Value
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.7 |
| P/S | 9.8 |
| EV/EBITDA | 1.5 |
| Fwd P/E | 6.3 |
| PEG | 10.0 |
| Analyst target | 6.0 |
- ▸Forward P/E: 20.6x
- ▸PEG: 0.09
BHE · Why this verdict
Why Benchmark Electronics (BHE) 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 score5.5/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Benchmark Electronics is an electronics manufacturing services company with a perfect four-quarter beat streak and excellent cash conversion, but weak momentum, customer concentration and a thin 6.9% gap to the analyst target limit the case.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company beat estimates in all 4 recent quarters (average surprise 7.9%), with EPS up to 0.84 and quarterly revenue of $834M versus $703M a year earlier. Earnings | Beats continue in at least 3 of the next 4 quarters with quarterly revenue staying above $780M. | ↑Improving |
| CounterBeats of about 8% on low-single-digit margins can be erased by one weak quarter, and EMS demand is cyclical. | ||
Customer and geographic concentration are the main structural risks: the ten largest customers account for 51% of revenue and international operations for 64%. Bear case | Top-ten customer share falls below 50% without losing revenue. | ↑Improving |
| CounterLong-running multi-year EMS contracts and sticky qualification processes lower the practical risk of customer loss. | ||
Cash conversion is excellent at 180% FCF/NI with a Piotroski F-Score of 8/9, although overall quality is only 4.2 because margins are thin. Quality breakdown | FCF/NI stays above 100% and operating margin improves from the current thin level. | →Stable |
| CounterEMS margins are structurally low and large working-capital swings can reverse FCF quickly. | ||
Momentum is weak at 2.7/10 with falling OBV and a 5.2% gap down, though price is below a long-term average that is still rising at +7.1%/30d, suggesting a pullback in an uptrend. Momentum breakdown | Price reclaims the 200-day average and momentum rises above 4.5. | ↓Deteriorating |
| CounterDistribution volume and an extreme gap down after good earnings may indicate sellers using strength to exit. | ||
At $68.37 the stock is only 6.9% below the $73.10 analyst target while downside to the stop is 9.8%, a reward-to-risk of 0.7, with a put/call ratio of 1.38. Targets | Analyst targets are raised above $80 or price pulls back toward better entry levels. | →Stable |
| CounterAnalyst coverage is light, so targets can move quickly higher after strong earnings. | ||
The company beat estimates in all 4 recent quarters (average surprise 7.9%), with EPS up to 0.84 and quarterly revenue of $834M versus $703M a year earlier.
↑ImprovingEarnings
- Expectation
- Beats continue in at least 3 of the next 4 quarters with quarterly revenue staying above $780M.
CounterBeats of about 8% on low-single-digit margins can be erased by one weak quarter, and EMS demand is cyclical.
Customer and geographic concentration are the main structural risks: the ten largest customers account for 51% of revenue and international operations for 64%.
↑ImprovingBear case
- Expectation
- Top-ten customer share falls below 50% without losing revenue.
CounterLong-running multi-year EMS contracts and sticky qualification processes lower the practical risk of customer loss.
Cash conversion is excellent at 180% FCF/NI with a Piotroski F-Score of 8/9, although overall quality is only 4.2 because margins are thin.
→StableQuality breakdown
- Expectation
- FCF/NI stays above 100% and operating margin improves from the current thin level.
CounterEMS margins are structurally low and large working-capital swings can reverse FCF quickly.
Momentum is weak at 2.7/10 with falling OBV and a 5.2% gap down, though price is below a long-term average that is still rising at +7.1%/30d, suggesting a pullback in an uptrend.
↓DeterioratingMomentum breakdown
- Expectation
- Price reclaims the 200-day average and momentum rises above 4.5.
CounterDistribution volume and an extreme gap down after good earnings may indicate sellers using strength to exit.
At $68.37 the stock is only 6.9% below the $73.10 analyst target while downside to the stop is 9.8%, a reward-to-risk of 0.7, with a put/call ratio of 1.38.
→StableTargets
- Expectation
- Analyst targets are raised above $80 or price pulls back toward better entry levels.
CounterAnalyst coverage is light, so targets can move quickly higher after strong earnings.
Per-dimension breakdown
Quality
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.7 |
| ROA | 1.9 |
| Gross margin | 0.0 |
| Op margin | 1.6 |
| Net margin | 0.9 |
| Current ratio | 6.6 |
| FCF quality | 10.0 |
| Moat | 6.4 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 180% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
6.7/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 7.3 |
| EPS growth | 6.1 |
Momentum
2.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 0.0 |
| OBV | 6.9 |
| MA position | 2.2 |
| Volume | 0.5 |
- ▸Below 200-MA but MA still rising (+6.7%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.8 |
| Price target | 8.7 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (3.0) — signal dampened
- ▸Analyst upside: 32%
Insider
5.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.9 |
| notable moves | 5.0 |
- ▸Insider selling (low materiality) — $492,628 (0.019% of mkt cap)
Peer rank
4.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.8 |
| quality rank | 2.4 |
| growth rank | 4.1 |
Technical
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.6 |
| support resistance | 9.5 |
| 52w position | 3.0 |
Risk (lower is worse)
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.8 |
| days to cover | 7.4 |
| volatility | 0.0 |
| put call | 4.0 |
| implied vol | 4.5 |
| max pain risk | 7.0 |
| beta | 5.4 |
| debt equity | 9.0 |
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 6.5 |
| dividend safety | 6.2 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:90d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:2.6<4.5
- ASYMMETRY:1.2<1.5@spot
Warning (0)
none
Reward-to-Risk
1.16
Upside
+12.4%
Downside
10.8%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.41>1.3, MCap $2.5B<$5B
Investment implication
The F-path SELL output reflects an overall score of 4.2 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Technical at 7.0) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:2.6<4.5, ASYMMETRY:1.2<1.5@spot) reinforce the read. Current asymmetry R:R is 1.16 — supplementary context, not the trigger for this path.
The strongest dimensions are Technical at 7.0, Sentiment at 6.9, and Growth at 6.7; the weakest are Momentum at 2.6, Quality at 4.2, and Peer rank at 4.3. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of 1.16 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Beat Streak Growth
Trip ifEPS misses estimates in more than 1 of the next 4 quarters.
- P2Excellent Cash Conversion
Trip ifFCF-to-net-income falls below 80% from the current 180%.
- P3Customer And Geography Concentration
Trip ifTop-ten customer share exceeds 60% of revenue from the current 51%.
- P4Weak Momentum Pullback
Trip ifMomentum score stays below 2.0 and price falls more than 10% from $68.37.
- P5Thin Upside Margin
Trip ifReward-to-risk stays below 1.0 as upside to target falls under 3%.