Value
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.0 |
| P/S | 9.2 |
| EV/EBITDA | 0.5 |
| Fwd P/E | 5.7 |
| PEG | 4.8 |
| Analyst target | 6.0 |
- ▸Forward P/E: 22.7x
- ▸PEG: 1.71
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.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score5.0/10
ConfidenceHIGH
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company has beaten earnings estimates in all four of the most recent quarters, with the average positive surprise at 10%, ranging from 2.7% to 23% — a pattern that suggests the business is consistently delivering ahead of expectations. Catalyst breakdown | The beat streak extends to 6 consecutive quarters with average surprise remaining above 5%, confirming the delivery cadence is structural. | →Stable |
| CounterThe most recent beat of 11.4% followed a quarter in which estimates may have been already revised lower; if the consumer environment softens, the beat cushion narrows and the streak could break on a modest miss. | ||
With a debt-to-equity ratio of 3.2 and free cash flow at only 34% of net income, the balance sheet carries meaningful leverage while cash conversion quality is flagged as a concern, leaving less cushion if earnings soften. Quality breakdown | If leverage risk resolves, free cash flow as a percentage of net income rises above 60% and debt-to-equity falls below 2.5 over the next 2 annual periods. | →Stable |
| CounterRetail businesses routinely operate with elevated debt-to-equity when financing store expansion; the leverage may be productive if store-level returns are high, which the 39% return on equity suggests they are — though that return is distorted by the buyback-shrunk equity base. | ||
The share price is above the near-term resistance level, with only 0.8% headroom to the take-profit target and a reward-to-risk ratio of 0.11-to-1, making the current entry point geometrically unattractive regardless of the business quality. Price targets | If the setup improves, the share price pulls back at least 7% from current levels, restoring upside-to-downside asymmetry above 1.5-to-1. | →Stable |
| CounterStocks in a confirmed breakout configuration — golden cross, above all moving averages, bullish MACD — can run through technical resistance targets as the trend attracts momentum buyers; selling at the target may be premature. | ||
With a put/call ratio of 1.39 and the stock trading above the options max pain level of $120, the options market is positioned defensively, suggesting a portion of the market expects near-term mean-reversion. Risk breakdown | If hedging pressure abates, the put/call ratio falls below 0.8 and the share price holds above $250 for 8 consecutive weeks. | →Stable |
| CounterElevated put/call ratios on high-momentum names are often driven by protective hedging from long holders rather than outright bearish bets, and can unwind quickly if earnings confirm the trend. | ||
The company has beaten earnings estimates in all four of the most recent quarters, with the average positive surprise at 10%, ranging from 2.7% to 23% — a pattern that suggests the business is consistently delivering ahead of expectations.
→StableCatalyst breakdown
- Expectation
- The beat streak extends to 6 consecutive quarters with average surprise remaining above 5%, confirming the delivery cadence is structural.
CounterThe most recent beat of 11.4% followed a quarter in which estimates may have been already revised lower; if the consumer environment softens, the beat cushion narrows and the streak could break on a modest miss.
With a debt-to-equity ratio of 3.2 and free cash flow at only 34% of net income, the balance sheet carries meaningful leverage while cash conversion quality is flagged as a concern, leaving less cushion if earnings soften.
→StableQuality breakdown
- Expectation
- If leverage risk resolves, free cash flow as a percentage of net income rises above 60% and debt-to-equity falls below 2.5 over the next 2 annual periods.
CounterRetail businesses routinely operate with elevated debt-to-equity when financing store expansion; the leverage may be productive if store-level returns are high, which the 39% return on equity suggests they are — though that return is distorted by the buyback-shrunk equity base.
The share price is above the near-term resistance level, with only 0.8% headroom to the take-profit target and a reward-to-risk ratio of 0.11-to-1, making the current entry point geometrically unattractive regardless of the business quality.
→StablePrice targets
- Expectation
- If the setup improves, the share price pulls back at least 7% from current levels, restoring upside-to-downside asymmetry above 1.5-to-1.
CounterStocks in a confirmed breakout configuration — golden cross, above all moving averages, bullish MACD — can run through technical resistance targets as the trend attracts momentum buyers; selling at the target may be premature.
With a put/call ratio of 1.39 and the stock trading above the options max pain level of $120, the options market is positioned defensively, suggesting a portion of the market expects near-term mean-reversion.
→StableRisk breakdown
- Expectation
- If hedging pressure abates, the put/call ratio falls below 0.8 and the share price holds above $250 for 8 consecutive weeks.
CounterElevated put/call ratios on high-momentum names are often driven by protective hedging from long holders rather than outright bearish bets, and can unwind quickly if earnings confirm the trend.
TrendMatrix Research · core thesis
Engine thesis — one sentence
BURL has beaten earnings estimates in each of the last four quarters with an average surprise of 10%, and the technical setup is in a breakout configuration, but with the share price above the near-term resistance target and unfavorable reward-to-risk geometry, adding to the position is not warranted until the stock resets to a better entry.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 4.1 |
| Gross margin | 4.8 |
| Op margin | 2.4 |
| Net margin | 2.6 |
| Current ratio | 4.5 |
| FCF quality | 2.7 |
| Moat | 6.8 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 39%
- ▸Earnings quality RED FLAG: 34% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
5.3/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 6.0 |
| EPS growth | 4.7 |
Momentum
2.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 8.2 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 4.0 |
| Volume | 0.9 |
- ▸Oversold in uptrend (RSI 27)
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 7.4 |
| erm sentiment | 4.6 |
Insider
3.9/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 5.1 |
- ▸Modest insider selling — $12,257,563 (0.062% of mkt cap)
Peer rank
4.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.3 |
| quality rank | 5.9 |
| growth rank | 6.3 |
Technical
8.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.4 |
| support resistance | 9.0 |
| 52w position | 7.8 |
Risk (lower is worse)
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.3 |
| days to cover | 8.5 |
| volatility | 3.5 |
| put call | 1.5 |
| implied vol | 5.2 |
| beta | 5.2 |
| debt equity | 1.8 |
- ▸Elevated put/call: 1.77
Catalyst
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 7.5 |
- ▸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 (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:55d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:2.8<4.5
- ASYMMETRY:0.8<1.5@spot
Warning (0)
none
Reward-to-Risk
0.76
Upside
+5.5%
Downside
7.2%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.46>1.3
Investment implication
The F-path SELL output reflects an overall score of 3.5 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Technical at 8.4) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:2.8<4.5, ASYMMETRY:0.8<1.5@spot) reinforce the read. Current asymmetry R:R is 0.76 — supplementary context, not the trigger for this path.
The strongest dimensions are Technical at 8.4, Catalyst at 6.9, and Sentiment at 5.7; the weakest are Momentum at 2.8, Insider at 3.9, and Risk (lower is worse) at 4.6. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of 0.76 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Four Quarter Beat Streak
Trip ifEPS surprise falls below 0% for 2 consecutive quarters, breaking the beat streak.
- P2Elevated Leverage Fcf Conversion
Trip ifFree cash flow as a percentage of net income rises above 60% for 2 consecutive annual periods.
- P3Price Above Target No Asymmetry
Trip ifShare price pulls back more than 7% from current levels, with upside to take-profit exceeding 8%.
- P4Elevated Put Call Ratio
Trip ifPut/call ratio falls below 0.8 for 8 consecutive weeks.