Value
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.1 |
| P/S | 10.0 |
| EV/EBITDA | 5.2 |
| Fwd P/E | 9.7 |
| PEG | 9.1 |
| Analyst target | 5.0 |
- ▸Forward P/E: 7.1x
- ▸PEG: 0.65
- ▸Attractively valued
AVT · Why this verdict
Why Avnet (AVT) 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
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. People who build TrendMatrix, or entities they control, may hold positions, long or short, in securities it covers, and may trade them at any time. Positions are not disclosed individually. Verdicts are generated by an automated model applied by the same rules to every covered stock, and are not adjusted for any position held by the people who build TrendMatrix. We do not accept payment from issuers for coverage.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score5.9/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Avnet is an industry growth leader with 48% YoY revenue growth, a 4-quarter beat streak and a forward P/E of 7.1x. Low business quality (2.8/10), negative free-cash-flow conversion and a price only 2.4% below the analyst target make the reward-to-risk of 0.27 thin.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Strong growth of 48% YoY makes Avnet an industry growth leader among peers, and growth is the top-scoring dimension at 10/10. Growth breakdown | Revenue growth should stay above 25% YoY over the next 12 months. | →Stable |
| CounterDistribution growth is cyclical and lumpy; growth confidence is low (0.33) and a 48% rate is unlikely to persist. | ||
Avnet has beaten EPS estimates in all 4 recent quarters, with an average surprise of 13.85% and the latest at 28.8%. Earnings track record | EPS should continue to beat estimates in the report due in 3 days and the following quarters. | ↑Improving |
| CounterBeats may reflect low expectations after a weak base, and a stock already near its analyst target can fall even on a beat. | ||
Business quality is low at 2.8/10, with an earnings-quality red flag of -39% FCF/NI, meaning reported profit is not converting to cash. Quality breakdown | Free cash flow should turn positive and approach net income as inventory build eases. | →Stable |
| CounterNegative cash conversion in a distributor is often working-capital investment to fund growth and can reverse quickly. | ||
The price of $88.20 is just 2.4% below the $90.31 analyst target against 8.9% downside to the stop, a reward-to-risk of 0.27. Estimated upside | Upside should reopen through target raises or a pullback toward support near $82.52. | →Stable |
| CounterAnalyst coverage is light (4 analysts) and targets often trail results; strong growth could trigger sizeable raises. | ||
Dividend safety is a concern (yield trap warning) and insiders sold $8.0M recently (0.111% of market cap), alongside 11% short interest. Catalyst breakdown | Dividend should stay covered by free cash flow and insider selling should not accelerate. | ↑Improving |
| CounterInsider selling of 0.111% of market cap is small and often pre-planned, and a long dividend record may keep the payout intact. | ||
Strong growth of 48% YoY makes Avnet an industry growth leader among peers, and growth is the top-scoring dimension at 10/10.
→StableGrowth breakdown
- Expectation
- Revenue growth should stay above 25% YoY over the next 12 months.
CounterDistribution growth is cyclical and lumpy; growth confidence is low (0.33) and a 48% rate is unlikely to persist.
Avnet has beaten EPS estimates in all 4 recent quarters, with an average surprise of 13.85% and the latest at 28.8%.
↑ImprovingEarnings track record
- Expectation
- EPS should continue to beat estimates in the report due in 3 days and the following quarters.
CounterBeats may reflect low expectations after a weak base, and a stock already near its analyst target can fall even on a beat.
Business quality is low at 2.8/10, with an earnings-quality red flag of -39% FCF/NI, meaning reported profit is not converting to cash.
→StableQuality breakdown
- Expectation
- Free cash flow should turn positive and approach net income as inventory build eases.
CounterNegative cash conversion in a distributor is often working-capital investment to fund growth and can reverse quickly.
The price of $88.20 is just 2.4% below the $90.31 analyst target against 8.9% downside to the stop, a reward-to-risk of 0.27.
→StableEstimated upside
- Expectation
- Upside should reopen through target raises or a pullback toward support near $82.52.
CounterAnalyst coverage is light (4 analysts) and targets often trail results; strong growth could trigger sizeable raises.
Dividend safety is a concern (yield trap warning) and insiders sold $8.0M recently (0.111% of market cap), alongside 11% short interest.
↑ImprovingCatalyst breakdown
- Expectation
- Dividend should stay covered by free cash flow and insider selling should not accelerate.
CounterInsider selling of 0.111% of market cap is small and often pre-planned, and a long dividend record may keep the payout intact.
Per-dimension breakdown
Quality
2.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.2 |
| ROA | 2.6 |
| Gross margin | 0.0 |
| Op margin | 1.5 |
| Net margin | 0.6 |
| Current ratio | 6.3 |
| FCF quality | 0.0 |
| Moat | 5.6 |
| Piotroski F | 6.7 |
- ▸Earnings quality RED FLAG: -39% FCF/NI
- ▸Quality concerns
Growth
10.0/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
- ▸Strong growth: 48% YoY
Momentum
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 7.7 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 4.0 |
| Volume | 10.0 |
| vol acceleration | 8.1 |
- ▸Uptrend pullback (RSI 38) - buy opportunity
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
- ▸Volume surge (2.1x avg) on up move
Sentiment
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 3.5 |
| Analyst rating | 5.0 |
| Price target | 7.7 |
Insider
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 2.0 |
| holder change | 5.3 |
| notable moves | 7.0 |
- ▸Notable insider selling — $8,030,011 (0.110% of mkt cap)
Peer rank
3.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.7 |
| quality rank | 0.0 |
| growth rank | 8.6 |
- ▸Industry growth leader
Technical
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 7.4 |
| support resistance | 8.3 |
| 52w position | 6.3 |
| gap | 5.0 |
Risk (lower is worse)
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 4.4 |
| days to cover | 3.9 |
| volatility | 1.7 |
| put call | 10.0 |
| implied vol | 1.3 |
| max pain risk | 7.0 |
| beta | 6.5 |
| debt equity | 6.8 |
- ▸High IV: 72%
Catalyst
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 6.5 |
| earnings history | 10.0 |
| surprise avg | 9.4 |
| dividend safety | 4.3 |
| news activity | 5.0 |
- ▸Perfect beat streak: 4Q
- ▸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_BLOCK:QUALITY_FLOORPassed (7)
- MOMENTUM:5.1>=4.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:NO_DATE
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.2<1.5@spot
Warning (1)
- MOMENTUM:5.1<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
0.21
Upside
+1.8%
Downside
8.7%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The SELL_IF_HOLDING verdict reflects the ASYMMETRY gate's 0.2<1.5@spot outcome against Growth at 10.0 and asymmetric R:R of 0.21.
The strongest dimensions are Growth at 10.0, Value at 7.6, and Catalyst at 7.0; the weakest are Quality at 2.8, Peer rank at 3.9, and Insider at 4.3. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 0.21 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Consistent Earnings Beat Streak
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P2Industry Growth Leader
Trip ifRevenue growth falls below 15% YoY from current 48%.
- P3Weak Earnings Quality Cash Burn
Trip ifFree cash flow to net income conversion rises above 50% from current -39%.
- P4Limited Upside To Analyst Target
Trip ifUpside to the analyst target exceeds 15% from current 2.4%.
- P5Yield Trap And Insider Selling
Trip ifInsider selling exceeds 0.5% of market cap over 90 days from current 0.111%.