Value
7.9/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 8.5 |
| P/S | 7.7 |
| Fwd P/E | 9.4 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 9.1x
- ▸PEG: 0.08
- ▸Attractively valued
AROW · Why this verdict
Why Arrow Financial (AROW) 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 score5.5/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Arrow Financial is a small regional bank with a perfect 4-quarter earnings beat streak and a cheap valuation on a growth basis, but the technical setup has already reached its analyst target with negative risk/reward on the engine's own asymmetry gate.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Arrow Financial has beaten earnings estimates in each of the last 4 quarters, most recently by 3.8%, showing consistent execution against consensus. Bull case | The beat streak extends through the next couple of reported quarters rather than breaking. | →Stable |
| CounterA small regional bank's beat streak can end abruptly once loan-loss provisions or net interest margin normalize, and the analyst target has already been reached, leaving little room for a positive surprise to matter. | ||
The stock trades at a forward P/E of 9.5x with a PEG of 0.08, which the value model flags as attractively valued relative to its growth rate. Valuation breakdown | The forward multiple expands toward peer regional-bank averages as the growth story gains recognition. | →Stable |
| CounterA PEG this low can also signal the market doesn't trust the growth is durable for a small bank, and the multiple could stay compressed rather than re-rate. | ||
AROW posted 29% YoY earnings growth per the growth score notes, well above what is typical for a small regional bank. Growth breakdown | Earnings growth continues at a double-digit YoY pace in coming quarters rather than reverting toward the sector average. | Tripped→Stable |
| CounterGrowth of this magnitude at a small bank is often driven by one-time items like loan-loss reserve releases rather than a repeatable trend and could mean-revert quickly. | ||
The V9 asymmetry gate failed at -1.29 and the analyst target has already been reached with only -15.6% implied upside, per the V8 warning. Warnings | The price stalls or pulls back toward the stop-loss zone rather than pushing meaningfully higher over the next 12 months. | ↓Deteriorating |
| CounterContinued earnings beats typically drive analyst target revisions upward, which would restore positive asymmetry and invalidate the priced-in thesis. | ||
The stock is in a golden-cross breakout, above all moving averages with RSI 69 and bullish MACD, per the engine's setup rationale. Chart pattern detection | The momentum score, currently 6.4, stays above the 5.5 threshold and price holds above its rising moving averages. | →Stable |
| CounterRSI near 69 alongside modest insider selling flags late-cycle distribution risk; momentum this extended often precedes a pullback rather than continuation. | ||
Arrow Financial has beaten earnings estimates in each of the last 4 quarters, most recently by 3.8%, showing consistent execution against consensus.
→StableBull case
- Expectation
- The beat streak extends through the next couple of reported quarters rather than breaking.
CounterA small regional bank's beat streak can end abruptly once loan-loss provisions or net interest margin normalize, and the analyst target has already been reached, leaving little room for a positive surprise to matter.
The stock trades at a forward P/E of 9.5x with a PEG of 0.08, which the value model flags as attractively valued relative to its growth rate.
→StableValuation breakdown
- Expectation
- The forward multiple expands toward peer regional-bank averages as the growth story gains recognition.
CounterA PEG this low can also signal the market doesn't trust the growth is durable for a small bank, and the multiple could stay compressed rather than re-rate.
AROW posted 29% YoY earnings growth per the growth score notes, well above what is typical for a small regional bank.
Tripped→StableGrowth breakdown
- Expectation
- Earnings growth continues at a double-digit YoY pace in coming quarters rather than reverting toward the sector average.
CounterGrowth of this magnitude at a small bank is often driven by one-time items like loan-loss reserve releases rather than a repeatable trend and could mean-revert quickly.
The V9 asymmetry gate failed at -1.29 and the analyst target has already been reached with only -15.6% implied upside, per the V8 warning.
↓DeterioratingWarnings
- Expectation
- The price stalls or pulls back toward the stop-loss zone rather than pushing meaningfully higher over the next 12 months.
CounterContinued earnings beats typically drive analyst target revisions upward, which would restore positive asymmetry and invalidate the priced-in thesis.
The stock is in a golden-cross breakout, above all moving averages with RSI 69 and bullish MACD, per the engine's setup rationale.
→StableChart pattern detection
- Expectation
- The momentum score, currently 6.4, stays above the 5.5 threshold and price holds above its rising moving averages.
CounterRSI near 69 alongside modest insider selling flags late-cycle distribution risk; momentum this extended often precedes a pullback rather than continuation.
Per-dimension breakdown
Quality
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.0 |
| ROA | 0.8 |
| Gross margin | 0.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Moat | 4.2 |
| Piotroski F | 8.9 |
- ▸Strong margins: 30%
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 8/9
Growth
3.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.7 |
| EPS growth | 2.3 |
Momentum
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 7.7 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 4.0 |
| Volume | 6.7 |
- ▸Uptrend pullback (RSI 38) - buy opportunity
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 6.6 |
| erm sentiment | 5.0 |
Insider
7.2/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Modest insider selling — $158,605 (0.025% of mkt cap)
- ▸Institutions accumulating
Peer rank
4.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.3 |
| quality rank | 5.3 |
| growth rank | 1.5 |
Technical
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 7.9 |
| support resistance | 6.6 |
| 52w position | 8.4 |
Risk (lower is worse)
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.7 |
| days to cover | 7.1 |
| volatility | 5.8 |
| implied vol | 1.2 |
| beta | 8.5 |
- ▸High IV: 73%
Catalyst
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 6.5 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 3.3 |
| dividend safety | 5.5 |
- ▸Strong earnings: 3B/1M
- ▸Dividend: 3.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:78d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:3.9<4.5
- ASYMMETRY:-1.0=NEGATIVE
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-1.02
Upside
-5.4%
Downside
5.3%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeInst Constrain — Small cap ($0.6B) below institutional reach
SuitabilityAggressive — MCap $0.6B<$5B
Investment implication
The F-path SELL output reflects an overall score of 5.5 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 7.9) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:3.9<4.5, ASYMMETRY:-1.0=NEGATIVE) reinforce the read. Current asymmetry R:R is -1.02 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 7.9, Technical at 7.6, and Insider at 7.2; the weakest are Growth at 3.0, Momentum at 3.9, and Peer rank at 4.3. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of -1.02 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Earnings Beat Streak
Trip ifEPS surprise stays below 0% for 2 consecutive quarters, ending the current 4-quarter beat streak.
- P2Cheap Growth Adjusted Valuation
Trip ifForward P/E compresses below 8x from the current 9.5x.
- P3Strong Yoy Earnings GrowthTripped
Trip ifEarnings growth falls below 10% YoY, down from the current 29% pace.
- P4Upside Already Priced In
Trip ifAsymmetry ratio falls below -2.0, worsening from the current -1.29.
- P5Technical Breakout Momentum
Trip ifMomentum score falls below 5.5, down from the current 6.4, ending the breakout setup.