Value
3.3/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 2.3 |
| P/S | 9.5 |
| EV/EBITDA | 2.5 |
| Fwd P/E | 1.6 |
| Analyst target | 3.0 |
- ▸Forward P/E: 65.2x
CALM · Why this verdict
Why Cal-Maine Foods (CALM) 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 score3.3/10
ConfidenceHIGH
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Cal-Maine is a single-product egg producer whose revenue and earnings are collapsing, with a quality score of 2.0 and a price above the analyst target.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Quality scores 2.0 with a free-cash-flow-to-net-income ratio of -299%. Quality breakdown | Quality score recovers above 4.0. | →Stable |
| CounterThe company's past strong cash generation shows quality could recover with prices. | ||
Revenue is declining 42% and growth scores 0.0, as egg prices normalize. Growth breakdown | Revenue stabilizes with decline narrowing below 10%. | →Stable |
| CounterEgg pricing is volatile and can spike again from supply shocks such as avian flu. | ||
CAL-Maine missed EPS estimates in the last 2 quarters, including a -$0.77 result against a +$0.11 estimate. Earnings | EPS returns to beating consensus. | →Stable |
| CounterResults swing with egg prices, and prior beats in April and January show earnings can rebound quickly. | ||
Forward P/E is 62.6x and the price is 8.6% above the analyst target of $58.08. Valuation breakdown | Earnings recover and forward P/E drops below 30x. | ↓Deteriorating |
| CounterA high forward P/E on trough earnings can be misleading if earnings rebound. | ||
Quality scores 2.0 with a free-cash-flow-to-net-income ratio of -299%.
→StableQuality breakdown
- Expectation
- Quality score recovers above 4.0.
CounterThe company's past strong cash generation shows quality could recover with prices.
Revenue is declining 42% and growth scores 0.0, as egg prices normalize.
→StableGrowth breakdown
- Expectation
- Revenue stabilizes with decline narrowing below 10%.
CounterEgg pricing is volatile and can spike again from supply shocks such as avian flu.
CAL-Maine missed EPS estimates in the last 2 quarters, including a -$0.77 result against a +$0.11 estimate.
→StableEarnings
- Expectation
- EPS returns to beating consensus.
CounterResults swing with egg prices, and prior beats in April and January show earnings can rebound quickly.
Forward P/E is 62.6x and the price is 8.6% above the analyst target of $58.08.
↓DeterioratingValuation breakdown
- Expectation
- Earnings recover and forward P/E drops below 30x.
CounterA high forward P/E on trough earnings can be misleading if earnings rebound.
Per-dimension breakdown
Quality
2.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.8 |
| ROA | 0.3 |
| Gross margin | 0.0 |
| Op margin | 0.0 |
| Net margin | 1.2 |
| Current ratio | 5.3 |
| FCF quality | 0.0 |
| Moat | 3.6 |
| Piotroski F | 6.7 |
- ▸Earnings quality RED FLAG: -299% FCF/NI
- ▸No competitive moat
- ▸Quality concerns
Growth
0.0/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 0.0 |
- ▸Declining revenue: -42%
Momentum
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.6 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 4.0 |
| Volume | 3.1 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -3.0%/30d — confirmed downtrend
Sentiment
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 5.1 |
| erm sentiment | 5.0 |
Insider
6.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 6.9 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
2.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 0.0 |
| quality rank | 4.4 |
| growth rank | 0.0 |
Technical
2.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 1.3 |
| 52w position | 4.3 |
| gap | 5.0 |
Risk (lower is worse)
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 1.9 |
| days to cover | 6.4 |
| volatility | 5.2 |
| put call | 0.0 |
| implied vol | 5.6 |
| beta | 10.0 |
- ▸High short interest justified: 16%
- ▸Elevated put/call: 2.20
- ▸Concentration risks: 1 HIGH, 2 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
3.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 3.5 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| dividend safety | 4.3 |
- ▸Earnings concerns: 2B/2M
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (7)
- MOMENTUM:6.1>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:62d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.3=NEGATIVE
Warning (1)
- DEATH_CROSS:momentum=6.1>=5.0 recovering
Reward-to-Risk
-1.26
Upside
-14.7%
Downside
11.7%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 64
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $3.1B<$5B
Investment implication
The SELL_IF_HOLDING verdict reflects the ASYMMETRY gate's -1.3=NEGATIVE outcome against Insider at 6.3 and asymmetric R:R of -1.26.
The strongest dimensions are Insider at 6.3, Momentum at 6.1, and Sentiment at 5.0; the weakest are Growth at 0.0, Quality at 2.0, and Peer rank at 2.3. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -1.26 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Revenue Collapse
Trip ifRevenue decline exceeds 30% YoY for 2 more quarters.
- P2Earnings Misses
Trip ifEPS surprise stays below 0% for 2 more consecutive quarters.
- P3Quality Floor Breach
Trip ifQuality score stays below 3.0 for 2 consecutive quarters.
- P4Rich Valuation Below Target
Trip ifForward P/E stays above 50x for 2 consecutive quarters.