multiple of 29.4x and a PEG of 2.74, the stock carries a premium that is difficult to justify against a 2% revenue decline — a rich valuation is most exposed when the growth narrative it depends on is not yet confirmed in the top line.
→StableValuation breakdown
- Expectation
- Valuation becomes more defensible if the forward P/E compresses below 20x, requiring earnings growth to outpace the current price or the stock to pull back materially.
CounterStrong free cash flow conversion relative to net income and a Piotroski F-Score of 7 out of 9 indicate the underlying business is healthier than the topline contraction implies; a specialty chemicals franchise with sound balance sheet metrics can sustain a premium multiple through temporary revenue softness.
The trailing four quarters show an alternating pattern — the most recent was a beat (+7.5%), the prior two were misses (-3% and -12%), and the oldest was a beat (+7%) — an inconsistency that makes earnings predictability low and prevents a durable premium for execution reliability.
→StableEarnings
- Expectation
- Predictability improves if the company delivers 3 consecutive quarterly beats, each with EPS surprise above 5%.
CounterThe most recent quarter returned to a beat after two consecutive misses; if the prior two misses reflected a temporary factor, the current quarter may mark the beginning of a recovery in earnings consistency.
A recent 8-K filing disclosed a C-suite officer departure or appointment — an event that introduces near-term strategic uncertainty at a time when the business is already navigating a revenue contraction, as leadership transitions can shift customer relationships and capital allocation priorities in ways that take several quarters to manifest in results.
→StableGates warning
- Expectation
- This uncertainty resolves over 2 to 3 quarters as the incoming leadership's strategic priorities become visible and earnings execution stabilizes.
CounterNo net insider share transactions were reported in the 90-day window around the filing, and the insider signal remains neutral — suggesting the transition may be orderly and planned rather than a disruptive departure.
Per-dimension breakdown
Quality
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.5 |
| ROA | 5.5 |
| Gross margin | 0.5 |
| Op margin | 3.8 |
| Net margin | 3.8 |
| Current ratio | 7.6 |
| FCF quality | 6.6 |
| Moat | 4.4 |
| Piotroski F | 7.8 |
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
Growth
2.9/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.1 |
| EPS growth | 3.6 |
- ▸Declining revenue: -2%
Momentum
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.0 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 7.5 |
| Volume | 0.0 |
- ▸Overbought (RSI 81)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat/negative + RSI 81 (late-cycle distribution risk)
Sentiment
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 6.9 |
| erm sentiment | 5.0 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
2.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.4 |
| quality rank | 6.5 |
| growth rank | 1.9 |
Technical
3.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 1.7 |
| 52w position | 8.0 |
Risk (lower is worse)
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.0 |
| days to cover | 0.8 |
| volatility | 4.6 |
| put call | 10.0 |
| implied vol | 6.5 |
| beta | 8.4 |
| debt equity | 8.3 |
Catalyst
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 2.5 |
| dividend safety | 5.2 |
- ▸Earnings concerns: 2B/2M
- ▸Dividend: 46.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:6.3>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:34d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.4=NEGATIVE
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.38
Upside
-3.6%
Downside
9.6%
Sizing output
AVOID
SetupUNKNOWN — No clear chart pattern; technical signals are mixed
EdgeNO_EDGE — No clear edge identified
SuitabilityAGGRESSIVE — MCap $3.5B<$5B
Investment implication
The F-path SELL output reflects an overall score of 4.5 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Risk (lower is worse) at 6.4) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.4=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.38 — supplementary context, not the trigger for this path.
The strongest dimensions are Risk (lower is worse) at 6.4, Momentum at 6.3, and Sentiment at 5.6; the weakest are Peer rank at 2.7, Growth at 2.9, and Technical at 3.2. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.38 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1At a forward multiple of 29.4x and a PEG of 2.74, the stock carries a premium that is difficult to justify against a 2% revenue decline — a rich valuation is most exposed when the growth narrative it depends on is not yet confirmed in the top line.
Trip ifForward P/E compresses below 20x for 2 consecutive quarters.
- P2The trailing four quarters show an alternating pattern — the most recent was a beat (+7.5%), the prior two were misses (-3% and -12%), and the oldest was a beat (+7%) — an inconsistency that makes earnings predictability low and prevents a durable premium for execution reliability.
Trip ifEPS surprise exceeds 5% for 3 consecutive quarters.
- P3A recent 8-K filing disclosed a C-suite officer departure or appointment — an event that introduces near-term strategic uncertainty at a time when the business is already navigating a revenue contraction, as leadership transitions can shift customer relationships and capital allocation priorities in ways that take several quarters to manifest in results.
Trip ifEPS exceeds consensus estimates by more than 5% for 2 consecutive quarters following the C-suite transition.
- P4With only 1.3% headroom to the near-term price target and a risk/reward ratio of 0.21 to 1, the current setup offers no meaningful reward relative to the risks present — a rich multiple, inconsistent earnings, and a leadership transition are not the conditions under which thin upside resolves favorably.
Trip ifUpside to the price target exceeds 10% from the prevailing market price.