Value
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.0 |
| P/S | 8.7 |
| EV/EBITDA | 2.5 |
| Fwd P/E | 4.3 |
| PEG | 4.3 |
| Analyst target | 3.0 |
- ▸Forward P/E: 28.5x
- ▸PEG: 2.25
ACA · Why this verdict
Why Arcosa (ACA) 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 score5.3/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company has beaten consensus estimates in each of the past four quarters, with an average surprise close to 49%, suggesting management is consistently under-promising and over-delivering relative to Wall Street expectations. Earnings | EPS surprise remains positive in each of the next two reported quarters, sustaining the beat streak. | →Stable |
| CounterThe most recent quarter showed an estimate of $0.35 versus actual $0.81 — a 132% beat likely driven by analyst miscalibration; normalizing estimates could sharply narrow future surprise margins. | ||
Free cash flow is running at only 25% of net income, meaning reported profits are converting into cash at an unusually low rate — a signal that earnings quality may be overstated. Quality breakdown | Free cash flow as a percentage of net income recovers to above 60% over the next four quarters, narrowing the earnings-quality gap. | →Stable |
| CounterA Piotroski F-Score of 8 out of 9 reflects broadly improving financial health across multiple dimensions; the low cash conversion may reflect temporary working capital or investment timing rather than structural earnings inflation. | ||
With just under 2% headroom to the near-term resistance target and a reward-to-risk ratio of approximately 0.3-to-1, the geometric setup is unfavorable and does not support initiating or adding to a position at current prices. Price targets | A new higher price target above $145 and upside exceeding 10% would need to emerge before the setup becomes actionable. | →Stable |
| CounterTechnical momentum is constructive — the stock is above its 200-day moving average with a bullish MACD cross — and could break resistance, rendering the current target stale and creating fresh upside. | ||
Revenue is concentrated among wind tower customers, creating a scenario where any demand pause from those customers would hit results disproportionately. Bear case | End-market diversification is visible through revenue growth sustained above 8% annually, indicating the business is not purely dependent on wind energy investment cycles. | →Stable |
| CounterWind energy buildout is a long-cycle, policy-supported theme; if customer volumes hold or expand, concentration translates into predictable, recurring demand rather than an acute vulnerability. | ||
The company has beaten consensus estimates in each of the past four quarters, with an average surprise close to 49%, suggesting management is consistently under-promising and over-delivering relative to Wall Street expectations.
→StableEarnings
- Expectation
- EPS surprise remains positive in each of the next two reported quarters, sustaining the beat streak.
CounterThe most recent quarter showed an estimate of $0.35 versus actual $0.81 — a 132% beat likely driven by analyst miscalibration; normalizing estimates could sharply narrow future surprise margins.
Free cash flow is running at only 25% of net income, meaning reported profits are converting into cash at an unusually low rate — a signal that earnings quality may be overstated.
→StableQuality breakdown
- Expectation
- Free cash flow as a percentage of net income recovers to above 60% over the next four quarters, narrowing the earnings-quality gap.
CounterA Piotroski F-Score of 8 out of 9 reflects broadly improving financial health across multiple dimensions; the low cash conversion may reflect temporary working capital or investment timing rather than structural earnings inflation.
With just under 2% headroom to the near-term resistance target and a reward-to-risk ratio of approximately 0.3-to-1, the geometric setup is unfavorable and does not support initiating or adding to a position at current prices.
→StablePrice targets
- Expectation
- A new higher price target above $145 and upside exceeding 10% would need to emerge before the setup becomes actionable.
CounterTechnical momentum is constructive — the stock is above its 200-day moving average with a bullish MACD cross — and could break resistance, rendering the current target stale and creating fresh upside.
Revenue is concentrated among wind tower customers, creating a scenario where any demand pause from those customers would hit results disproportionately.
→StableBear case
- Expectation
- End-market diversification is visible through revenue growth sustained above 8% annually, indicating the business is not purely dependent on wind energy investment cycles.
CounterWind energy buildout is a long-cycle, policy-supported theme; if customer volumes hold or expand, concentration translates into predictable, recurring demand rather than an acute vulnerability.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Arcosa has posted four consecutive earnings beats with an average positive surprise near 49%, but the stock has reached its near-term price target and the reward-to-risk at roughly 0.3-to-1 leaves virtually no margin for new buyers — patience for a better entry is warranted.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.9 |
| ROA | 2.7 |
| Gross margin | 0.5 |
| Op margin | 3.4 |
| Net margin | 3.8 |
| Current ratio | 7.9 |
| FCF quality | 2.0 |
| Moat | 4.5 |
| Piotroski F | 8.9 |
- ▸Earnings quality RED FLAG: 25% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 8/9
Growth
6.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.6 |
| EPS growth | 10.0 |
Momentum
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.6 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 5.5 |
- ▸Overbought (RSI 88)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.3 |
| Price target | 5.1 |
| erm sentiment | 5.3 |
- ▸Light analyst coverage (4.0) — signal dampened
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
2.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.6 |
| quality rank | 4.2 |
| growth rank | 2.2 |
Technical
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.4 |
| support resistance | 0.8 |
| 52w position | 9.7 |
Risk (lower is worse)
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.3 |
| days to cover | 5.2 |
| volatility | 7.4 |
| put call | 1.0 |
| implied vol | 6.2 |
| beta | 6.8 |
| debt equity | 7.4 |
- ▸Elevated put/call: 1.86
- ▸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: 14.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:7.6>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:33d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.0=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.98
Upside
-14.7%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.3 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Momentum at 7.6) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-1.0=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.98 — supplementary context, not the trigger for this path.
The strongest dimensions are Momentum at 7.6, Catalyst at 7.0, and Growth at 6.8; the weakest are Peer rank at 2.7, Quality at 4.1, and Technical at 4.3. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -0.98 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Consistent Earnings Beat Streak
Trip ifEPS surprise falls below 0% for 2 consecutive reported quarters.
- P2Free Cash Flow Quality Gap
Trip ifFree cash flow as a percentage of net income rises above 60% for 2 consecutive quarters.
- P3Target Reached Poor Asymmetry
Trip ifUpside to price target exceeds 10% and reward-to-risk ratio rises above 1.5.
- P4Wind Tower Customer Concentration
Trip ifAnnual revenue grows more than 15% year-over-year for 2 consecutive fiscal years, indicating end-market diversification beyond wind.