Value
8.1/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 7.4 |
| P/S | 9.2 |
| EV/EBITDA | 4.4 |
| Fwd P/E | 7.4 |
| PEG | 10.0 |
| Analyst target | 9.0 |
- ▸Forward P/E: 16.7x
- ▸PEG: 0.01
- ▸Attractively valued
TTEK · Why this verdict
Why Tetra Tech (TTEK) 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 score5.2/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Tetra Tech has a four-quarter earnings beat streak with a 10.7% average surprise and an attractive forward P/E of 16.3x with a PEG near zero, but a death cross with negative 3.7% moving average slope and declining revenue signal that the near-term technical environment requires patience before entry.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Tetra Tech has beaten analyst estimates in each of the last four quarters with an average surprise of 10.7%, including back-to-back beats of 11.6% and 13.2%, indicating consistent execution in engineering and construction project delivery. Earnings | The earnings beat streak extends to at least 6 consecutive quarters with average surprise remaining above 6%. | →Stable |
| CounterEngineering and construction revenues are highly project-dependent; a single contract delay or government spending freeze could break the beat streak abruptly. | ||
The stock trades at a forward P/E of 16.3x with a PEG ratio near zero, while delivering a return on equity of 26% and free cash flow conversion of 124% of net income, suggesting the market is undervaluing the durability of Tetra Tech's capital efficiency. Quality breakdown | Return on equity remains above 20% over the next 12 months, confirming the capital efficiency is sustainable. | →Stable |
| CounterA PEG near zero can reflect stale growth estimates or a one-time earnings spike rather than genuine structural undervaluation. | ||
The stock is below its 200-day moving average with the slope declining at negative 3.7% over 30 days and falling on-balance volume, triggering a death cross hard block that reflects sustained institutional selling despite improving fundamental momentum. Momentum breakdown | The stock closes above its 200-day moving average on above-average volume for at least 5 consecutive sessions within the next 4 months. | →Stable |
| CounterThe MACD is already improving from a low base, and RSI at 52 is not deeply oversold, suggesting the recovery setup may be closer than the death cross implies. | ||
Revenue has declined by 5% year over year, the worst growth reading in the assigned batch for an otherwise quality business, which questions whether the project pipeline is contracting or whether government and infrastructure clients are delaying awards. Growth breakdown | Revenue growth turns positive and exceeds 3% year over year within the next 2 reported quarters. | →Stable |
| CounterEngineering firms often see revenue lumpiness tied to multi-year contract cycles; a decline in one period can reverse sharply when a new contract phase begins. | ||
Tetra Tech has beaten analyst estimates in each of the last four quarters with an average surprise of 10.7%, including back-to-back beats of 11.6% and 13.2%, indicating consistent execution in engineering and construction project delivery.
→StableEarnings
- Expectation
- The earnings beat streak extends to at least 6 consecutive quarters with average surprise remaining above 6%.
CounterEngineering and construction revenues are highly project-dependent; a single contract delay or government spending freeze could break the beat streak abruptly.
The stock trades at a forward P/E of 16.3x with a PEG ratio near zero, while delivering a return on equity of 26% and free cash flow conversion of 124% of net income, suggesting the market is undervaluing the durability of Tetra Tech's capital efficiency.
→StableQuality breakdown
- Expectation
- Return on equity remains above 20% over the next 12 months, confirming the capital efficiency is sustainable.
CounterA PEG near zero can reflect stale growth estimates or a one-time earnings spike rather than genuine structural undervaluation.
The stock is below its 200-day moving average with the slope declining at negative 3.7% over 30 days and falling on-balance volume, triggering a death cross hard block that reflects sustained institutional selling despite improving fundamental momentum.
→StableMomentum breakdown
- Expectation
- The stock closes above its 200-day moving average on above-average volume for at least 5 consecutive sessions within the next 4 months.
CounterThe MACD is already improving from a low base, and RSI at 52 is not deeply oversold, suggesting the recovery setup may be closer than the death cross implies.
Revenue has declined by 5% year over year, the worst growth reading in the assigned batch for an otherwise quality business, which questions whether the project pipeline is contracting or whether government and infrastructure clients are delaying awards.
→StableGrowth breakdown
- Expectation
- Revenue growth turns positive and exceeds 3% year over year within the next 2 reported quarters.
CounterEngineering firms often see revenue lumpiness tied to multi-year contract cycles; a decline in one period can reverse sharply when a new contract phase begins.
Per-dimension breakdown
Quality
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 8.5 |
| ROA | 5.9 |
| Gross margin | 0.4 |
| Op margin | 5.0 |
| Net margin | 5.0 |
| Current ratio | 4.8 |
| FCF quality | 9.1 |
| Moat | 5.0 |
| Piotroski F | 6.7 |
- ▸Excellent ROE: 26%
- ▸Excellent cash conversion: 124% FCF/NI
- ▸No competitive moat
Growth
1.3/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 1.3 |
- ▸Declining revenue: -5%
Momentum
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 9.0 |
| OBV | 10.0 |
| MA position | 4.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -3.8%/30d — confirmed downtrend
Sentiment
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 8.0 |
| Analyst rating | 5.0 |
| Price target | 9.4 |
- ▸LLM news sentiment: +0.60 (n=2)
- ▸Analyst upside: 45%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Negligible insider buying — $50,179 (0.001% of mkt cap)
Peer rank
3.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.6 |
| quality rank | 7.2 |
| growth rank | 0.7 |
- ▸Attractive P/E vs peers
Technical
3.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.0 |
| support resistance | 4.0 |
| 52w position | 3.1 |
Risk (lower is worse)
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.2 |
| days to cover | 7.3 |
| volatility | 4.2 |
| put call | 8.9 |
| implied vol | 2.8 |
| max pain risk | 3.0 |
| beta | 7.4 |
| debt equity | 7.4 |
- ▸High IV: 63%
- ▸Above max pain $20
Catalyst
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 7.8 |
| dividend safety | 7.0 |
| news activity | 6.0 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 101.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:5.5>=5.5
- ASYMMETRY:3.9>=1.5
- INSIDER:OK
- EARNINGS_PROXIMITY:34d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (2)
- DEATH_CROSS:momentum=5.5>=5.0 recovering
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
3.88
Upside
+25.9%
Downside
6.7%
Sizing output
AVOID
SetupRECOVERY — Death cross but MACD improving, RSI 52
EdgeNO_EDGE — No clear edge identified
SuitabilityMODERATE — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.2 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. Current asymmetry R:R is 3.88 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 8.1, Sentiment at 7.3, and Catalyst at 6.8; the weakest are Growth at 1.3, Technical at 3.4, and Peer rank at 3.9. The V9 engine cleared all gates with 2 warnings, producing an asymmetric reward-to-risk of 3.88 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Tetra Tech has beaten analyst estimates in each of the last four quarters with an average surprise of 10.7%, including back-to-back beats of 11.6% and 13.2%, indicating consistent execution in engineering and construction project delivery.
Trip ifEPS surprise falls below 0% in at least 2 of the next 4 quarters.
- P2The stock trades at a forward P/E of 16.3x with a PEG ratio near zero, while delivering a return on equity of 26% and free cash flow conversion of 124% of net income, suggesting the market is undervaluing the durability of Tetra Tech's capital efficiency.
Trip ifReturn on equity falls below 15% for at least 2 consecutive quarters.
- P3The stock is below its 200-day moving average with the slope declining at negative 3.7% over 30 days and falling on-balance volume, triggering a death cross hard block that reflects sustained institutional selling despite improving fundamental momentum.
Trip ifStock price drops below $25, more than 10% below the current $28.00, accelerating the downtrend.
- P4Revenue has declined by 5% year over year, the worst growth reading in the assigned batch for an otherwise quality business, which questions whether the project pipeline is contracting or whether government and infrastructure clients are delaying awards.
Trip ifRevenue declines by more than 8% year over year in any reported period over the next 12 months.