Value
8.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 7.0 |
| P/S | 9.6 |
| EV/EBITDA | 6.2 |
| Fwd P/E | 8.8 |
| PEG | 8.4 |
| Analyst target | 7.5 |
- ▸Forward P/E: 12.5x
- ▸PEG: 0.77
- ▸Attractively valued
ALG · Why this verdict
Why Alamo Group (ALG) 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 score5.5/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Alamo Group is a small-cap machinery maker trading at 12.1x forward earnings with 17.1% upside to the analyst target and a favorable reward-to-risk of 3.41, but earnings have been uneven, growth is weak, and the stock is in a confirmed downtrend ahead of tomorrow's report.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Forward P/E is 12.1x with a PEG of 0.77, scoring 8.1/10 on value and described as attractively valued. Valuation breakdown | Forward earnings are delivered so the forward P/E stays below 14x. | →Stable |
| CounterGrowth scores only 3.1/10 and earnings growth is 1.8/10, so the low PEG rests on forecast growth that has not been shown. | ||
The $147.76 price is 17.1% below the $172.97 analyst target, with just 5.0% downside to the stop for a reward-to-risk of 3.41. Estimated upside | Price rises toward the analyst target after the earnings report. | →Stable |
| CounterLight coverage of about 4 analysts dampens the signal, and the target may be cut if results disappoint. | ||
EPS beat in 2 of the last 4 quarters and missed in 2, including 1.70 versus 2.30 in March 2026, for an average surprise of -4.5%. Avg surprise pct | EPS surprise turns positive and stays above 0% for the next two quarters. | →Stable |
| CounterThe two most recent quarters beat (2.82 versus 2.74, 2.56 versus 2.20), which may show earnings are stabilizing. | ||
The price is below its 200-day average, which is falling 1.7% over 30 days, with a death cross in place and momentum at 4.8/10. Momentum breakdown | The 200-day average slope turns flat and momentum recovers above 5.5. | ↑Improving |
| CounterRising on-balance volume indicates accumulation, and earnings tomorrow could reverse the trend. | ||
Growth scores 3.1/10, with a revenue growth component of 4.4 and an earnings growth component of 1.8. Growth | Revenue growth component recovers above 6 within 12 months. | →Stable |
| CounterFarm and heavy construction machinery is cyclical, so weak growth may be a cycle low that reverses. | ||
Forward P/E is 12.1x with a PEG of 0.77, scoring 8.1/10 on value and described as attractively valued.
→StableValuation breakdown
- Expectation
- Forward earnings are delivered so the forward P/E stays below 14x.
CounterGrowth scores only 3.1/10 and earnings growth is 1.8/10, so the low PEG rests on forecast growth that has not been shown.
The $147.76 price is 17.1% below the $172.97 analyst target, with just 5.0% downside to the stop for a reward-to-risk of 3.41.
→StableEstimated upside
- Expectation
- Price rises toward the analyst target after the earnings report.
CounterLight coverage of about 4 analysts dampens the signal, and the target may be cut if results disappoint.
EPS beat in 2 of the last 4 quarters and missed in 2, including 1.70 versus 2.30 in March 2026, for an average surprise of -4.5%.
→StableAvg surprise pct
- Expectation
- EPS surprise turns positive and stays above 0% for the next two quarters.
CounterThe two most recent quarters beat (2.82 versus 2.74, 2.56 versus 2.20), which may show earnings are stabilizing.
The price is below its 200-day average, which is falling 1.7% over 30 days, with a death cross in place and momentum at 4.8/10.
↑ImprovingMomentum breakdown
- Expectation
- The 200-day average slope turns flat and momentum recovers above 5.5.
CounterRising on-balance volume indicates accumulation, and earnings tomorrow could reverse the trend.
Growth scores 3.1/10, with a revenue growth component of 4.4 and an earnings growth component of 1.8.
→StableGrowth
- Expectation
- Revenue growth component recovers above 6 within 12 months.
CounterFarm and heavy construction machinery is cyclical, so weak growth may be a cycle low that reverses.
Per-dimension breakdown
Quality
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.9 |
| ROA | 3.8 |
| Gross margin | 0.8 |
| Op margin | 4.1 |
| Net margin | 3.0 |
| Current ratio | 8.6 |
| FCF quality | 6.5 |
| Moat | 5.8 |
| Piotroski F | 7.8 |
- ▸Strong Piotroski F-Score: 7/9
Growth
3.1/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.4 |
| EPS growth | 1.8 |
Momentum
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 1.0 |
| Volume | 5.9 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -2.0%/30d — confirmed downtrend
Sentiment
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 4.7 |
| Analyst rating | 6.3 |
| Price target | 9.0 |
- ▸Light analyst coverage (4.0) — signal dampened
- ▸Analyst upside: 37%
Insider
4.1/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 5.7 |
- ▸Modest insider selling — $889,531 (0.048% of mkt cap)
Peer rank
6.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.6 |
| quality rank | 5.8 |
| growth rank | 3.9 |
- ▸Conservative debt levels
Technical
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 6.0 |
| support resistance | 4.7 |
| 52w position | 3.6 |
| gap | 7.5 |
- ▸Extreme gap down (-12.7%) - potential reversal
Risk (lower is worse)
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.0 |
| days to cover | 8.2 |
| volatility | 4.1 |
| put call | 9.2 |
| implied vol | 7.0 |
| beta | 6.7 |
| debt equity | 9.1 |
Catalyst
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| surprise avg | 0.0 |
| dividend safety | 8.5 |
| news activity | 7.0 |
- ▸Earnings concerns: 2B/2M
- ▸Dividend aristocrat: 0.9% yield
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:6.1>=5.5
- ASYMMETRY:1.6>=1.5
- INSIDER:OK
- EARNINGS_PROXIMITY:NO_DATE
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (2)
- DEATH_CROSS:momentum=6.1>=5.0 recovering
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
1.61
Upside
+16.5%
Downside
10.2%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeInst Constrain — Small cap ($1.9B) below institutional reach
SuitabilityAggressive — MCap $1.9B<$5B
Investment implication
The F-path SELL output reflects an overall score of 4.3 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 8.0) was not enough to lift the adjusted overall above the threshold. Current asymmetry R:R is 1.61 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 8.0, Risk (lower is worse) at 7.3, and Sentiment at 6.6; the weakest are Growth at 3.1, Insider at 4.1, and Catalyst at 4.8. The V9 engine cleared all gates with 2 warnings, producing an asymmetric reward-to-risk of 1.61 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Attractive Valuation
Trip ifForward P/E rises above 16x from current 12.1x.
- P2Analyst Upside With Tight Stop
Trip ifShare price falls below the $138.55 stop level, a drop of more than 6.2%.
- P3Uneven Earnings Record
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P4Confirmed Downtrend
Trip ifMomentum score stays below 4.0 for 3 consecutive weekly updates.
- P5Weak Growth Profile
Trip ifGrowth score stays below 3.0 for 4 consecutive quarterly updates.