Value
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.4 |
| P/S | 9.7 |
| EV/EBITDA | 4.3 |
| Fwd P/E | 8.4 |
| PEG | 5.8 |
| Analyst target | 6.0 |
- ▸Forward P/E: 13.7x
- ▸PEG: 1.30
ASTE · Why this verdict
Why Astec Industries (ASTE) 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 score5.0/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The overall quality score of 3.3 sits below the minimum acceptable threshold of 4.0, with only 11% of net income converting into free cash flow — identified as an earnings quality red flag — and peer quality ranking in the bottom decile of its peer group. Quality breakdown | Quality score rises above 4.0 and free cash flow as a percentage of net income rises above 30% for 2 consecutive quarters, clearing the minimum threshold. | →Stable |
| CounterA Piotroski F-Score of 7 out of 9 shows the business passes most traditional financial health checks; the low cash conversion may reflect timing differences rather than structural impairment of the underlying operations. | ||
Approximately 17% headroom remains to the analyst price target with a risk/reward of roughly 2.5-to-1 in the bulls' favor, and the momentum score passes at 6.7 — volume is accumulating and the stock is above the 200-day moving average. Price targets | Price rises above $61 (the analyst target) within 12 months, closing the upside gap. | →Stable |
| CounterFavorable headline risk/reward is undermined by quality below the minimum floor and an elevated put/call ratio of 2.00 signaling heavy bearish options positioning, which may suppress the recovery. | ||
Three consecutive quarters of strong positive surprises — including beats of +59%, +24%, and +28% — were followed by a miss of -35% in the most recent quarter, breaking the established pattern and introducing uncertainty about whether the prior delivery was repeatable. Earnings | EPS surprise exceeds 10% in each of the next 2 consecutive quarters, restoring the beat pattern. | →Stable |
| CounterThree consecutive large beats before the most recent miss suggest management had developed genuine guidance discipline; a single quarter miss may be noise rather than a structural inflection, especially with an average surprise of +19% across the full period. | ||
Implied volatility at 123% is among the highest observable levels and the put/call ratio stands at 2.00, signaling that the options market is pricing in very high near-term uncertainty and that bearish hedges significantly outnumber bullish ones. Risk breakdown | Implied volatility falls below 60% and the put/call ratio drops below 1.0 for 30 consecutive days, indicating uncertainty has been resolved. | →Stable |
| CounterExtreme implied volatility can reflect event-driven uncertainty around a specific catalyst; if the underlying concern resolves, the volatility collapse itself could contribute to upside price movement. | ||
The overall quality score of 3.3 sits below the minimum acceptable threshold of 4.0, with only 11% of net income converting into free cash flow — identified as an earnings quality red flag — and peer quality ranking in the bottom decile of its peer group.
→StableQuality breakdown
- Expectation
- Quality score rises above 4.0 and free cash flow as a percentage of net income rises above 30% for 2 consecutive quarters, clearing the minimum threshold.
CounterA Piotroski F-Score of 7 out of 9 shows the business passes most traditional financial health checks; the low cash conversion may reflect timing differences rather than structural impairment of the underlying operations.
Approximately 17% headroom remains to the analyst price target with a risk/reward of roughly 2.5-to-1 in the bulls' favor, and the momentum score passes at 6.7 — volume is accumulating and the stock is above the 200-day moving average.
→StablePrice targets
- Expectation
- Price rises above $61 (the analyst target) within 12 months, closing the upside gap.
CounterFavorable headline risk/reward is undermined by quality below the minimum floor and an elevated put/call ratio of 2.00 signaling heavy bearish options positioning, which may suppress the recovery.
Three consecutive quarters of strong positive surprises — including beats of +59%, +24%, and +28% — were followed by a miss of -35% in the most recent quarter, breaking the established pattern and introducing uncertainty about whether the prior delivery was repeatable.
→StableEarnings
- Expectation
- EPS surprise exceeds 10% in each of the next 2 consecutive quarters, restoring the beat pattern.
CounterThree consecutive large beats before the most recent miss suggest management had developed genuine guidance discipline; a single quarter miss may be noise rather than a structural inflection, especially with an average surprise of +19% across the full period.
Implied volatility at 123% is among the highest observable levels and the put/call ratio stands at 2.00, signaling that the options market is pricing in very high near-term uncertainty and that bearish hedges significantly outnumber bullish ones.
→StableRisk breakdown
- Expectation
- Implied volatility falls below 60% and the put/call ratio drops below 1.0 for 30 consecutive days, indicating uncertainty has been resolved.
CounterExtreme implied volatility can reflect event-driven uncertainty around a specific catalyst; if the underlying concern resolves, the volatility collapse itself could contribute to upside price movement.
TrendMatrix Research · core thesis
Engine thesis — one sentence
The stock offers 17% upside to the analyst target and passing technical momentum, but the business falls below the minimum quality threshold with only 11% of net income converting to free cash flow, and the most recent earnings quarter missed by -35% after three prior consecutive beats — the quality deficit is the dominant concern.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
3.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.3 |
| ROA | 2.8 |
| Gross margin | 1.3 |
| Op margin | 1.5 |
| Net margin | 0.9 |
| Current ratio | 8.0 |
| FCF quality | 0.8 |
| Moat | 5.6 |
| Piotroski F | 7.8 |
- ▸Earnings quality RED FLAG: 11% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
3.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 7.6 |
| EPS growth | 0.0 |
- ▸Strong growth: 20% YoY
Momentum
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 1.6 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.1 |
| Price target | 8.3 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (4.0) — signal dampened
- ▸Analyst upside: 26%
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
4.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.1 |
| quality rank | 3.2 |
| growth rank | 7.1 |
Technical
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.7 |
| support resistance | 4.0 |
| 52w position | 7.6 |
Risk (lower is worse)
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.7 |
| days to cover | 8.1 |
| volatility | 2.4 |
| put call | 0.0 |
| implied vol | 2.7 |
| beta | 5.6 |
| debt equity | 7.5 |
- ▸Elevated put/call: 2.00
- ▸High IV: 64%
Catalyst
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 4.8 |
- ▸Strong earnings: 3B/1M
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (6)
- MOMENTUM:5.3>=4.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:32d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.5<1.5@spot
Warning (2)
- MOMENTUM:5.3<5.5 (soft — BUY_NOW allowed but watch)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
0.49
Upside
+7.1%
Downside
14.4%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 70, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.34>1.3, MCap $1.3B<$5B
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Sentiment at 6.9 could not lift the engine output above the verdict floor. Failed gate signal: ASYMMETRY:0.5<1.5@spot.
The strongest dimensions are Sentiment at 6.9, Catalyst at 6.3, and Value at 6.2; the weakest are Quality at 3.3, Growth at 3.8, and Peer rank at 4.6. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of 0.49 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 Floor Poor Cash Conversion
Trip ifQuality score rises above 4.0 and free cash flow relative to net income rises above 30% for 2 consecutive quarters.
- P2Analyst Upside With Momentum
Trip ifPrice rises above $61 (the analyst price target), confirming the upside has been realized.
- P3Beat Streak Broken Most Recent Miss
Trip ifEPS surprise exceeds 10% for each of the next 2 consecutive quarters.
- P4Extreme Implied Volatility Bearish Positioning
Trip ifPut/call ratio falls below 1.0 and implied volatility drops below 60% for 30 consecutive days.