Value
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 0.0 |
| P/S | 8.7 |
| EV/EBITDA | 1.4 |
| Fwd P/E | 5.2 |
| PEG | 10.0 |
| Analyst target | 6.0 |
- ▸Forward P/E: 24.3x
- ▸PEG: 0.24
TTI · Why this verdict
Why Tetra Technologies (TTI) 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 score5.2/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Tetra Technologies has a strong Piotroski score and positive volume accumulation, but an earnings quality red flag with free cash flow at only 3% of net income, a put/call ratio of 4.41, and below-floor business quality make this a position to exit rather than hold.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Free cash flow represents only 3% of net income, a severe earnings quality warning that suggests reported profits are not being converted into cash, raising the risk that GAAP earnings overstate economic performance. Quality breakdown | Free cash flow conversion improves to at least 40% of net income within the next 2 annual reporting periods. | →Stable |
| CounterIndustrial conglomerates often carry elevated working capital during growth phases; a low FCF-to-net-income ratio may be transitory if capital expenditures normalize. | ||
A put/call ratio of 4.41 and implied volatility of 119% are among the highest readings in the batch, signaling that options market participants are positioned with extreme bearish hedges relative to bullish bets, reflecting deep uncertainty about the stock's near-term direction. Risk breakdown | The put/call ratio falls below 2.0 within the next 3 months as the bearish hedging unwinds after a positive catalyst. | →Stable |
| CounterExtreme put/call ratios occasionally reflect institutional hedging of existing long positions rather than outright bearish speculation, and may normalize without a price decline. | ||
Despite the weak fundamentals, on-balance volume is rising and the stock is trading above its 200-day moving average, suggesting that some buyers are accumulating shares ahead of what they expect to be a recovery catalyst. Momentum breakdown | Volume accumulation continues and the RSI remains above 45 for at least 8 consecutive weeks, confirming constructive price action. | →Stable |
| CounterRising on-balance volume in a low-quality business can reflect short-covering or speculative momentum rather than genuine long-term institutional buying. | ||
Upside to the analyst target is only 4.5% against a 7% downside to the stop loss, producing a reward-to-risk ratio of 0.64, which means the position does not offer adequate compensation for the business quality risks already identified. Targets | Analyst price targets rise above $12, expanding upside to more than 18% from the current $10.16 and improving the risk-reward ratio above 1.5. | →Stable |
| CounterAnalyst targets in small industrial conglomerates are often stale and may be revised sharply higher if the company delivers a positive earnings surprise. | ||
Free cash flow represents only 3% of net income, a severe earnings quality warning that suggests reported profits are not being converted into cash, raising the risk that GAAP earnings overstate economic performance.
→StableQuality breakdown
- Expectation
- Free cash flow conversion improves to at least 40% of net income within the next 2 annual reporting periods.
CounterIndustrial conglomerates often carry elevated working capital during growth phases; a low FCF-to-net-income ratio may be transitory if capital expenditures normalize.
A put/call ratio of 4.41 and implied volatility of 119% are among the highest readings in the batch, signaling that options market participants are positioned with extreme bearish hedges relative to bullish bets, reflecting deep uncertainty about the stock's near-term direction.
→StableRisk breakdown
- Expectation
- The put/call ratio falls below 2.0 within the next 3 months as the bearish hedging unwinds after a positive catalyst.
CounterExtreme put/call ratios occasionally reflect institutional hedging of existing long positions rather than outright bearish speculation, and may normalize without a price decline.
Despite the weak fundamentals, on-balance volume is rising and the stock is trading above its 200-day moving average, suggesting that some buyers are accumulating shares ahead of what they expect to be a recovery catalyst.
→StableMomentum breakdown
- Expectation
- Volume accumulation continues and the RSI remains above 45 for at least 8 consecutive weeks, confirming constructive price action.
CounterRising on-balance volume in a low-quality business can reflect short-covering or speculative momentum rather than genuine long-term institutional buying.
Upside to the analyst target is only 4.5% against a 7% downside to the stop loss, producing a reward-to-risk ratio of 0.64, which means the position does not offer adequate compensation for the business quality risks already identified.
→StableTargets
- Expectation
- Analyst price targets rise above $12, expanding upside to more than 18% from the current $10.16 and improving the risk-reward ratio above 1.5.
CounterAnalyst targets in small industrial conglomerates are often stale and may be revised sharply higher if the company delivers a positive earnings surprise.
Per-dimension breakdown
Quality
3.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.0 |
| ROA | 3.5 |
| Gross margin | 2.1 |
| Op margin | 3.3 |
| Net margin | 0.6 |
| Current ratio | 7.1 |
| FCF quality | 0.2 |
| Moat | 3.9 |
| Piotroski F | 8.9 |
- ▸Earnings quality RED FLAG: 3% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 8/9
Growth
6.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.3 |
| EPS growth | 10.0 |
- ▸Declining revenue: -1%
Momentum
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 3.3 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 1.4 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.1 |
| Price target | 8.2 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (4.0) — signal dampened
- ▸Analyst upside: 25%
Insider
5.2/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.5 |
| holder change | 5.0 |
- ▸Insider buying (low materiality) — $216,898 (0.014% of mkt cap)
Peer rank
2.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.2 |
| quality rank | 1.1 |
| growth rank | 1.1 |
Technical
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 6.4 |
| support resistance | 5.9 |
| 52w position | 5.9 |
Risk (lower is worse)
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.1 |
| days to cover | 5.2 |
| volatility | 0.0 |
| put call | 10.0 |
| implied vol | 3.3 |
| max pain risk | 3.0 |
| beta | 6.2 |
| debt equity | 6.3 |
- ▸High IV: 60%
- ▸Above max pain $2
Catalyst
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (7)
- MOMENTUM:5.2>=4.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:34d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.7<1.5@spot
Warning (1)
- MOMENTUM:5.2<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
0.65
Upside
+6.5%
Downside
10.0%
Sizing output
AVOID
SetupRANGE_BOUND — RSI 54 mid-range, Bollinger mid-band
EdgeNO_EDGE — No clear edge identified
SuitabilityAGGRESSIVE — MCap $1.5B<$5B
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Catalyst at 7.5 could not lift the engine output above the verdict floor. Failed gate signal: ASYMMETRY:0.7<1.5@spot.
The strongest dimensions are Catalyst at 7.5, Sentiment at 6.9, and Growth at 6.2; the weakest are Peer rank at 2.4, Quality at 3.4, and Risk (lower is worse) at 5.1. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 0.65 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Free cash flow represents only 3% of net income, a severe earnings quality warning that suggests reported profits are not being converted into cash, raising the risk that GAAP earnings overstate economic performance.
Trip ifFree cash flow remains below 20% of net income for more than 3 consecutive quarters.
- P2A put/call ratio of 4.41 and implied volatility of 119% are among the highest readings in the batch, signaling that options market participants are positioned with extreme bearish hedges relative to bullish bets, reflecting deep uncertainty about the stock's near-term direction.
Trip ifPut/call ratio rises above 5.0 within the next 60 days.
- P3Despite the weak fundamentals, on-balance volume is rising and the stock is trading above its 200-day moving average, suggesting that some buyers are accumulating shares ahead of what they expect to be a recovery catalyst.
Trip ifStock price drops below $9, more than 11% below the current $10.16, breaking below the 200-day moving average support.
- P4Upside to the analyst target is only 4.5% against a 7% downside to the stop loss, producing a reward-to-risk ratio of 0.64, which means the position does not offer adequate compensation for the business quality risks already identified.
Trip ifAnalyst price targets fall below $10.00, bringing expected upside to less than 0% from current levels.