Value
6.5/10data confidence 67%| Component | Sub-score |
|---|---|
| P/E | 6.3 |
| EV/EBITDA | 4.4 |
| Fwd P/E | 8.4 |
| PEG | 6.1 |
- ▸Forward P/E: 13.8x
- ▸PEG: 1.23
BRC · Why this verdict
Why Brady (BRC) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictBUY WAIT
Overall score6.0/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Brady Corporation demonstrates genuine business quality — a Piotroski F-Score of 8 out of 9 and a consistent earnings beat record — but the stock has moved to within 2% of the analyst consensus target with 13.4% downside, producing a reward-to-risk ratio of 0.29 that makes current-price entry unattractive regardless of underlying fundamentals.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
A Piotroski F-Score of 8 out of 9 reflects strong asset productivity, improving margins, positive momentum in financial health, and solid liquidity — multiple signals firing simultaneously that the business is operationally disciplined and financially sound. Quality breakdown | Piotroski F-Score remains at 7 or above and free cash flow conversion improves above 80% of net income over the next 12 months. | →Stable |
| CounterFree cash flow converts at only 70% of reported net income — an earnings quality flag suggesting reported profits may be running ahead of true cash generation, which limits confidence in the quality score's durability. | ||
With a debt-to-equity ratio of 6.6, the capital structure carries meaningful financial leverage — explicitly penalizing the investment thesis — and amplifies downside risk in any scenario where revenue or margins disappoint. Bear case | The debt-to-equity ratio declines below 4.0 through earnings retention or debt repayment over the next 24 months. | ↓Deteriorating |
| CounterThe strong Piotroski F-Score and consistent earnings generation suggest the leverage is comfortably serviced at current earnings levels, substantially reducing near-term financial distress risk. | ||
The stock sits within 2% of its analyst consensus target with 13.4% downside to technical support — a reward-to-risk ratio of 0.29 — offering no meaningful margin of safety for a new position regardless of underlying business quality. Price targets | Analyst consensus price target rises at least 15% driven by earnings upgrades, restoring upside above 15% and a reward-to-risk ratio above 1.5. | Tripped↑Improving |
| CounterIf the next earnings catalyst delivers another double-digit surprise and the elevated put/call ratio begins to unwind, analyst targets may be revised swiftly enough to reopen the upside geometry sooner than the current setup implies. | ||
The company beat consensus estimates in three of the last four quarters — with the most recent quarter delivering an 11.5% positive earnings surprise, the strongest beat in the recent track record — after an inline result in the second-most-recent quarter. Catalyst breakdown | EPS beats continue for at least two more consecutive quarters, sustaining the delivery track record through the next earnings cycle. | ↓Deteriorating |
| CounterWith the stock already at the analyst consensus target, future beats may drive incremental upward revisions in estimates but insufficient price appreciation to create a favorable entry for new capital. | ||
A Piotroski F-Score of 8 out of 9 reflects strong asset productivity, improving margins, positive momentum in financial health, and solid liquidity — multiple signals firing simultaneously that the business is operationally disciplined and financially sound.
→StableQuality breakdown
- Expectation
- Piotroski F-Score remains at 7 or above and free cash flow conversion improves above 80% of net income over the next 12 months.
CounterFree cash flow converts at only 70% of reported net income — an earnings quality flag suggesting reported profits may be running ahead of true cash generation, which limits confidence in the quality score's durability.
With a debt-to-equity ratio of 6.6, the capital structure carries meaningful financial leverage — explicitly penalizing the investment thesis — and amplifies downside risk in any scenario where revenue or margins disappoint.
↓DeterioratingBear case
- Expectation
- The debt-to-equity ratio declines below 4.0 through earnings retention or debt repayment over the next 24 months.
CounterThe strong Piotroski F-Score and consistent earnings generation suggest the leverage is comfortably serviced at current earnings levels, substantially reducing near-term financial distress risk.
The stock sits within 2% of its analyst consensus target with 13.4% downside to technical support — a reward-to-risk ratio of 0.29 — offering no meaningful margin of safety for a new position regardless of underlying business quality.
Tripped↑ImprovingPrice targets
- Expectation
- Analyst consensus price target rises at least 15% driven by earnings upgrades, restoring upside above 15% and a reward-to-risk ratio above 1.5.
CounterIf the next earnings catalyst delivers another double-digit surprise and the elevated put/call ratio begins to unwind, analyst targets may be revised swiftly enough to reopen the upside geometry sooner than the current setup implies.
The company beat consensus estimates in three of the last four quarters — with the most recent quarter delivering an 11.5% positive earnings surprise, the strongest beat in the recent track record — after an inline result in the second-most-recent quarter.
↓DeterioratingCatalyst breakdown
- Expectation
- EPS beats continue for at least two more consecutive quarters, sustaining the delivery track record through the next earnings cycle.
CounterWith the stock already at the analyst consensus target, future beats may drive incremental upward revisions in estimates but insufficient price appreciation to create a favorable entry for new capital.
Per-dimension breakdown
Quality
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.6 |
| ROA | 6.9 |
| Gross margin | 6.3 |
| Op margin | 7.1 |
| Net margin | 6.5 |
| Current ratio | 7.0 |
| FCF quality | 5.3 |
| Moat | 8.4 |
| Piotroski F | 10.0 |
- ▸Earnings quality warning: 70% FCF/NI
- ▸Wide economic moat
- ▸Compounder quality: strong returns + growth
- ▸Strong Piotroski F-Score: 9/9
Growth
5.1/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.9 |
| EPS growth | 4.2 |
Momentum
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 7.6 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 4.0 |
| Volume | 6.7 |
- ▸Uptrend pullback (RSI 39) - buy opportunity
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.4 |
| Price target | 7.8 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (2.0) — signal dampened
- ▸Analyst upside: 21%
Insider
4.2/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 6.0 |
| holder change | 3.7 |
| notable moves | 3.0 |
- ▸Share-count fallback (no $ value): net +13,011.0 shares
Peer rank
6.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.6 |
| quality rank | 4.5 |
| growth rank | 6.0 |
- ▸Conservative debt levels
Technical
7.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.0 |
| support resistance | 7.5 |
| 52w position | 8.3 |
Risk (lower is worse)
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.2 |
| days to cover | 6.5 |
| volatility | 5.9 |
| put call | 8.3 |
| implied vol | 3.7 |
| beta | 9.3 |
| debt equity | 9.7 |
Catalyst
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 6.5 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 5.0 |
| dividend safety | 5.5 |
- ▸Strong earnings: 3B/0M
- ▸Earnings in 0 days
How the verdict was assembled
Engine trigger
Earnings in 0 days. Wait until post-earnings.
Engine technical detail
verdict_path:
L3:NEWS_BLOCK|ENTRY_STICKY:WITHIN_BANDPassed (4)
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:3.9<4.5
- ASYMMETRY:0.5<1.5@spot
- EARNINGS_PROXIMITY:0d<=7d
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
0.52
Upside
+2.7%
Downside
5.3%
Sizing output
STARTER
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
A recent news event triggered an L3 news-block on the verdict path. Trigger: Earnings in 0 days. Wait until post-earnings. The 10-dimension scores remain Technical at 7.9 (strongest), but MOMENTUM:3.9<4.5 also fails — the news block is the proximate trigger, not the sole driver.
The strongest dimensions are Technical at 7.9, Risk (lower is worse) at 7.5, and Quality at 7.0; the weakest are Momentum at 3.9, Insider at 4.2, and Growth at 5.1. The V9 engine flagged 3 failed gates with 1 warning, producing an asymmetric reward-to-risk of 0.52 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Near Perfect Balance Sheet Quality
Trip ifPiotroski F-Score falls below 6 for 2 consecutive annual periods.
- P2Consistent Earnings Delivery Recent Acceleration
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P3Elevated Leverage Amplifies Downside
Trip ifNet debt-to-EBITDA exceeds 4x for 2 consecutive quarters.
- P4Thin Upside Poor Reward RiskTripped
Trip ifAnalyst consensus price target rises more than 15% from current levels, restoring a reward-to-risk ratio above 1.5.