Value
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 1.0 |
| P/S | 9.9 |
| EV/EBITDA | 1.4 |
| Fwd P/E | 8.2 |
| PEG | 10.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 14.4x
- ▸PEG: 0.13
ASTH · Why this verdict
Why Astrana Health (ASTH) 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 score6.0/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The business falls below the minimum quality threshold at a score of 3.6, with operating margin having compressed by 11.5% and the debt-to-equity ratio at 33 times — identified as value-trap signals — while gross margin scores near the bottom of the quality range with no identified competitive moat. Warnings | Operating margin expands above 0% for 2 consecutive quarters and the quality score rises above 4.0, clearing the minimum threshold. | →Stable |
| CounterThe cash conversion rate is exceptionally strong at 952% of net income converting to free cash flow, suggesting the business may be generating real cash even as reported margins are compressed by non-cash charges or accounting items. | ||
Management has beaten consensus estimates in all four of the last four quarters — most recently by +14%, +29%, +11%, and +21% — with an average positive surprise of approximately 18.5%, demonstrating a consistent pattern of under-promising and over-delivering. Earnings | EPS surprise exceeds 5% for each of the next 2 quarters, extending the perfect beat streak to 6 consecutive quarters. | →Stable |
| CounterWith compressed operating margins and high leverage, the underlying business is under financial pressure; the beat streak may be sustainable only as long as management can set expectations below deteriorating fundamentals, which has limits. | ||
Revenue growing at 56% year over year ranks this company as the top growth performer within its peer group, suggesting meaningful market share capture that justifies investor attention even amid quality concerns. Peer-rank breakdown | Revenue growth stays above 30% year over year for at least 2 of the next 4 quarters, confirming the growth trajectory is durable. | →Stable |
| CounterHigh leverage of 33x debt-to-equity and compressed operating margins mean growth is being financed at potentially high cost; if capital becomes more expensive or revenue growth slows, the leverage burden could become destabilizing. | ||
With only 4.3% headroom to the near-term analyst price target and a risk/reward ratio of 0.61-to-1 — where potential downside exceeds potential upside — the entry geometry is unattractive regardless of the underlying growth narrative. Price targets | Analyst consensus price target is revised upward by more than 20%, creating meaningful headroom above the current price of $38.38. | →Stable |
| CounterIf the perfect beat streak continues and revenue growth sustains above 30%, analysts may materially raise their targets, quickly expanding the 4.3% headroom into a compelling setup. | ||
The business falls below the minimum quality threshold at a score of 3.6, with operating margin having compressed by 11.5% and the debt-to-equity ratio at 33 times — identified as value-trap signals — while gross margin scores near the bottom of the quality range with no identified competitive moat.
→StableWarnings
- Expectation
- Operating margin expands above 0% for 2 consecutive quarters and the quality score rises above 4.0, clearing the minimum threshold.
CounterThe cash conversion rate is exceptionally strong at 952% of net income converting to free cash flow, suggesting the business may be generating real cash even as reported margins are compressed by non-cash charges or accounting items.
Management has beaten consensus estimates in all four of the last four quarters — most recently by +14%, +29%, +11%, and +21% — with an average positive surprise of approximately 18.5%, demonstrating a consistent pattern of under-promising and over-delivering.
→StableEarnings
- Expectation
- EPS surprise exceeds 5% for each of the next 2 quarters, extending the perfect beat streak to 6 consecutive quarters.
CounterWith compressed operating margins and high leverage, the underlying business is under financial pressure; the beat streak may be sustainable only as long as management can set expectations below deteriorating fundamentals, which has limits.
Revenue growing at 56% year over year ranks this company as the top growth performer within its peer group, suggesting meaningful market share capture that justifies investor attention even amid quality concerns.
→StablePeer-rank breakdown
- Expectation
- Revenue growth stays above 30% year over year for at least 2 of the next 4 quarters, confirming the growth trajectory is durable.
CounterHigh leverage of 33x debt-to-equity and compressed operating margins mean growth is being financed at potentially high cost; if capital becomes more expensive or revenue growth slows, the leverage burden could become destabilizing.
With only 4.3% headroom to the near-term analyst price target and a risk/reward ratio of 0.61-to-1 — where potential downside exceeds potential upside — the entry geometry is unattractive regardless of the underlying growth narrative.
→StablePrice targets
- Expectation
- Analyst consensus price target is revised upward by more than 20%, creating meaningful headroom above the current price of $38.38.
CounterIf the perfect beat streak continues and revenue growth sustains above 30%, analysts may materially raise their targets, quickly expanding the 4.3% headroom into a compelling setup.
TrendMatrix Research · core thesis
Engine thesis — one sentence
A healthcare services company with 56% revenue growth leadership in its peer group and a perfect four-quarter earnings beat streak, but operating margin has compressed by 11.5%, leverage stands at 33x debt-to-equity, quality falls below the minimum threshold, and only 4.3% upside remains to the analyst target — making this an unattractive setup despite the growth story.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.9 |
| ROA | 2.4 |
| Gross margin | 0.0 |
| Op margin | 1.2 |
| Net margin | 0.4 |
| Current ratio | 5.0 |
| FCF quality | 10.0 |
| Moat | 4.9 |
| Piotroski F | 6.7 |
- ▸Excellent cash conversion: 952% FCF/NI
- ▸No competitive moat
Growth
10.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 10.0 |
- ▸Strong growth: 56% YoY
Momentum
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.8 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 5.3 |
- ▸Overbought (RSI 83)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 8.0 |
| Price target | 4.4 |
| erm sentiment | 5.6 |
- ▸Light analyst coverage (9.0) — 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
4.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.8 |
| quality rank | 2.8 |
| growth rank | 9.1 |
- ▸Industry growth leader
Technical
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 1.6 |
| 52w position | 9.1 |
Risk (lower is worse)
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.5 |
| days to cover | 5.5 |
| volatility | 3.1 |
| put call | 10.0 |
| implied vol | 2.6 |
| beta | 7.6 |
| debt equity | 3.3 |
- ▸High IV: 65%
Catalyst
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (6)
- MOMENTUM:7.6>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:34d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.1=NEGATIVE
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-1.11
Upside
-16.6%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $2.4B<$5B
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Growth at 10.0 could not lift the engine output above the verdict floor. Failed gate signal: ASYMMETRY:-1.1=NEGATIVE.
The strongest dimensions are Growth at 10.0, Momentum at 7.6, and Catalyst at 7.5; the weakest are Technical at 3.6, Quality at 3.6, and Peer rank at 4.0. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -1.11 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Quality Breach Margin Compression Leverage
Trip ifOperating margin rises above 0% for 2 consecutive quarters and quality score rises above 4.0.
- P2Perfect Earnings Beat Discipline
Trip ifEPS surprise falls below 0% for 2 consecutive quarters, breaking the perfect beat streak.
- P3Industry Leading Revenue Growth
Trip ifRevenue growth falls below 30% year over year for 2 consecutive quarters.
- P4Thin Upside Unfavorable Risk Reward
Trip ifAnalyst consensus price target rises above $46 (more than 20% above current $38.38), creating meaningful upside headroom.