Value
7.8/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 8.0 |
| Fwd P/E | 4.2 |
| PEG | 10.0 |
| Analyst target | 9.0 |
- ▸Forward P/E: 28.8x
- ▸PEG: 0.23
- ▸Attractively valued
AADX · Why this verdict
Why Applied Aerospace & Defense, In (AADX) 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 score6.1/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Quality below floor (3.7 < 4.0): operating and net margins score 0.0 and gross margin 1.1, so the business converts little revenue into profit. Bear case | Quality score should climb above the 4.0 floor over 12 months as margins turn positive. | ↓Deteriorating |
| CounterGrowth-stage defense suppliers often run thin or negative margins while scaling; the missed quarter (EPS -0.25 vs +0.01 estimate) suggests margins may not improve soon. | ||
Strong growth: 47% YoY, with quarterly revenue rising from $113.5M to $167.3M and an industry growth leader peer ranking. Growth breakdown | Quarterly revenue should reach at least the $171M next-quarter estimate and keep growing above 30% YoY. | →Stable |
| CounterPart of the revenue base is provisional and growth may be acquisition-driven, so organic growth could be far weaker than the headline. | ||
The stock trades 77.4% below its analyst-derived $22.40 take-profit target, with an asymmetry ratio of 7.72, implying substantial re-rating potential if estimates hold. Upside pct | Price should close part of the gap to the $22.40 target over 12 months as earnings stabilize. | Tripped→Stable |
| CounterAnalyst targets on a recently listed small-cap are often stale and optimistic, and the engine still scores no edge and recommends avoiding the position. | ||
The latest quarter missed badly (EPS -0.25 vs +0.01 estimate) and implied volatility is 105% with a 2.33 put/call ratio, so near-term risk is skewed to the downside. Last 4 quarters | The next report on 2026-11-11 should show EPS at or above estimates and put/call should normalize. | ↓Deteriorating |
| CounterWith only one reported quarter, a single miss may be a one-time charge rather than a trend, and heavy put buying may be hedging rather than a bearish signal. | ||
A 48% drawdown from the 52-week high classes the stock as speculative, capping position size even though momentum just clears its 5.5 gate. Suitability rationale | Price should stabilize and the 52-week position score of 0.4 should improve as momentum holds at or above 5.5. | Tripped→Stable |
| CounterA drawdown this deep can reflect a valuation reset that is not finished; weak RSI at 3.6 and no chart pattern show no buyer support yet. | ||
Quality below floor (3.7 < 4.0): operating and net margins score 0.0 and gross margin 1.1, so the business converts little revenue into profit.
↓DeterioratingBear case
- Expectation
- Quality score should climb above the 4.0 floor over 12 months as margins turn positive.
CounterGrowth-stage defense suppliers often run thin or negative margins while scaling; the missed quarter (EPS -0.25 vs +0.01 estimate) suggests margins may not improve soon.
Strong growth: 47% YoY, with quarterly revenue rising from $113.5M to $167.3M and an industry growth leader peer ranking.
→StableGrowth breakdown
- Expectation
- Quarterly revenue should reach at least the $171M next-quarter estimate and keep growing above 30% YoY.
CounterPart of the revenue base is provisional and growth may be acquisition-driven, so organic growth could be far weaker than the headline.
The stock trades 77.4% below its analyst-derived $22.40 take-profit target, with an asymmetry ratio of 7.72, implying substantial re-rating potential if estimates hold.
Tripped→StableUpside pct
- Expectation
- Price should close part of the gap to the $22.40 target over 12 months as earnings stabilize.
CounterAnalyst targets on a recently listed small-cap are often stale and optimistic, and the engine still scores no edge and recommends avoiding the position.
The latest quarter missed badly (EPS -0.25 vs +0.01 estimate) and implied volatility is 105% with a 2.33 put/call ratio, so near-term risk is skewed to the downside.
↓DeterioratingLast 4 quarters
- Expectation
- The next report on 2026-11-11 should show EPS at or above estimates and put/call should normalize.
CounterWith only one reported quarter, a single miss may be a one-time charge rather than a trend, and heavy put buying may be hedging rather than a bearish signal.
A 48% drawdown from the 52-week high classes the stock as speculative, capping position size even though momentum just clears its 5.5 gate.
Tripped→StableSuitability rationale
- Expectation
- Price should stabilize and the 52-week position score of 0.4 should improve as momentum holds at or above 5.5.
CounterA drawdown this deep can reflect a valuation reset that is not finished; weak RSI at 3.6 and no chart pattern show no buyer support yet.
Per-dimension breakdown
Quality
3.7/10data confidence 86%| Component | Sub-score |
|---|---|
| Gross margin | 1.1 |
| Op margin | 0.0 |
| Net margin | 0.0 |
| Current ratio | 8.5 |
| Moat | 5.8 |
| Piotroski F | 6.7 |
Growth
10.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 10.0 |
- ▸Strong growth: 47% YoY
Momentum
2.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 7.2 |
| OBV | 1.0 |
| MA position | 2.5 |
| Volume | 0.2 |
- ▸Volume distribution (falling OBV)
Sentiment
7.8/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.9 |
| Price target | 10.0 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (8.0) — signal dampened
- ▸Analyst upside: 112%
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
4.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.9 |
| quality rank | 0.9 |
| growth rank | 8.0 |
- ▸Industry growth leader
Technical
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.1 |
| support resistance | 7.9 |
| 52w position | 0.0 |
Risk (lower is worse)
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| days to cover | 9.1 |
| volatility | 0.0 |
| put call | 0.0 |
| implied vol | 1.2 |
| max pain risk | 3.0 |
| debt equity | 7.9 |
- ▸Elevated put/call: 2.50
- ▸High IV: 73%
- ▸Above max pain $8
Catalyst
2.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (7)
- ASYMMETRY:7.6>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:31d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- MOMENTUM:2.9<4.5
Warning (0)
none
Reward-to-Risk
7.58
Upside
+84.3%
Downside
11.1%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeInst Constrain — Small cap ($2.0B) below institutional reach
SuitabilitySpeculative — Drawdown -53% (>40% off 52w high)
Investment implication
The SELL_IF_HOLDING verdict reflects the MOMENTUM gate's 2.9<4.5 outcome against Growth at 10.0 and asymmetric R:R of 7.58.
The strongest dimensions are Growth at 10.0, Value at 7.8, and Sentiment at 7.8; the weakest are Catalyst at 2.5, Momentum at 2.9, and Risk (lower is worse) at 3.5. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of 7.58 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Quality Below Engine Floor
Trip ifQuality score rises above 4.0 from current 3.7.
- P2Strong Revenue Growth
Trip ifQuarterly revenue growth falls below 20% YoY from the current ~47%.
- P3Large Analyst Upside GapTripped
Trip ifAnalyst-derived upside falls below 15% from the current 77.4% without a price rise.
- P4Earnings Miss And High Volatility
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P5Deep Drawdown Speculative ProfileTripped
Trip ifShare price falls below the $11.75 stop level from current $12.63.