Value
6.8/10data confidence 83%| Component | Sub-score |
|---|---|
| P/S | 9.5 |
| EV/EBITDA | 2.8 |
| Fwd P/E | 7.7 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 16.0x
- ▸PEG: 0.06
BLCO · Why this verdict
Why Bausch + Lomb (BLCO) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.5/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company generates a 5% free cash flow margin and a 4.5% FCF yield despite reporting a GAAP net loss, indicating that accounting adjustments obscure genuine cash generation and that the true earnings power is better than headline income figures suggest. Quality breakdown | Free cash flow margin improves to above 8% over the next four reported quarters. | →Stable |
| CounterAn FCF margin of 5% is thin; any increase in capital requirements or working capital tied to the Vision Care segment could quickly turn free cash flow negative, removing this quality differentiator. | ||
A forward P/E of 13.9x and a PEG of 0.05 imply the market is assigning almost no value to the company's growth expectations, creating a meaningful potential re-rating opportunity if the growth profile is delivered. Valuation breakdown | The forward earnings multiple expands above 18x over 12 months as earnings estimates revise higher following consistent delivery. | →Stable |
| CounterBelow-average business quality dampens the re-rating case; a depressed multiple can persist indefinitely if the underlying business lacks the durability to sustain its growth assumptions. | ||
On-balance volume is declining (distribution), meaning sellers are dominating on net volume, which signals institutional positioning is moving against the stock even as the 200-day moving average itself remains in a rising trend. Momentum breakdown | On-balance volume reverses to a rising (accumulation) trend and the stock reclaims its 200-day moving average within 90 days. | →Stable |
| CounterThe 200-day moving average is still rising at +1.5% over 30 days, indicating the stock is pulling back within a longer-term uptrend rather than breaking down structurally — the near-term distribution may prove transient. | ||
Vision Care accounts for 57% of revenue, meaning the company's financial performance is tightly coupled to a single segment and leaves earnings vulnerable to any category-specific headwind with limited diversification buffer. Bear case | Non-Vision Care segments grow such that Vision Care's revenue share falls below 50% over the next four reported quarters. | →Stable |
| CounterDeep focus on a single large category can be a strategic advantage if the category grows; the concentration risk is symmetric and a strong Vision Care cycle would disproportionately benefit the company. | ||
The company generates a 5% free cash flow margin and a 4.5% FCF yield despite reporting a GAAP net loss, indicating that accounting adjustments obscure genuine cash generation and that the true earnings power is better than headline income figures suggest.
→StableQuality breakdown
- Expectation
- Free cash flow margin improves to above 8% over the next four reported quarters.
CounterAn FCF margin of 5% is thin; any increase in capital requirements or working capital tied to the Vision Care segment could quickly turn free cash flow negative, removing this quality differentiator.
A forward P/E of 13.9x and a PEG of 0.05 imply the market is assigning almost no value to the company's growth expectations, creating a meaningful potential re-rating opportunity if the growth profile is delivered.
→StableValuation breakdown
- Expectation
- The forward earnings multiple expands above 18x over 12 months as earnings estimates revise higher following consistent delivery.
CounterBelow-average business quality dampens the re-rating case; a depressed multiple can persist indefinitely if the underlying business lacks the durability to sustain its growth assumptions.
On-balance volume is declining (distribution), meaning sellers are dominating on net volume, which signals institutional positioning is moving against the stock even as the 200-day moving average itself remains in a rising trend.
→StableMomentum breakdown
- Expectation
- On-balance volume reverses to a rising (accumulation) trend and the stock reclaims its 200-day moving average within 90 days.
CounterThe 200-day moving average is still rising at +1.5% over 30 days, indicating the stock is pulling back within a longer-term uptrend rather than breaking down structurally — the near-term distribution may prove transient.
Vision Care accounts for 57% of revenue, meaning the company's financial performance is tightly coupled to a single segment and leaves earnings vulnerable to any category-specific headwind with limited diversification buffer.
→StableBear case
- Expectation
- Non-Vision Care segments grow such that Vision Care's revenue share falls below 50% over the next four reported quarters.
CounterDeep focus on a single large category can be a strategic advantage if the category grows; the concentration risk is symmetric and a strong Vision Care cycle would disproportionately benefit the company.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Bausch + Lomb screens attractively valued at a forward P/E of 13.9x with a PEG of 0.05, and generates positive free cash flow despite reporting a GAAP loss — a signal that economic earnings are stronger than reported income. The primary near-term risks are declining volume momentum and a 57% revenue concentration in the Vision Care segment.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.9 |
| Gross margin | 8.1 |
| Op margin | 1.9 |
| Net margin | 0.0 |
| Current ratio | 5.6 |
| FCF quality | 4.4 |
| Moat | 5.9 |
| Piotroski F | 10.0 |
- ▸FCF-positive despite GAAP loss (FCF margin 5%, FCF yield 3.9%)
- ▸Strong Piotroski F-Score: 9/9
Growth
7.4/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.8 |
| EPS growth | 10.0 |
Momentum
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.6 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 2.7 |
- ▸Overbought (RSI 87)
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.5 |
| Analyst rating | 7.1 |
| Price target | 5.7 |
- ▸LLM news sentiment: +0.50 (n=1)
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
4.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 8.7 |
| quality rank | 2.9 |
| growth rank | 4.3 |
Technical
3.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.3 |
| support resistance | 0.5 |
| 52w position | 8.1 |
Risk (lower is worse)
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.1 |
| days to cover | 0.3 |
| volatility | 5.9 |
| put call | 0.0 |
| implied vol | 0.0 |
| beta | 9.7 |
| debt equity | 6.3 |
- ▸Elevated put/call: 3.84
- ▸High IV: 92%
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 6.7 |
| news activity | 5.0 |
How the verdict was assembled
Engine trigger
Downgraded from BUY WAIT — price $17.11 has reached target $16.91. No upside to wait for.
Engine technical detail
verdict_path:
L4:PATH_F_HOLD_DEFAULT|L3:NEWS_MOD=+1|SANITY:WAIT+price>=TPPassed (7)
- MOMENTUM:5.3>=4.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_BOOST:ANALYST:0.50
- EARNINGS_PROXIMITY:23d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.6=NEGATIVE
Warning (1)
- MOMENTUM:5.3<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
-0.63
Upside
-9.1%
Downside
14.4%
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 default F-path HOLD fired without any positive-conviction gate triggering — no momentum acceleration, no quality+value crossover, no setup recognition. Highest-clear gate: MOMENTUM:5.3>=4.5. Top dim: Growth at 7.4; weakest: Technical at 3.0. The engine's read is one of pattern absence — no directional conviction in either direction at current asymmetry.
The strongest dimensions are Growth at 7.4, Value at 6.8, and Sentiment at 6.8; the weakest are Technical at 3.0, Risk (lower is worse) at 3.9, and Peer rank at 4.0. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.63 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Near Zero Peg Deep Value
Trip ifForward P/E expands above 20x without a corresponding beat of consensus EPS estimates, removing the valuation discount.
- P2Fcf Positive Despite Gaap Loss
Trip ifFree cash flow margin falls below 2% for 2 consecutive reported quarters.
- P3Declining Volume Momentum Overhang
Trip ifOn-balance volume reverses to a rising trend and price closes above the 200-day moving average for 20 or more consecutive trading days.
- P4Vision Care Revenue Concentration
Trip ifVision Care segment revenue share falls below 50% of total revenue for 2 consecutive reported quarters.