Value
3.4/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 5.6 |
| EV/EBITDA | 0.2 |
| p ocf | 6.2 |
| Analyst target | 3.0 |
- ▸P/OCF: 17.7x (FFO proxy — REITs gated off P/E)
LAMR · Why this verdict
Why Lamar Advertising (LAMR) 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
Lamar operates a high-quality advertising franchise with strong 24% margins and a healthy financial-fitness score, but the stock already trades above its price target with a negative risk/reward ratio, the dividend yield has been flagged as potentially unsafe, and recent earnings execution has been uneven—collectively limiting the near-term case for new capital.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The business earns strong 24% operating margins, a financial-health score of 7 out of 9, and a return on equity of 55%, reflecting a durable, capital-efficient model embedded in physical advertising infrastructure. Quality | Over 12 months, operating margin holds at or above 22% and the financial-health score remains at 7 or higher, confirming the franchise's underlying quality. | →Stable |
| CounterThe return on equity is likely flattered by a highly leveraged capital structure—debt-to-equity at 5.0—meaning the margin strength may not translate into equity returns that justify a premium multiple once leverage is accounted for. | ||
The dividend yield has been flagged as potentially unsafe—earning income despite a high payout level—and with two earnings misses in the last three reported quarters, the cash generation needed to sustain the distribution is not clearly demonstrated. Catalyst | Over 12 months, free cash flow per share consistently covers the dividend payment, and the payout ratio falls below 80% for at least 2 of 4 quarters, removing the yield-trap concern. | →Stable |
| CounterThe most recent quarter delivered a beat, and the options market shows extremely low put-call activity (0.14), suggesting the market is not pricing in a near-term dividend cut—if earnings stabilize, the yield concern may not materialize. | ||
The stock currently trades above its price target, leaving a negative 1.3% headroom to the take-profit level and an unfavorable risk/reward ratio, which removes the asymmetry required to justify entering or adding to a position at current prices. Price targets | For the setup to become actionable, upside to the take-profit level should exceed 10% following a price pullback, at which point the risk/reward geometry would warrant reconsideration. | →Stable |
| CounterVolume accumulation (rising on-balance volume) and a position well above the 200-day moving average indicate the market is rewarding this franchise's quality—stocks above their target can continue to rerate if fundamentals improve. | ||
The most recent quarter produced a 4.7% beat, but the two prior quarters both missed by 4.2% and 5.5% respectively, and the oldest quarter came in essentially inline—an uneven four-quarter record that limits confidence in near-term earnings predictability. Earnings | Earnings surprise turns durably positive—beats in at least 3 of the next 4 quarters—with an average positive surprise above 3%, signaling that execution has stabilized. | →Stable |
| CounterA single recent beat may mark the start of a recovery, and if management has reset guidance conservatively following the misses, the pattern may not repeat. | ||
The business earns strong 24% operating margins, a financial-health score of 7 out of 9, and a return on equity of 55%, reflecting a durable, capital-efficient model embedded in physical advertising infrastructure.
→StableQuality
- Expectation
- Over 12 months, operating margin holds at or above 22% and the financial-health score remains at 7 or higher, confirming the franchise's underlying quality.
CounterThe return on equity is likely flattered by a highly leveraged capital structure—debt-to-equity at 5.0—meaning the margin strength may not translate into equity returns that justify a premium multiple once leverage is accounted for.
The dividend yield has been flagged as potentially unsafe—earning income despite a high payout level—and with two earnings misses in the last three reported quarters, the cash generation needed to sustain the distribution is not clearly demonstrated.
→StableCatalyst
- Expectation
- Over 12 months, free cash flow per share consistently covers the dividend payment, and the payout ratio falls below 80% for at least 2 of 4 quarters, removing the yield-trap concern.
CounterThe most recent quarter delivered a beat, and the options market shows extremely low put-call activity (0.14), suggesting the market is not pricing in a near-term dividend cut—if earnings stabilize, the yield concern may not materialize.
The stock currently trades above its price target, leaving a negative 1.3% headroom to the take-profit level and an unfavorable risk/reward ratio, which removes the asymmetry required to justify entering or adding to a position at current prices.
→StablePrice targets
- Expectation
- For the setup to become actionable, upside to the take-profit level should exceed 10% following a price pullback, at which point the risk/reward geometry would warrant reconsideration.
CounterVolume accumulation (rising on-balance volume) and a position well above the 200-day moving average indicate the market is rewarding this franchise's quality—stocks above their target can continue to rerate if fundamentals improve.
The most recent quarter produced a 4.7% beat, but the two prior quarters both missed by 4.2% and 5.5% respectively, and the oldest quarter came in essentially inline—an uneven four-quarter record that limits confidence in near-term earnings predictability.
→StableEarnings
- Expectation
- Earnings surprise turns durably positive—beats in at least 3 of the next 4 quarters—with an average positive surprise above 3%, signaling that execution has stabilized.
CounterA single recent beat may mark the start of a recovery, and if management has reset guidance conservatively following the misses, the pattern may not repeat.
Per-dimension breakdown
Quality
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 4.4 |
| Gross margin | 9.4 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 2.3 |
| FCF quality | 6.9 |
| Moat | 6.4 |
| Rule of 40 | 5.5 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 55%
- ▸Strong margins: 24%
- ▸Strong Piotroski F-Score: 7/9
Growth
4.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.6 |
| EPS growth | 5.5 |
Momentum
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 6.7 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 5.0 |
| erm sentiment | 5.0 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Insider selling (low materiality) — $1,570,200 (0.010% of mkt cap)
Peer rank
4.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.4 |
| quality rank | 6.4 |
| growth rank | 2.3 |
- ▸Superior ROE vs peers
Technical
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.8 |
| 52w position | 9.8 |
Risk (lower is worse)
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.7 |
| days to cover | 5.9 |
| volatility | 7.5 |
| put call | 10.0 |
| implied vol | 0.0 |
| beta | 6.1 |
| debt equity | 0.0 |
- ▸High IV: 114%
Catalyst
3.3/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 1.1 |
| earnings timing | 5.0 |
| surprise avg | 1.8 |
| dividend safety | 3.5 |
- ▸Earnings concerns: 1B/2M
- ▸Yield trap warning: high yield but unsafe
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 (1)
- ASYMMETRY:-2.5=NEGATIVE
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-2.45
Upside
-12.7%
Downside
5.2%
Sizing output
AVOID
SetupBREAKOUT — Golden cross, above all MAs, RSI 67, MACD bullish
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 7.3) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-2.5=NEGATIVE) reinforce the read. Current asymmetry R:R is -2.45 — supplementary context, not the trigger for this path.
The strongest dimensions are Quality at 7.3, Momentum at 6.1, and Sentiment at 5.0; the weakest are Catalyst at 3.3, Value at 3.4, and Technical at 3.5. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -2.45 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1The business earns strong 24% operating margins, a financial-health score of 7 out of 9, and a return on equity of 55%, reflecting a durable, capital-efficient model embedded in physical advertising infrastructure.
Trip ifOperating margin falls below 20% for 2 consecutive quarters.
- P2The dividend yield has been flagged as potentially unsafe—earning income despite a high payout level—and with two earnings misses in the last three reported quarters, the cash generation needed to sustain the distribution is not clearly demonstrated.
Trip ifDividend payout ratio falls below 70% for 2 consecutive quarters, indicating the yield is comfortably covered.
- P3The stock currently trades above its price target, leaving a negative 1.3% headroom to the take-profit level and an unfavorable risk/reward ratio, which removes the asymmetry required to justify entering or adding to a position at current prices.
Trip ifUpside to the take-profit level rises above 10% following a price pullback.
- P4The most recent quarter produced a 4.7% beat, but the two prior quarters both missed by 4.2% and 5.5% respectively, and the oldest quarter came in essentially inline—an uneven four-quarter record that limits confidence in near-term earnings predictability.
Trip ifEPS beats consensus by more than 2% for 3 of the next 4 reporting quarters.