Value
4.1/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 1.4 |
| P/S | 2.2 |
| Fwd P/E | 3.1 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 34.3x
- ▸PEG: 0.17
BWAY · Why this verdict
Why Brainsway (BWAY) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score6.4/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
BWAY's strong revenue and earnings growth are tempered by an earnings-quality red flag, a failed asymmetry gate after the stock already reached its price target, and recent insider selling.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Despite strong headline margins, the engine flags an earnings-quality red flag with free cash flow at only 35% of net income, suggesting reported earnings may overstate cash generation. Quality breakdown | The FCF-to-net-income ratio should improve toward 70-100% over the next few quarters if earnings quality is not actually deteriorating. | →Stable |
| CounterA temporary dip in cash conversion can reflect working-capital timing or growth investment rather than a genuine earnings-quality problem. | ||
Revenue and earnings are both growing strongly, with the engine's growth notes citing 35% year-over-year revenue growth and a maximum growth score of 10. Growth breakdown | Revenue growth should stay above 20% year-over-year over the next several quarters to sustain the growth premium. | →Stable |
| CounterHigh growth paired with a best-in-class margin ranking and a 28.1x forward P/E leaves little room for error if growth decelerates. | ||
The stock has already reached its prior price target, with modeled upside now slightly negative at -2.1%, causing the engine's asymmetry gate to fail. Warnings | A fresh, higher price target or a pullback should restore positive modeled upside over the next 12 months. | ↓Deteriorating |
| CounterReaching a price target can also mark the start of a longer re-rating higher if the growth story continues to outperform, rather than a hard ceiling. | ||
Insiders sold shares in seven separate transactions over the past 90 days, producing a bearish insider signal. Insider | Insider signal should shift back to neutral or bullish over the next two quarters if selling pressure abates. | →Stable |
| CounterRoutine, pre-scheduled selling plans (Rule 10b5-1) by insiders at a growth company are common and don't necessarily reflect a negative view of the business. | ||
Despite strong headline margins, the engine flags an earnings-quality red flag with free cash flow at only 35% of net income, suggesting reported earnings may overstate cash generation.
→StableQuality breakdown
- Expectation
- The FCF-to-net-income ratio should improve toward 70-100% over the next few quarters if earnings quality is not actually deteriorating.
CounterA temporary dip in cash conversion can reflect working-capital timing or growth investment rather than a genuine earnings-quality problem.
Revenue and earnings are both growing strongly, with the engine's growth notes citing 35% year-over-year revenue growth and a maximum growth score of 10.
→StableGrowth breakdown
- Expectation
- Revenue growth should stay above 20% year-over-year over the next several quarters to sustain the growth premium.
CounterHigh growth paired with a best-in-class margin ranking and a 28.1x forward P/E leaves little room for error if growth decelerates.
The stock has already reached its prior price target, with modeled upside now slightly negative at -2.1%, causing the engine's asymmetry gate to fail.
↓DeterioratingWarnings
- Expectation
- A fresh, higher price target or a pullback should restore positive modeled upside over the next 12 months.
CounterReaching a price target can also mark the start of a longer re-rating higher if the growth story continues to outperform, rather than a hard ceiling.
Insiders sold shares in seven separate transactions over the past 90 days, producing a bearish insider signal.
→StableInsider
- Expectation
- Insider signal should shift back to neutral or bullish over the next two quarters if selling pressure abates.
CounterRoutine, pre-scheduled selling plans (Rule 10b5-1) by insiders at a growth company are common and don't necessarily reflect a negative view of the business.
Per-dimension breakdown
Quality
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.2 |
| ROA | 2.2 |
| Gross margin | 10.0 |
| Op margin | 5.2 |
| Net margin | 7.8 |
| Current ratio | 9.7 |
| FCF quality | 2.8 |
| Moat | 8.4 |
| Rule of 40 | 5.5 |
| Piotroski F | 10.0 |
- ▸Strong margins: 16%
- ▸Earnings quality RED FLAG: 35% FCF/NI
- ▸Wide economic moat
- ▸Compounder quality: strong returns + growth
Growth
10.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 10.0 |
- ▸Strong growth: 35% YoY
Momentum
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.6 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.5 |
| Analyst rating | 6.8 |
| Price target | 5.9 |
- ▸Light analyst coverage (3.0) — signal dampened
Insider
3.9/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 3.6 |
| notable moves | 3.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
6.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 0.8 |
| quality rank | 8.0 |
| growth rank | 8.7 |
- ▸Best-in-class margins
- ▸Industry growth leader
Technical
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.6 |
| support resistance | 1.2 |
| 52w position | 9.1 |
| gap | 6.0 |
Risk (lower is worse)
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.7 |
| days to cover | 9.1 |
| volatility | 0.0 |
| implied vol | 0.0 |
| beta | 10.0 |
| debt equity | 9.6 |
- ▸High IV: 96%
Catalyst
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| news activity | 6.0 |
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (7)
- MOMENTUM:6.9>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:19d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.6=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.64
Upside
-9.6%
Downside
15.0%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 61, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $0.7B<$5B
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:6.9>=5.5. Top dim: Growth at 10.0; weakest: Insider at 3.9. No conviction either direction.
The strongest dimensions are Growth at 10.0, Catalyst at 7.2, and Momentum at 6.9; the weakest are Insider at 3.9, Value at 4.1, and Technical at 4.2. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -0.64 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Strong Growth Profile
Trip ifRevenue growth falls below 15% YoY for 2 consecutive quarters.
- P2Earnings Quality Red Flag
Trip ifFCF-to-net-income ratio falls below 20% for 2 consecutive quarters.
- P3Target Reached Negative Asymmetry
Trip ifModeled upside stays below 0% for more than 2 consecutive quarters.
- P4Insider Selling Pressure
Trip ifNet insider selling exceeds $2 million over any rolling 90-day period.