Value
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 0.5 |
| P/S | 9.7 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 3.4 |
| PEG | 10.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 32.8x
- ▸PEG: 0.09
BTSG · Why this verdict
Why BrightSpring Health Services, I (BTSG) 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 score5.6/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Revenue is expanding at 26% year-over-year and the company has beaten earnings estimates in three of the last four quarters with an average positive surprise of roughly 13%, demonstrating that operational execution is consistently running ahead of expectations. Growth breakdown | Revenue growth sustains above 20% year-over-year and the earnings beat streak extends to at least 4 of the next 5 quarters, reinforcing the execution narrative. | →Stable |
| CounterHigh headline growth may mask concentration risks — the risk notes flag two material items from annual-report disclosures — and if those concentrated exposures deteriorate, the growth rate could reverse quickly. | ||
Free cash flow is running at 327% of net income, a ratio indicating the business generates substantially more cash than reported earnings imply — a genuine quality backstop beneath the growth story that reduces the risk of an earnings-quality surprise. Quality breakdown | Free cash flow to net income ratio remains above 150% over the next four quarters, confirming the cash generation is structural rather than a one-period anomaly. | →Stable |
| CounterAn FCF-to-net-income ratio far above 100% can reflect accounting differences such as non-cash charges inflating cash flow; without a competitive moat to protect margins, this conversion rate may not persist through a business cycle. | ||
The current price has moved above the price target, leaving negative headroom to the upside level — the stock has already realized the anticipated move, and the reward-to-risk ratio has turned unfavorable with more downside than upside at this entry. Price targets | This pillar is falsified if the analyst consensus price target is revised upward such that upside from the current price exceeds 15%, re-establishing a positive risk/reward. | →Stable |
| CounterStocks frequently trade through near-term price targets during strong momentum phases; the 26% growth trajectory and strong cash conversion could support a higher fundamental valuation than the current target captures. | ||
A leverage ratio that has triggered a penalty, no identifiable competitive moat, and a below-average quality score together raise the question of whether high growth is being funded in a way that limits long-term compounding power and increases downside risk if growth slows. Bear case | This pillar is falsified if the debt-to-equity ratio declines by more than 20% from current levels over four consecutive quarters while the quality score rises above 5.0. | →Stable |
| CounterEarly-phase growth businesses often carry higher leverage as a deliberate choice to fund expansion; if the 26% growth rate justifies the borrowing cost, current leverage could reflect disciplined capital allocation rather than financial fragility. | ||
Revenue is expanding at 26% year-over-year and the company has beaten earnings estimates in three of the last four quarters with an average positive surprise of roughly 13%, demonstrating that operational execution is consistently running ahead of expectations.
→StableGrowth breakdown
- Expectation
- Revenue growth sustains above 20% year-over-year and the earnings beat streak extends to at least 4 of the next 5 quarters, reinforcing the execution narrative.
CounterHigh headline growth may mask concentration risks — the risk notes flag two material items from annual-report disclosures — and if those concentrated exposures deteriorate, the growth rate could reverse quickly.
Free cash flow is running at 327% of net income, a ratio indicating the business generates substantially more cash than reported earnings imply — a genuine quality backstop beneath the growth story that reduces the risk of an earnings-quality surprise.
→StableQuality breakdown
- Expectation
- Free cash flow to net income ratio remains above 150% over the next four quarters, confirming the cash generation is structural rather than a one-period anomaly.
CounterAn FCF-to-net-income ratio far above 100% can reflect accounting differences such as non-cash charges inflating cash flow; without a competitive moat to protect margins, this conversion rate may not persist through a business cycle.
The current price has moved above the price target, leaving negative headroom to the upside level — the stock has already realized the anticipated move, and the reward-to-risk ratio has turned unfavorable with more downside than upside at this entry.
→StablePrice targets
- Expectation
- This pillar is falsified if the analyst consensus price target is revised upward such that upside from the current price exceeds 15%, re-establishing a positive risk/reward.
CounterStocks frequently trade through near-term price targets during strong momentum phases; the 26% growth trajectory and strong cash conversion could support a higher fundamental valuation than the current target captures.
A leverage ratio that has triggered a penalty, no identifiable competitive moat, and a below-average quality score together raise the question of whether high growth is being funded in a way that limits long-term compounding power and increases downside risk if growth slows.
→StableBear case
- Expectation
- This pillar is falsified if the debt-to-equity ratio declines by more than 20% from current levels over four consecutive quarters while the quality score rises above 5.0.
CounterEarly-phase growth businesses often carry higher leverage as a deliberate choice to fund expansion; if the 26% growth rate justifies the borrowing cost, current leverage could reflect disciplined capital allocation rather than financial fragility.
TrendMatrix Research · core thesis
Engine thesis — one sentence
The company delivers 26% year-over-year revenue growth with exceptional cash conversion and a consistent earnings beat track record, but the stock has already surpassed its price target and trades within 0.2% of its 52-week high — the reward-to-risk ratio has turned unfavorable and the setup favors trimming rather than adding.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.1 |
| ROA | 2.7 |
| Gross margin | 0.0 |
| Op margin | 1.3 |
| Net margin | 1.1 |
| Current ratio | 6.2 |
| FCF quality | 10.0 |
| Moat | 4.9 |
| Piotroski F | 7.8 |
- ▸Excellent cash conversion: 327% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
Growth
8.9/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 8.9 |
- ▸Strong growth: 26% YoY
Momentum
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.0 |
| MACD | 8.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.1 |
- ▸Overbought (RSI 81)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 8.0 |
| Analyst rating | 8.7 |
| Price target | 4.4 |
- ▸LLM news sentiment: +0.60 (n=1)
Insider
3.0/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 2.0 |
| insider conviction | 2.0 |
| holder change | 5.0 |
- ▸Heavy insider selling — $1,734,371,749 (12.802% of mkt cap)
Peer rank
4.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.1 |
| quality rank | 7.1 |
| growth rank | 7.5 |
Technical
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.5 |
| support resistance | 1.3 |
| 52w position | 9.5 |
| gap | 5.0 |
Risk (lower is worse)
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.3 |
| days to cover | 8.0 |
| volatility | 5.1 |
| put call | 6.7 |
| implied vol | 4.6 |
| beta | 4.0 |
| debt equity | 4.3 |
| news risk | 6.0 |
- ▸Concentration risks: 2 MED (10-K Item 1A)
Catalyst
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 9.1 |
| news activity | 5.0 |
- ▸Strong earnings: 3B/1M
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:6.2>=5.5
- 8K:CLEAN
- NEWS_BOOST:ANALYST:0.60
- EARNINGS_PROXIMITY:28d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:-0.9=NEGATIVE
- INSIDER:12.80%=EXTREME
Warning (0)
none
Reward-to-Risk
-0.90
Upside
-13.5%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeCatalyst-Driven — Earnings in 28d with 3/4 beat streak
SuitabilityAggressive — Beta 1.79>1.3
Investment implication
The F-path SELL output reflects an overall score of 5.1 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Growth at 8.9) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.9=NEGATIVE, INSIDER:12.80%=EXTREME) reinforce the read. Current asymmetry R:R is -0.90 — supplementary context, not the trigger for this path.
The strongest dimensions are Growth at 8.9, Sentiment at 7.2, and Momentum at 6.2; the weakest are Insider at 3.0, Quality at 4.1, and Technical at 4.6. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -0.90 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Strong Revenue Growth Momentum
Trip ifRevenue growth falls below 15% YoY for 2 consecutive quarters.
- P2Exceptional Cash Conversion
Trip ifFree cash flow to net income ratio falls below 100% for 2 consecutive quarters.
- P3Stock Priced Above Target
Trip ifAnalyst consensus price target is revised upward such that upside from the current price exceeds 15%.
- P4Leverage And Quality Constraints
Trip ifDebt-to-equity ratio declines by more than 20% from current levels over 4 consecutive quarters.