Value
10.0/10data confidence 20%| Component | Sub-score |
|---|---|
| P/S | 10.0 |
- ▸Attractively valued
ASTL · Why this verdict
Why Algoma Steel Group (ASTL) 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 score4.9/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Algoma Steel is out of favor and priced cheaply on sales with strong price momentum, but quality is below the floor (1.9), losses persist and quarterly revenue has fallen by more than half in a year.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Momentum scores 7.4/10 with rising on-balance volume and price above the 200-day moving average, though RSI of 75 is overbought. Momentum breakdown | Price stays above the 200-day moving average and on-balance volume keeps rising. | ↓Deteriorating |
| CounterAn RSI of 75 is overbought and the stock sits within a gap of the 52-week high area, so a sharp pullback is likely given the weak fundamentals. | ||
The Basic Materials sector is out of favor with a value score of 10.0, but price upside is exhausted, with no analyst target set and only a default 15% take-profit. Edge rationale | Sector rotation into materials lifts the stock past the default $6.19 take-profit level. | →Stable |
| CounterWith no analyst target and 112% implied volatility, the upside rests on a default assumption rather than evidence, and downside to the $5.00 stop is 7.1%. | ||
Quality scores 1.9/10 with a Piotroski F-Score of 2/9, zero return on equity, zero margins and no competitive moat. Quality breakdown | Operating and net margins improve toward zero and the Piotroski F-Score rises above 4. | →Stable |
| CounterSteel producers are at a trough in the cycle, so depressed quality scores may reverse as demand and pricing recover. | ||
Quarterly revenue fell to $249.4M from $523.9M a year earlier and EPS stayed negative at -$0.43 in the latest quarter. Earnings | Revenue stabilizes toward the $340.9M next-quarter estimate and quarterly EPS loss narrows below $0.30. | ↓Deteriorating |
| CounterThe revenue estimate for next quarter ($340.9M) is 37% above the latest quarter, so recovery may already be underway, and the last two quarters beat on a narrowing loss. | ||
Algoma beat estimates in the last 2 quarters (+41.4% and +55.0%) after two big misses (-30.5% and -133.8%), so results are improving but volatile. Last 4 quarters | Another beat in the February 2027 report extends the streak to 3 quarters. | ↓Deteriorating |
| CounterThe beats came on loss estimates, meaning the company still lost money; beating a loss forecast does not make the business profitable. | ||
Momentum scores 7.4/10 with rising on-balance volume and price above the 200-day moving average, though RSI of 75 is overbought.
↓DeterioratingMomentum breakdown
- Expectation
- Price stays above the 200-day moving average and on-balance volume keeps rising.
CounterAn RSI of 75 is overbought and the stock sits within a gap of the 52-week high area, so a sharp pullback is likely given the weak fundamentals.
The Basic Materials sector is out of favor with a value score of 10.0, but price upside is exhausted, with no analyst target set and only a default 15% take-profit.
→StableEdge rationale
- Expectation
- Sector rotation into materials lifts the stock past the default $6.19 take-profit level.
CounterWith no analyst target and 112% implied volatility, the upside rests on a default assumption rather than evidence, and downside to the $5.00 stop is 7.1%.
Quality scores 1.9/10 with a Piotroski F-Score of 2/9, zero return on equity, zero margins and no competitive moat.
→StableQuality breakdown
- Expectation
- Operating and net margins improve toward zero and the Piotroski F-Score rises above 4.
CounterSteel producers are at a trough in the cycle, so depressed quality scores may reverse as demand and pricing recover.
Quarterly revenue fell to $249.4M from $523.9M a year earlier and EPS stayed negative at -$0.43 in the latest quarter.
↓DeterioratingEarnings
- Expectation
- Revenue stabilizes toward the $340.9M next-quarter estimate and quarterly EPS loss narrows below $0.30.
CounterThe revenue estimate for next quarter ($340.9M) is 37% above the latest quarter, so recovery may already be underway, and the last two quarters beat on a narrowing loss.
Algoma beat estimates in the last 2 quarters (+41.4% and +55.0%) after two big misses (-30.5% and -133.8%), so results are improving but volatile.
↓DeterioratingLast 4 quarters
- Expectation
- Another beat in the February 2027 report extends the streak to 3 quarters.
CounterThe beats came on loss estimates, meaning the company still lost money; beating a loss forecast does not make the business profitable.
Per-dimension breakdown
Quality
1.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.0 |
| Op margin | 0.0 |
| Net margin | 0.0 |
| Current ratio | 8.6 |
| Moat | 2.5 |
| Piotroski F | 2.2 |
- ▸No competitive moat
- ▸Weak Piotroski F-Score: 2/9
- ▸Quality concerns
Growth
5.0/10data confidence 50%Momentum
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.3 |
| MACD | 8.4 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Overbought (RSI 73)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
5.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| erm sentiment | 5.0 |
Insider
5.0/10data confidence 50%Peer rank
1.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.0 |
| quality rank | 0.0 |
| growth rank | 0.0 |
Technical
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.7 |
| support resistance | 0.7 |
| 52w position | 9.4 |
| gap | 6.0 |
Risk (lower is worse)
3.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.2 |
| days to cover | 4.0 |
| volatility | 0.0 |
| put call | 10.0 |
| implied vol | 0.0 |
| beta | 4.6 |
| debt equity | 0.0 |
- ▸High IV: 94%
Catalyst
3.3/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
- ▸Earnings concerns: 2B/2M
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (7)
- MOMENTUM:6.3>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:92d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (1)
- ASYMMETRY:UPSIDE_EXHAUSTED (upside=0.0%)
Reward-to-Risk
0.00
Upside
+15.0%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeSector Rotation — Basic Materials sector out of favor, value=10.0
SuitabilityAggressive — Beta 1.63>1.3, MCap $0.6B<$5B
Investment implication
The SELL_IF_HOLDING verdict reflects clean gate clearance against Value at 10.0 and asymmetric R:R of 0.00.
The strongest dimensions are Value at 10.0, Momentum at 6.3, and Growth at 5.0; the weakest are Peer rank at 1.2, Quality at 1.9, and Catalyst at 3.3. The V9 engine cleared all gates with 1 warning, producing an asymmetric reward-to-risk of 0.00 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Strong Momentum Accumulation
Trip ifMomentum score falls below 4.5 from the current 7.4.
- P2Weak Quality No Moat
Trip ifPiotroski F-Score stays below 3 from the current 2/9 for 2 consecutive quarters.
- P3Shrinking Revenue Persistent Losses
Trip ifQuarterly revenue falls below $200M from the latest $249.4M.
- P4Mixed Earnings Surprises
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P5Sector Rotation Value Edge
Trip ifPrice falls below the $5.00 stop, a drop of more than 7% from $5.38.