Value
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.1 |
| P/S | 9.5 |
| EV/EBITDA | 3.0 |
| Fwd P/E | 7.2 |
| PEG | 5.0 |
| Analyst target | 9.0 |
- ▸Forward P/E: 17.5x
- ▸PEG: 1.51
BURL · Why this verdict
Why Burlington Stores (BURL) 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 score5.8/10
ConfidenceHIGH
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
BURL offers 39.1% upside to the analyst target and a 41% ROE, but a confirmed downtrend, a red-flag 15% FCF/NI and leverage (D/E 2.9) point to caution and a possible reduction.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
At $237.09 the price is 39.1% below the $329.79 analyst target against 8.0% downside, a reward-to-risk of 4.9. Upside pct | Price moves toward the $329.79 target over the next 12 months. | →Stable |
| CounterTargets typically lag a falling price, and a confirmed downtrend may drag the price below the 8.0% downside before any re-rating. | ||
Return on equity is excellent at 41%, with a Piotroski F-Score of 7/9 and growth scored 7.6/10. Quality breakdown | ROE stays above 30% and the Piotroski score stays at 7 or higher. | →Stable |
| CounterHigh ROE is inflated by leverage (D/E 2.9) while net margin scores only 2.9/10, so returns rest on thin profitability. | ||
Earnings quality is a red flag at 15% FCF/NI, so reported profits are not converting to cash. Quality breakdown | FCF/NI stays below 50% over the next 12 months. | →Stable |
| CounterHeavy store-opening capex can depress free cash flow temporarily, and that spending can fund later growth. | ||
The stock is in a confirmed downtrend, below the 200-day average with falling OBV and RSI at 26, and the engine flags negative momentum. Momentum breakdown | Price stays below its 200-day average over the next few quarters. | ↑Improving |
| CounterRSI of 26 signals capitulation, and Bollinger and support scores of 8.6 and 8.9 suggest a near-term bounce. | ||
Leverage (D/E 2.9) and the consumer cyclical sector add risk, with penalties of -1.5 each and an adjusted overall score of 1.95. Bear case | Debt-to-equity stays near 2.9 and the adjusted score stays below 3. | ↓Deteriorating |
| CounterThe base overall score is 5.4 and retailers with stable cash flow can service leverage, so the penalties may overstate risk. | ||
At $237.09 the price is 39.1% below the $329.79 analyst target against 8.0% downside, a reward-to-risk of 4.9.
→StableUpside pct
- Expectation
- Price moves toward the $329.79 target over the next 12 months.
CounterTargets typically lag a falling price, and a confirmed downtrend may drag the price below the 8.0% downside before any re-rating.
Return on equity is excellent at 41%, with a Piotroski F-Score of 7/9 and growth scored 7.6/10.
→StableQuality breakdown
- Expectation
- ROE stays above 30% and the Piotroski score stays at 7 or higher.
CounterHigh ROE is inflated by leverage (D/E 2.9) while net margin scores only 2.9/10, so returns rest on thin profitability.
Earnings quality is a red flag at 15% FCF/NI, so reported profits are not converting to cash.
→StableQuality breakdown
- Expectation
- FCF/NI stays below 50% over the next 12 months.
CounterHeavy store-opening capex can depress free cash flow temporarily, and that spending can fund later growth.
The stock is in a confirmed downtrend, below the 200-day average with falling OBV and RSI at 26, and the engine flags negative momentum.
↑ImprovingMomentum breakdown
- Expectation
- Price stays below its 200-day average over the next few quarters.
CounterRSI of 26 signals capitulation, and Bollinger and support scores of 8.6 and 8.9 suggest a near-term bounce.
Leverage (D/E 2.9) and the consumer cyclical sector add risk, with penalties of -1.5 each and an adjusted overall score of 1.95.
↓DeterioratingBear case
- Expectation
- Debt-to-equity stays near 2.9 and the adjusted score stays below 3.
CounterThe base overall score is 5.4 and retailers with stable cash flow can service leverage, so the penalties may overstate risk.
Per-dimension breakdown
Quality
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 4.1 |
| Gross margin | 4.8 |
| Op margin | 2.7 |
| Net margin | 2.9 |
| Current ratio | 4.5 |
| FCF quality | 1.2 |
| Moat | 6.8 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 41%
- ▸Earnings quality RED FLAG: 15% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
7.6/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.2 |
| EPS growth | 10.0 |
Momentum
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 0.0 |
| OBV | 10.0 |
| MA position | 1.0 |
| Volume | 3.6 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -1.3%/30d — confirmed downtrend
Sentiment
7.7/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.3 |
| Price target | 9.6 |
| erm sentiment | 5.8 |
- ▸Analyst upside: 53%
Insider
4.2/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 4.6 |
| notable moves | 3.0 |
- ▸Insider selling (low materiality) — $891,463 (0.006% of mkt cap)
Peer rank
3.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.7 |
| quality rank | 4.5 |
| growth rank | 7.3 |
Technical
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 7.5 |
| support resistance | 8.3 |
| 52w position | 2.7 |
Risk (lower is worse)
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.1 |
| days to cover | 8.7 |
| volatility | 3.2 |
| put call | 10.0 |
| implied vol | 3.6 |
| max pain risk | 3.0 |
| beta | 5.0 |
| debt equity | 2.1 |
- ▸Above max pain $165
Catalyst
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 9.0 |
- ▸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 (7)
- ASYMMETRY:5.0>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:24d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:3.6<4.5
- DEATH_CROSS:HARD_BLOCK
Warning (0)
none
Reward-to-Risk
5.02
Upside
+37.5%
Downside
7.5%
Sizing output
AVOID
SetupFalling Knife — Death cross, below all MAs, RSI 32, MACD bearish
EdgeCatalyst-Driven — Earnings in 24d with 4/4 beat streak
SuitabilityAggressive — Beta 1.51>1.3
Investment implication
The F-path SELL output reflects an overall score of 2.3 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Sentiment at 7.7) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:3.6<4.5, DEATH_CROSS:HARD_BLOCK) reinforce the read. Current asymmetry R:R is 5.02 — supplementary context, not the trigger for this path.
The strongest dimensions are Sentiment at 7.7, Growth at 7.6, and Catalyst at 7.2; the weakest are Momentum at 3.6, Peer rank at 3.9, and Insider at 4.2. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of 5.02 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Analyst Upside To Target
Trip ifAnalyst target falls below $260, more than 20% under the current $329.79.
- P2Excellent Return On Equity
Trip ifReturn on equity falls below 25% from current 41%.
- P3Weak Cash Conversion
Trip ifFCF to net income conversion rises above 70% from current 15%.
- P4Confirmed Downtrend
Trip ifPrice rises above its 200-day average with the 30-day slope above 0%.
- P5Leverage And Cyclical Penalties
Trip ifDebt-to-equity falls below 1.5 from current 2.9.