Value
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 0.7 |
| P/S | 9.5 |
| EV/EBITDA | 3.1 |
| Fwd P/E | 9.7 |
| PEG | 10.0 |
| Analyst target | 6.0 |
- ▸Forward P/E: 7.4x
- ▸PEG: 0.05
BN · Why this verdict
Why Brookfield (BN) 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 score5.3/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The overall quality score has fallen below the minimum 4.0 floor and the business is noted as lacking a competitive moat, creating structural fragility that warrants caution even when the macro or technical environment appears supportive. Bear case | Quality score rises above 5.0 for 2 consecutive reporting periods, demonstrating sustainable improvement in the underlying business metrics. | →Stable |
| CounterA Piotroski F-Score of 7 out of 9 — a strong balance sheet and profitability signal — contradicts the headline quality breach; if the specific components pulling the quality score below the floor are temporary or accounting-driven, the headline reading may overstate the structural risk. | ||
The stock is above its 200-day moving average with rising on-balance volume and near a 52-week high — a positive technical setup that stands in sharp contrast to deeply negative free cash flow, below-minimum quality, and a record of universal earnings misses, creating a divergence that may not persist. Momentum breakdown | EPS surprise exceeds 10% for 2 consecutive quarters, confirming that the technical accumulation was a leading indicator of fundamental improvement rather than a warning sign. | →Stable |
| CounterSustained institutional accumulation at elevated prices often precedes genuine fundamental recovery; the technical signal may be a leading indicator that the business turn is already underway, and the fundamental data may simply be lagging. | ||
Free cash flow is deeply negative relative to net income — flagged as a red flag — indicating that reported earnings are not translating into cash, which calls into question the quality and durability of the stated income figures. Quality breakdown | Free cash flow turns positive and represents at least 30% of net income for 2 consecutive reporting periods within 12 months. | →Stable |
| CounterAn asset management business often reports negative near-term free cash flow during periods of aggressive capital deployment into long-duration investments; if those assets generate returns as intended, cash conversion could normalize without reflecting operational deterioration. | ||
Across all four available reported quarters, earnings came in below consensus every time, with an average shortfall of nearly 100% — including a miss of 139% below estimates in one quarter — indicating a persistent and severe gap between stated expectations and delivered results. Earnings | EPS surprise exceeds 0% for 2 consecutive quarters, breaking the pattern of universal misses. | →Stable |
| CounterAsset management earnings are highly sensitive to mark-to-market movements and carried interest timing; the magnitude of misses may reflect valuation cycles rather than operational failure, and a rebound in asset values could produce a substantial positive surprise. | ||
The overall quality score has fallen below the minimum 4.0 floor and the business is noted as lacking a competitive moat, creating structural fragility that warrants caution even when the macro or technical environment appears supportive.
→StableBear case
- Expectation
- Quality score rises above 5.0 for 2 consecutive reporting periods, demonstrating sustainable improvement in the underlying business metrics.
CounterA Piotroski F-Score of 7 out of 9 — a strong balance sheet and profitability signal — contradicts the headline quality breach; if the specific components pulling the quality score below the floor are temporary or accounting-driven, the headline reading may overstate the structural risk.
The stock is above its 200-day moving average with rising on-balance volume and near a 52-week high — a positive technical setup that stands in sharp contrast to deeply negative free cash flow, below-minimum quality, and a record of universal earnings misses, creating a divergence that may not persist.
→StableMomentum breakdown
- Expectation
- EPS surprise exceeds 10% for 2 consecutive quarters, confirming that the technical accumulation was a leading indicator of fundamental improvement rather than a warning sign.
CounterSustained institutional accumulation at elevated prices often precedes genuine fundamental recovery; the technical signal may be a leading indicator that the business turn is already underway, and the fundamental data may simply be lagging.
Free cash flow is deeply negative relative to net income — flagged as a red flag — indicating that reported earnings are not translating into cash, which calls into question the quality and durability of the stated income figures.
→StableQuality breakdown
- Expectation
- Free cash flow turns positive and represents at least 30% of net income for 2 consecutive reporting periods within 12 months.
CounterAn asset management business often reports negative near-term free cash flow during periods of aggressive capital deployment into long-duration investments; if those assets generate returns as intended, cash conversion could normalize without reflecting operational deterioration.
Across all four available reported quarters, earnings came in below consensus every time, with an average shortfall of nearly 100% — including a miss of 139% below estimates in one quarter — indicating a persistent and severe gap between stated expectations and delivered results.
→StableEarnings
- Expectation
- EPS surprise exceeds 0% for 2 consecutive quarters, breaking the pattern of universal misses.
CounterAsset management earnings are highly sensitive to mark-to-market movements and carried interest timing; the magnitude of misses may reflect valuation cycles rather than operational failure, and a rebound in asset values could produce a substantial positive surprise.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Free cash flow is deeply negative relative to net income, all four available reported quarters missed estimates by nearly 100% on average, and the overall quality score has fallen below minimum thresholds — despite technical momentum that has carried the stock near a 52-week high with rising accumulation volume, the fundamental picture does not support new exposure at current levels.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.8 |
| ROA | 1.8 |
| Gross margin | 2.5 |
| Op margin | 10.0 |
| Net margin | 0.8 |
| Current ratio | 3.6 |
| FCF quality | 0.0 |
| Moat | 4.2 |
| Piotroski F | 7.8 |
- ▸Earnings quality RED FLAG: -166% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
Growth
7.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.5 |
| EPS growth | 10.0 |
Momentum
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 1.0 |
| OBV | 10.0 |
| MA position | 2.2 |
| Volume | 2.7 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA but MA still rising (+0.3%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.8 |
| Analyst rating | 7.0 |
| Price target | 8.2 |
- ▸Light analyst coverage (10.0) — signal dampened
- ▸Analyst upside: 25%
Insider
5.0/10data confidence 50%Peer rank
3.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.9 |
| quality rank | 1.5 |
| growth rank | 7.0 |
Technical
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 6.6 |
| support resistance | 6.7 |
| 52w position | 7.6 |
| gap | 5.0 |
Risk (lower is worse)
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| days to cover | 7.4 |
| volatility | 6.5 |
| put call | 0.0 |
| implied vol | 6.7 |
| beta | 3.9 |
| debt equity | 3.8 |
- ▸Elevated put/call: 6.03
Catalyst
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| dividend safety | 4.8 |
| news activity | 6.0 |
- ▸Earnings concerns: 0B/4M
- ▸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_BLOCKPassed (7)
- ASYMMETRY:1.8>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:34d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- MOMENTUM:3.9<4.5
Warning (0)
none
Reward-to-Risk
1.84
Upside
+9.2%
Downside
5.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.84>1.3
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Growth at 7.2 could not lift the engine output above the verdict floor. Failed gate signal: MOMENTUM:3.9<4.5.
The strongest dimensions are Growth at 7.2, Sentiment at 7.0, and Value at 6.9; the weakest are Peer rank at 3.3, Catalyst at 3.5, and Quality at 3.5. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of 1.84 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Deeply Negative Free Cash Flow
Trip ifFree cash flow turns positive and represents at least 30% of net income for 2 consecutive reporting periods.
- P2Zero Earnings Beats Deep Misses
Trip ifEPS surprise exceeds 0% for 2 consecutive quarters.
- P3Quality Below Minimum No Moat
Trip ifQuality score rises above 5.0 for 2 consecutive reporting periods.
- P4Technical Strength Fundamental Divergence
Trip ifEPS surprise exceeds 10% for 2 consecutive quarters.