Value
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 1.2 |
| P/S | 7.9 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 2.9 |
| PEG | 10.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 36.2x
- ▸PEG: 0.30
PRLB · Why this verdict
Why Proto Labs (PRLB) 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 score5.4/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Proto Labs has beaten earnings estimates in all 4 of the last 4 quarters with an average surprise of 26%, delivers 179% free cash flow conversion, and holds a perfect Piotroski F-Score of 9/9, but the stock has already reached analyst targets and falling volume (declining on-balance volume) signals waning buying interest.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
At $78.53, the stock has surpassed its analyst-derived take-profit target of $79.65 by a narrow margin, and with only 1.4% remaining upside, the risk-reward of 0.20 is deeply unfavorable relative to the 7% downside risk. Warnings | Analyst consensus target rises above $95 within the next 12 months to re-open a constructive risk-reward setup. | →Stable |
| CounterA high beat streak tends to drive analyst target upgrades quickly, which could restore positive asymmetry within one or two earnings cycles. | ||
Proto Labs has beaten earnings estimates consistently across all 4 recent quarters with an impressive average positive surprise of 26.4%, including a 37.8% beat in the most recent quarter ended May 2026. Earnings | Quarterly earnings surprise remains positive in at least 3 of the next 4 quarters, sustaining the beat pattern that has driven the stock's recovery. | →Stable |
| CounterHigh beat rates can reflect overly conservative analyst estimates rather than genuine outperformance, and the trend can reverse sharply if guidance is reset upward. | ||
Free cash flow is 179% of net income, a strong signal of high earnings quality and capital efficiency, supported by a Piotroski F-Score of 9/9 indicating broad fundamental strength across profitability, leverage, and efficiency dimensions. Quality breakdown | Free cash flow conversion remains above 120% of net income in the next annual reporting period, confirming the earnings quality is structural rather than one-time. | →Stable |
| CounterFCF conversion above 100% can reflect timing of working capital benefits or deferred capex rather than permanently superior cash generation. | ||
Despite strong price performance, on-balance volume is falling, indicating that volume is heavier on down days than up days, which suggests declining institutional buying conviction near the current price level. Momentum breakdown | On-balance volume trend reverses and begins rising within 60 days, signaling renewed buying demand at current price levels. | →Stable |
| CounterShort-term on-balance volume patterns can be noisy and may not predict price direction reliably over the 12-month investment horizon. | ||
At $78.53, the stock has surpassed its analyst-derived take-profit target of $79.65 by a narrow margin, and with only 1.4% remaining upside, the risk-reward of 0.20 is deeply unfavorable relative to the 7% downside risk.
→StableWarnings
- Expectation
- Analyst consensus target rises above $95 within the next 12 months to re-open a constructive risk-reward setup.
CounterA high beat streak tends to drive analyst target upgrades quickly, which could restore positive asymmetry within one or two earnings cycles.
Proto Labs has beaten earnings estimates consistently across all 4 recent quarters with an impressive average positive surprise of 26.4%, including a 37.8% beat in the most recent quarter ended May 2026.
→StableEarnings
- Expectation
- Quarterly earnings surprise remains positive in at least 3 of the next 4 quarters, sustaining the beat pattern that has driven the stock's recovery.
CounterHigh beat rates can reflect overly conservative analyst estimates rather than genuine outperformance, and the trend can reverse sharply if guidance is reset upward.
Free cash flow is 179% of net income, a strong signal of high earnings quality and capital efficiency, supported by a Piotroski F-Score of 9/9 indicating broad fundamental strength across profitability, leverage, and efficiency dimensions.
→StableQuality breakdown
- Expectation
- Free cash flow conversion remains above 120% of net income in the next annual reporting period, confirming the earnings quality is structural rather than one-time.
CounterFCF conversion above 100% can reflect timing of working capital benefits or deferred capex rather than permanently superior cash generation.
Despite strong price performance, on-balance volume is falling, indicating that volume is heavier on down days than up days, which suggests declining institutional buying conviction near the current price level.
→StableMomentum breakdown
- Expectation
- On-balance volume trend reverses and begins rising within 60 days, signaling renewed buying demand at current price levels.
CounterShort-term on-balance volume patterns can be noisy and may not predict price direction reliably over the 12-month investment horizon.
Per-dimension breakdown
Quality
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.3 |
| ROA | 1.8 |
| Gross margin | 5.0 |
| Op margin | 3.2 |
| Net margin | 2.4 |
| Current ratio | 9.5 |
| FCF quality | 10.0 |
| Moat | 6.4 |
| Piotroski F | 10.0 |
- ▸Excellent cash conversion: 179% FCF/NI
- ▸Strong Piotroski F-Score: 9/9
Growth
7.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.1 |
| EPS growth | 10.0 |
Momentum
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 7.4 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 3.1 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.1 |
| Price target | 5.2 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (3.0) — signal dampened
Insider
3.8/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 5.0 |
- ▸Modest insider selling — $1,804,716 (0.095% of mkt cap)
Peer rank
2.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.3 |
| quality rank | 1.7 |
| growth rank | 2.5 |
Technical
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.4 |
| support resistance | 3.0 |
| 52w position | 9.2 |
Risk (lower is worse)
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.1 |
| days to cover | 7.6 |
| volatility | 2.5 |
| put call | 10.0 |
| implied vol | 6.0 |
| max pain risk | 3.0 |
| beta | 5.4 |
| debt equity | 8.5 |
- ▸Above max pain $55
Catalyst
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:6.9>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:35d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.4=NEGATIVE
Warning (0)
none
Reward-to-Risk
-1.43
Upside
-13.8%
Downside
9.6%
Sizing output
AVOID
SetupBREAKOUT — Golden cross, above all MAs, RSI 64, MACD bullish
EdgeNO_EDGE — No clear edge identified
SuitabilityAGGRESSIVE — Beta 1.39>1.3, MCap $1.9B<$5B
Investment implication
The F-path SELL output reflects an overall score of 5.4 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Growth at 7.5) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-1.4=NEGATIVE) reinforce the read. Current asymmetry R:R is -1.43 — supplementary context, not the trigger for this path.
The strongest dimensions are Growth at 7.5, Catalyst at 7.5, and Momentum at 6.9; the weakest are Peer rank at 2.6, Insider at 3.8, and Value at 4.4. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -1.43 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Proto Labs has beaten earnings estimates consistently across all 4 recent quarters with an impressive average positive surprise of 26.4%, including a 37.8% beat in the most recent quarter ended May 2026.
Trip ifQuarterly earnings surprise falls below 0% in at least 2 of the next 4 quarters.
- P2Free cash flow is 179% of net income, a strong signal of high earnings quality and capital efficiency, supported by a Piotroski F-Score of 9/9 indicating broad fundamental strength across profitability, leverage, and efficiency dimensions.
Trip ifFree cash flow conversion drops below 80% of net income in any annual reporting period.
- P3At $78.53, the stock has surpassed its analyst-derived take-profit target of $79.65 by a narrow margin, and with only 1.4% remaining upside, the risk-reward of 0.20 is deeply unfavorable relative to the 7% downside risk.
Trip ifAnalyst consensus price target rises above $95, restoring more than 20% upside from current levels.
- P4Despite strong price performance, on-balance volume is falling, indicating that volume is heavier on down days than up days, which suggests declining institutional buying conviction near the current price level.
Trip ifPrice falls below $65 on weekly close, indicating downside momentum has accelerated beyond normal consolidation.