Value
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.7 |
| P/S | 10.0 |
| EV/EBITDA | 5.5 |
| Fwd P/E | 8.9 |
| PEG | 5.8 |
| Analyst target | 3.0 |
- ▸Forward P/E: 12.3x
- ▸PEG: 1.29
ABM · Why this verdict
Why ABM Industries (ABM) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score5.2/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
ABM Industries is a cheaply valued facilities-services company with excellent cash conversion and a dividend-aristocrat record, but thin margins, no moat, a mixed earnings record and a price above the analyst target limit the case.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Quality is 3.8 against a 4.0 floor, with no competitive moat and very thin margins (operating margin component 1.7, net margin 0.9). Quality breakdown | Quality score should rise above 4.0 as margins edge higher over the next 12 months. | →Stable |
| CounterThin margins are structural in labor-intensive facility services, so they do not signal distress by themselves. | ||
Cash conversion is excellent at 169% FCF/NI, giving the dividend and balance sheet room despite thin accounting margins. Quality breakdown | FCF/NI should stay above 120% over the next 12 months. | →Stable |
| CounterHigh FCF/NI on tiny net income can be an artifact of low earnings rather than strong cash generation. | ||
The stock trades at a forward P/E of 12.3x and PEG of 0.48 and is a dividend aristocrat with a 2.2% yield. Catalyst breakdown | The dividend should continue to grow and forward P/E should stay below 15x. | ↑Improving |
| CounterLow-growth service businesses often deserve low multiples, and the 2.2% yield is modest. | ||
Price of $53.48 is above the analyst target of $48.66 (upside_pct -9.0%), giving negative reward-to-risk of -0.87. Warnings | Analysts should raise targets toward the current price, or price should consolidate. | →Stable |
| CounterMomentum of 6.0 and price above the 200-day average suggest the move has support, and analyst coverage is light. | ||
Earnings are mixed with 2 beats and 2 misses over four quarters, while RSI is 77 (overbought) with falling OBV. Momentum breakdown | EPS should beat estimates in the next two quarters, following the $1.04 versus $1.01 expected latest report. | ↓Deteriorating |
| CounterThe last two quarters were both beats, so results may be improving. | ||
Quality is 3.8 against a 4.0 floor, with no competitive moat and very thin margins (operating margin component 1.7, net margin 0.9).
→StableQuality breakdown
- Expectation
- Quality score should rise above 4.0 as margins edge higher over the next 12 months.
CounterThin margins are structural in labor-intensive facility services, so they do not signal distress by themselves.
Cash conversion is excellent at 169% FCF/NI, giving the dividend and balance sheet room despite thin accounting margins.
→StableQuality breakdown
- Expectation
- FCF/NI should stay above 120% over the next 12 months.
CounterHigh FCF/NI on tiny net income can be an artifact of low earnings rather than strong cash generation.
The stock trades at a forward P/E of 12.3x and PEG of 0.48 and is a dividend aristocrat with a 2.2% yield.
↑ImprovingCatalyst breakdown
- Expectation
- The dividend should continue to grow and forward P/E should stay below 15x.
CounterLow-growth service businesses often deserve low multiples, and the 2.2% yield is modest.
Price of $53.48 is above the analyst target of $48.66 (upside_pct -9.0%), giving negative reward-to-risk of -0.87.
→StableWarnings
- Expectation
- Analysts should raise targets toward the current price, or price should consolidate.
CounterMomentum of 6.0 and price above the 200-day average suggest the move has support, and analyst coverage is light.
Earnings are mixed with 2 beats and 2 misses over four quarters, while RSI is 77 (overbought) with falling OBV.
↓DeterioratingMomentum breakdown
- Expectation
- EPS should beat estimates in the next two quarters, following the $1.04 versus $1.01 expected latest report.
CounterThe last two quarters were both beats, so results may be improving.
Per-dimension breakdown
Quality
3.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.1 |
| ROA | 2.7 |
| Gross margin | 0.0 |
| Op margin | 1.7 |
| Net margin | 0.9 |
| Current ratio | 5.3 |
| FCF quality | 10.0 |
| Moat | 3.8 |
| Piotroski F | 6.7 |
- ▸Excellent cash conversion: 169% FCF/NI
- ▸No competitive moat
Growth
5.3/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.6 |
| EPS growth | 7.1 |
Momentum
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.2 |
| MACD | 8.4 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Overbought (RSI 77)
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.4 |
| Analyst rating | 6.7 |
| Price target | 5.3 |
- ▸Light analyst coverage (7.0) — signal dampened
Insider
5.2/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.5 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
4.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 8.4 |
| quality rank | 4.4 |
| growth rank | 3.3 |
Technical
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.3 |
| support resistance | 0.8 |
| 52w position | 9.8 |
| gap | 5.0 |
Risk (lower is worse)
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.7 |
| days to cover | 6.5 |
| volatility | 7.4 |
| put call | 10.0 |
| implied vol | 5.7 |
| beta | 9.1 |
| debt equity | 4.9 |
Catalyst
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 0.1 |
| dividend safety | 8.0 |
| news activity | 8.0 |
- ▸Earnings concerns: 2B/2M
- ▸Dividend aristocrat: 2.2% yield
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (5)
- MOMENTUM:4.5>=4.5
- INSIDER:OK
- EARNINGS_PROXIMITY:41d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.9=NEGATIVE
Warning (2)
- MOMENTUM:4.5<5.5 (soft — BUY_NOW allowed but watch)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.92
Upside
-11.2%
Downside
12.2%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $3.1B<$5B
Investment implication
The SELL_IF_HOLDING verdict reflects the ASYMMETRY gate's -0.9=NEGATIVE outcome against Risk (lower is worse) at 7.3 and asymmetric R:R of -0.92.
The strongest dimensions are Risk (lower is worse) at 7.3, Value at 6.5, and Sentiment at 5.9; the weakest are Quality at 3.8, Technical at 4.2, and Peer rank at 4.5. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of -0.92 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Thin Margins No Moat
Trip ifOperating margin component falls below 1.0 from current 1.7.
- P2Excellent Cash Conversion
Trip ifFCF/NI falls below 100% from current 169%.
- P3Cheap Valuation Dividend Aristocrat
Trip ifForward P/E exceeds 18x from current 12.3x.
- P4Price Above Analyst Target
Trip ifPrice rises more than 20% above the $48.66 analyst target without target increases.
- P5Mixed Earnings Overbought Volume
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.