Value
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.9 |
| P/S | 9.2 |
| EV/EBITDA | 4.6 |
| Fwd P/E | 5.0 |
| PEG | 10.0 |
| Analyst target | 5.0 |
- ▸Forward P/E: 25.2x
- ▸PEG: 0.39
CAE · Why this verdict
Why CAE (CAE) 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 score5.5/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
CAE offers 9.1% upside and a three-quarter beat run, but a death cross, weak quality and a put/call ratio of 5.5 limit conviction ahead of earnings in 10 days.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Free cash flow is about 242% of net income and the Piotroski score is 7/9, despite a thin operating margin. Quality breakdown | FCF-to-net-income stays above 100%. | →Stable |
| CounterStrong cash conversion with weak margins can reflect working-capital timing and may reverse. | ||
CAE beat EPS estimates in 3 of the last 4 quarters with an average surprise of about 10.1% and none missed. Earnings | EPS keeps beating consensus through the next earnings report and beyond. | →Stable |
| CounterRevenue estimates are provisional and one inline quarter shows beats are not guaranteed. | ||
Price is below the 200-day average with its slope down 3.2% over 30 days, and the death cross is active. Momentum breakdown | Price reclaims the 200-day average within 12 months. | ↑Improving |
| CounterThe setup is labelled a recovery with MACD improving, so the downtrend could be ending. | ||
The put/call ratio is 5.5 with implied volatility of 60%, signalling heavy hedging or bearish bets. Key risks | The put/call ratio normalizes below 2 after earnings. | ↓Deteriorating |
| CounterA high put/call ratio on thin options volume may reflect hedging, and can be a contrarian bullish sign. | ||
Free cash flow is about 242% of net income and the Piotroski score is 7/9, despite a thin operating margin.
→StableQuality breakdown
- Expectation
- FCF-to-net-income stays above 100%.
CounterStrong cash conversion with weak margins can reflect working-capital timing and may reverse.
CAE beat EPS estimates in 3 of the last 4 quarters with an average surprise of about 10.1% and none missed.
→StableEarnings
- Expectation
- EPS keeps beating consensus through the next earnings report and beyond.
CounterRevenue estimates are provisional and one inline quarter shows beats are not guaranteed.
Price is below the 200-day average with its slope down 3.2% over 30 days, and the death cross is active.
↑ImprovingMomentum breakdown
- Expectation
- Price reclaims the 200-day average within 12 months.
CounterThe setup is labelled a recovery with MACD improving, so the downtrend could be ending.
The put/call ratio is 5.5 with implied volatility of 60%, signalling heavy hedging or bearish bets.
↓DeterioratingKey risks
- Expectation
- The put/call ratio normalizes below 2 after earnings.
CounterA high put/call ratio on thin options volume may reflect hedging, and can be a contrarian bullish sign.
Per-dimension breakdown
Quality
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.9 |
| ROA | 2.4 |
| Gross margin | 1.7 |
| Op margin | 4.0 |
| Net margin | 2.9 |
| Current ratio | 3.3 |
| FCF quality | 10.0 |
| Moat | 5.0 |
| Piotroski F | 7.8 |
- ▸Excellent cash conversion: 242% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
Growth
7.1/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.2 |
| EPS growth | 10.0 |
Momentum
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.9 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 7.5 |
| Volume | 3.5 |
- ▸Overbought (RSI 81)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat/negative + RSI 81 (late-cycle distribution risk)
Sentiment
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.1 |
| Price target | 7.9 |
| erm sentiment | 5.2 |
- ▸Light analyst coverage (3.0) — signal dampened
- ▸Analyst upside: 22%
Insider
5.0/10data confidence 50%Peer rank
3.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.8 |
| quality rank | 3.7 |
| growth rank | 1.5 |
Technical
2.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.4 |
| support resistance | 0.2 |
| 52w position | 5.9 |
Risk (lower is worse)
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| days to cover | 2.5 |
| volatility | 5.8 |
| put call | 0.0 |
| implied vol | 0.4 |
| beta | 7.1 |
| debt equity | 7.5 |
- ▸Elevated put/call: 5.50
- ▸High IV: 78%
Catalyst
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 5.7 |
- ▸Earnings in 7 days
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:7.0>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:0.2<1.5@spot
- EARNINGS_PROXIMITY:7d<=7d
Warning (1)
- DEATH_CROSS:momentum=7.0>=5.0 recovering
Reward-to-Risk
0.24
Upside
+3.5%
Downside
15.0%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 81
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 4.3 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Growth at 7.1) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:0.2<1.5@spot, EARNINGS_PROXIMITY:7d<=7d) reinforce the read. Current asymmetry R:R is 0.24 — supplementary context, not the trigger for this path.
The strongest dimensions are Growth at 7.1, Momentum at 7.0, and Sentiment at 6.5; the weakest are Technical at 2.2, Peer rank at 3.6, and Risk (lower is worse) at 3.9. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of 0.24 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Earnings Beat Run
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P2Strong Cash Conversion
Trip ifFCF-to-net-income falls below 80% from the current 242%.
- P3Death Cross Downtrend
Trip ifPrice stays below the 200-day average with its 30-day slope below -3%.
- P4Bearish Options Positioning
Trip ifThe put/call ratio stays above 3 after the next earnings report.