Value
4.7/10data confidence 67%| Component | Sub-score |
|---|---|
| P/E | 6.0 |
| P/S | 9.8 |
| EV/EBITDA | 5.5 |
| PEG | 3.1 |
- ▸PEG: 3.95
RUSHB · Why this verdict
Why Rush Enterprises (RUSHB) 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 score4.5/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Rush Enterprises Class B shares have the same underlying business as Class A, featuring strong momentum with a score of 8.0, consistent earnings outperformance, and 139% free cash flow conversion, but declining revenue of negative 9% and PACCAR/Peterbilt supplier concentration risk limit the fundamental case even as near-term technicals are constructive.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company beat earnings estimates in all 4 of the last 4 quarters with average positive surprises well above 50%, based on the historical earnings data available, reflecting disciplined cost management in truck dealership operations. Earnings | Earnings per share continues to beat analyst estimates in at least 3 of the next 4 quarters, maintaining the beat track record into the commercial vehicle cycle. | →Stable |
| CounterRevenue is declining at negative 9% year over year, suggesting new vehicle unit volume is declining; the earnings beats may reflect cost controls that have limited room to compensate further if revenue erosion continues. | ||
Momentum score is 8.0 with rising on-balance volume, the stock trading above its 200-day moving average, and an RSI at 72 indicating strong near-term price strength and broad institutional participation in the uptrend. Momentum breakdown | Momentum score remains above 6.5 and on-balance volume continues rising over the next 6 months, confirming sustained institutional accumulation. | →Stable |
| CounterAn RSI of 72 indicates overbought conditions in a business with declining revenue of negative 9%, suggesting the momentum may be stretched relative to fundamental earnings power and vulnerable to a mean-reversion correction. | ||
Free cash flow conversion runs at 139% of net income, indicating the business generates meaningfully more cash than reported earnings, which supports financial flexibility in a capital-intensive truck dealership model. Quality breakdown | Free cash flow as a percentage of net income remains above 100% over the next 12 months, sustaining cash generation in excess of reported earnings. | →Stable |
| CounterDeclining revenue of negative 9% could pressure service and parts volumes over time, narrowing the free cash flow advantage as the cycle-driven volume decline extends beyond new vehicle sales into the more stable aftermarket business. | ||
Reliance on PACCAR and Peterbilt as the primary supplier is a documented high concentration risk, and with revenue declining 9% year over year, growth prospects are currently constrained by the commercial truck market cycle. Growth breakdown | Revenue growth turns positive within 12 months, recovering to at least 5% growth as commercial truck demand normalizes from cyclical lows. | →Stable |
| CounterCommercial truck cycles can extend for multiple years, and a concentrated single-manufacturer relationship means the dealership cannot easily substitute to alternative brands if PACCAR production or demand lags broader industry recovery. | ||
The company beat earnings estimates in all 4 of the last 4 quarters with average positive surprises well above 50%, based on the historical earnings data available, reflecting disciplined cost management in truck dealership operations.
→StableEarnings
- Expectation
- Earnings per share continues to beat analyst estimates in at least 3 of the next 4 quarters, maintaining the beat track record into the commercial vehicle cycle.
CounterRevenue is declining at negative 9% year over year, suggesting new vehicle unit volume is declining; the earnings beats may reflect cost controls that have limited room to compensate further if revenue erosion continues.
Momentum score is 8.0 with rising on-balance volume, the stock trading above its 200-day moving average, and an RSI at 72 indicating strong near-term price strength and broad institutional participation in the uptrend.
→StableMomentum breakdown
- Expectation
- Momentum score remains above 6.5 and on-balance volume continues rising over the next 6 months, confirming sustained institutional accumulation.
CounterAn RSI of 72 indicates overbought conditions in a business with declining revenue of negative 9%, suggesting the momentum may be stretched relative to fundamental earnings power and vulnerable to a mean-reversion correction.
Free cash flow conversion runs at 139% of net income, indicating the business generates meaningfully more cash than reported earnings, which supports financial flexibility in a capital-intensive truck dealership model.
→StableQuality breakdown
- Expectation
- Free cash flow as a percentage of net income remains above 100% over the next 12 months, sustaining cash generation in excess of reported earnings.
CounterDeclining revenue of negative 9% could pressure service and parts volumes over time, narrowing the free cash flow advantage as the cycle-driven volume decline extends beyond new vehicle sales into the more stable aftermarket business.
Reliance on PACCAR and Peterbilt as the primary supplier is a documented high concentration risk, and with revenue declining 9% year over year, growth prospects are currently constrained by the commercial truck market cycle.
→StableGrowth breakdown
- Expectation
- Revenue growth turns positive within 12 months, recovering to at least 5% growth as commercial truck demand normalizes from cyclical lows.
CounterCommercial truck cycles can extend for multiple years, and a concentrated single-manufacturer relationship means the dealership cannot easily substitute to alternative brands if PACCAR production or demand lags broader industry recovery.
Per-dimension breakdown
Quality
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.0 |
| ROA | 3.5 |
| Gross margin | 0.0 |
| Op margin | 2.0 |
| Net margin | 1.8 |
| Current ratio | 5.4 |
| FCF quality | 9.6 |
| Moat | 3.9 |
| Piotroski F | 6.7 |
- ▸Excellent cash conversion: 139% FCF/NI
- ▸No competitive moat
Growth
1.7/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 0.3 |
| EPS growth | 3.1 |
- ▸Declining revenue: -9%
Momentum
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.1 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 2.3 |
- ▸Overbought (RSI 79)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
5.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| erm sentiment | 5.0 |
Insider
5.0/10data confidence 50%Peer rank
3.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.5 |
| quality rank | 4.7 |
| growth rank | 0.0 |
Technical
3.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.6 |
| support resistance | 0.0 |
| 52w position | 8.9 |
Risk (lower is worse)
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.2 |
| days to cover | 9.0 |
| volatility | 4.9 |
| beta | 7.6 |
| debt equity | 7.2 |
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 5.2 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 106.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:7.1>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:35d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (2)
- ASYMMETRY:UPSIDE_EXHAUSTED (upside=0.0%)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
0.00
Upside
+0.0%
Downside
15.0%
Sizing output
AVOID
SetupUNKNOWN — No clear chart pattern; technical signals are mixed
EdgeNO_EDGE — No clear edge identified
SuitabilityMODERATE — Balanced profile
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 7.6) was not enough to lift the adjusted overall above the threshold. Current asymmetry R:R is 0.00 — supplementary context, not the trigger for this path.
The strongest dimensions are Risk (lower is worse) at 7.6, Momentum at 7.1, and Catalyst at 7.0; the weakest are Growth at 1.7, Technical at 3.2, and Peer rank at 3.3. The V9 engine cleared all gates with 2 warnings, producing an asymmetric reward-to-risk of 0.00 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Momentum score is 8.0 with rising on-balance volume, the stock trading above its 200-day moving average, and an RSI at 72 indicating strong near-term price strength and broad institutional participation in the uptrend.
Trip ifMomentum score drops below 5.5, more than 2.5 points below the current 8.0, indicating the overbought RSI has resolved through a meaningful price decline rather than consolidation.
- P2The company beat earnings estimates in all 4 of the last 4 quarters with average positive surprises well above 50%, based on the historical earnings data available, reflecting disciplined cost management in truck dealership operations.
Trip ifEPS surprise falls below 0% in at least 2 of the next 4 quarters, indicating the earnings beat pattern has ended.
- P3Free cash flow conversion runs at 139% of net income, indicating the business generates meaningfully more cash than reported earnings, which supports financial flexibility in a capital-intensive truck dealership model.
Trip ifFree cash flow as a percentage of net income falls below 80%, more than 59 percentage points below the current 139% level.
- P4Reliance on PACCAR and Peterbilt as the primary supplier is a documented high concentration risk, and with revenue declining 9% year over year, growth prospects are currently constrained by the commercial truck market cycle.
Trip ifRevenue decline rate worsens beyond negative 15% year over year for at least 2 consecutive quarters, indicating the commercial truck cycle downturn is deepening.