Value
8.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.9 |
| P/S | 9.6 |
| EV/EBITDA | 7.8 |
| Fwd P/E | 9.3 |
| PEG | 10.0 |
| Analyst target | 6.0 |
- ▸Forward P/E: 9.9x
- ▸PEG: 0.17
- ▸Attractively valued
CBT · Why this verdict
Why Cabot (CBT) 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
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. People who build TrendMatrix, or entities they control, may hold positions, long or short, in securities it covers, and may trade them at any time. Positions are not disclosed individually. Verdicts are generated by an automated model applied by the same rules to every covered stock, and are not adjusted for any position held by the people who build TrendMatrix. We do not accept payment from issuers for coverage.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security.
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 score6.2/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Cabot is an attractively valued specialty chemicals company (forward P/E 10.6x) with a perfect four-quarter beat streak and excellent cash conversion, but heavy insider selling and only 5.6% upside to the analyst target temper the case ahead of earnings tomorrow.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The price of $74.43 is only 5.6% below the $78.59 analyst target, with 5.0% downside to the stop, a reward-to-risk of 1.12. Upside pct | Analyst targets rise enough to restore at least 15% upside after earnings. | →Stable |
| CounterLight analyst coverage (6 analysts) means the target may be stale, and a strong earnings beat could quickly reset it higher. | ||
Cabot trades at a forward P/E of 10.6x with a PEG of 0.37, which the data calls attractively valued. Valuation breakdown | Earnings growth holds so the PEG stays below 1 over the next 12 months. | →Stable |
| CounterSpecialty chemicals are cyclical, and a cheap multiple on peak earnings can turn into a value trap if demand softens. | ||
Free cash flow is 136% of net income, an excellent cash conversion rate alongside a 7/9 Piotroski score. Quality breakdown | Free cash flow to net income stays above 100% over the next four quarters. | →Stable |
| CounterCash conversion above 100% can come from working-capital releases or deferred capex that do not repeat. | ||
Cabot has beaten EPS estimates in four straight quarters with an average surprise of 5.69%. Earnings track record | EPS beats consensus again at tomorrow's report and in at least 3 of the next 4 quarters. | →Stable |
| CounterThe latest beat was only 0.71%, and earnings land tomorrow as a binary event with a 13% short interest. | ||
Insiders sold $19,646,314, or 0.511% of market cap, flagged as heavy selling that cuts against the bullish valuation case. Insider breakdown | Insider selling fades to under 0.1% of market cap over the next two quarters. | →Stable |
| CounterExecutive sales may be routine diversification, and the selling is a small share of the company's market value. | ||
The price of $74.43 is only 5.6% below the $78.59 analyst target, with 5.0% downside to the stop, a reward-to-risk of 1.12.
→StableUpside pct
- Expectation
- Analyst targets rise enough to restore at least 15% upside after earnings.
CounterLight analyst coverage (6 analysts) means the target may be stale, and a strong earnings beat could quickly reset it higher.
Cabot trades at a forward P/E of 10.6x with a PEG of 0.37, which the data calls attractively valued.
→StableValuation breakdown
- Expectation
- Earnings growth holds so the PEG stays below 1 over the next 12 months.
CounterSpecialty chemicals are cyclical, and a cheap multiple on peak earnings can turn into a value trap if demand softens.
Free cash flow is 136% of net income, an excellent cash conversion rate alongside a 7/9 Piotroski score.
→StableQuality breakdown
- Expectation
- Free cash flow to net income stays above 100% over the next four quarters.
CounterCash conversion above 100% can come from working-capital releases or deferred capex that do not repeat.
Cabot has beaten EPS estimates in four straight quarters with an average surprise of 5.69%.
→StableEarnings track record
- Expectation
- EPS beats consensus again at tomorrow's report and in at least 3 of the next 4 quarters.
CounterThe latest beat was only 0.71%, and earnings land tomorrow as a binary event with a 13% short interest.
Insiders sold $19,646,314, or 0.511% of market cap, flagged as heavy selling that cuts against the bullish valuation case.
→StableInsider breakdown
- Expectation
- Insider selling fades to under 0.1% of market cap over the next two quarters.
CounterExecutive sales may be routine diversification, and the selling is a small share of the company's market value.
Per-dimension breakdown
Quality
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.7 |
| ROA | 5.9 |
| Gross margin | 0.7 |
| Op margin | 5.4 |
| Net margin | 2.8 |
| Current ratio | 7.5 |
| FCF quality | 5.1 |
| Moat | 6.1 |
| Piotroski F | 8.9 |
- ▸Earnings quality warning: 66% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
7.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.5 |
| EPS growth | 10.0 |
Momentum
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 9.9 |
| OBV | 10.0 |
| MA position | 2.2 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA but MA still rising (+1.5%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 3.8 |
| Analyst rating | 6.6 |
| Price target | 7.8 |
- ▸Light analyst coverage (6.0) — signal dampened
- ▸Analyst upside: 22%
Insider
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 2.0 |
| insider conviction | 2.0 |
| holder change | 5.0 |
| notable moves | 5.0 |
- ▸Heavy insider selling — $19,646,314 (0.510% of mkt cap)
Peer rank
6.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.6 |
| quality rank | 6.3 |
| growth rank | 6.9 |
Technical
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.2 |
| support resistance | 5.9 |
| 52w position | 5.5 |
Risk (lower is worse)
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 3.4 |
| days to cover | 0.0 |
| volatility | 5.1 |
| put call | 0.0 |
| implied vol | 4.1 |
| beta | 8.1 |
| debt equity | 6.8 |
| news risk | 6.0 |
- ▸Elevated put/call: 56.11
Catalyst
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 5.7 |
| dividend safety | 6.5 |
| news activity | 8.0 |
- ▸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 (5)
- MOMENTUM:5.3>=4.5
- 8K:CLEAN
- EARNINGS_PROXIMITY:88d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:1.0<1.5@spot
- INSIDER:0.51%=HEAVY
Warning (1)
- MOMENTUM:5.3<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
0.97
Upside
+5.7%
Downside
5.9%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeSector Rotation — Basic Materials sector out of favor, value=8.3
SuitabilityAggressive — MCap $3.9B<$5B
Investment implication
The F-path SELL output reflects an overall score of 5.6 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 8.3) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:1.0<1.5@spot, INSIDER:0.51%=HEAVY) reinforce the read. Current asymmetry R:R is 0.97 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 8.3, Growth at 7.8, and Catalyst at 6.7; the weakest are Insider at 3.5, Risk (lower is worse) at 4.2, and Quality at 5.2. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of 0.97 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Attractive Valuation Low Peg
Trip ifForward P/E exceeds 14x from the current 10.6x.
- P2Excellent Cash Conversion
Trip ifFree cash flow to net income falls below 80% from the current 136%.
- P3Perfect Beat Streak
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P4Heavy Insider Selling
Trip ifInsider selling exceeds 1% of market cap from the current 0.511%.
- P5Thin Upside To Target
Trip ifUpside to the analyst target falls below 0% while downside to the stop exceeds 8%.