Value
7.1/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 9.0 |
| Fwd P/E | 6.0 |
| PEG | 5.5 |
| Analyst target | 6.0 |
- ▸Forward P/E: 21.7x
- ▸PEG: 1.37
- ▸Attractively valued
CDRO · Why this verdict
Why Codere Online Luxembourg (CDRO) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.1/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Codere Online shows excellent cash conversion and strong Piotroski quality, but weakening momentum that has tripped the engine's gate, value-trap signals from margin compression, and a thin risk/reward asymmetry argue for reducing exposure rather than adding.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The engine flags 2 of 5 value-trap signals -- operating margin has compressed to 2.6% and insiders made 5 sells worth 0.04% of market cap -- suggesting the low valuation multiple may not be a genuine bargain. Bear case | Operating margin should recover above 5% over the next 4 quarters to disprove the value-trap read. | ↓Deteriorating |
| CounterOnline gambling operators often see temporary margin compression from marketing spend tied to new market launches that reverses once customer acquisition costs normalize. | ||
The company shows excellent cash conversion at 1000% of FCF-to-net-income and a strong Piotroski F-Score of 8 out of 9, even though it fails the engine's Rule of 40 growth-plus-margin test. Quality breakdown | The Piotroski F-Score should hold at 7 or higher over the next 4 quarters to sustain this pillar. | →Stable |
| CounterAn extremely high FCF-to-net-income ratio like 1000% often signals a one-time working-capital benefit rather than a repeatable cash-generation pattern, which can normalize sharply lower in future periods. | ||
Momentum has weakened, with falling on-balance volume even as price holds above the 200-day moving average, dragging the momentum score down to 3.1 and tripping the engine's momentum gate, which requires 4.5. Momentum breakdown | On-balance volume should turn back to accumulation and momentum score should recover above 4.5 over the next few months. | ↓Deteriorating |
| CounterFalling on-balance volume while price holds above the 200-day MA in a range-bound stock can simply reflect quiet consolidation ahead of the next earnings catalyst, not a reversal signal. | ||
The engine's risk/reward asymmetry ratio sits at just 0.82, below its 1.5 threshold, with only 6.7% upside to target against a wider downside case. Engine gate (failed) | The asymmetry ratio should climb above 1.5 with upside expanding past 10% over the next few months if the setup improves. | →Stable |
| CounterA thin asymmetry ratio in a range-bound stock can simply reflect a fairly priced setup awaiting a catalyst, rather than a genuinely unfavorable risk/reward. | ||
The engine flags 2 of 5 value-trap signals -- operating margin has compressed to 2.6% and insiders made 5 sells worth 0.04% of market cap -- suggesting the low valuation multiple may not be a genuine bargain.
↓DeterioratingBear case
- Expectation
- Operating margin should recover above 5% over the next 4 quarters to disprove the value-trap read.
CounterOnline gambling operators often see temporary margin compression from marketing spend tied to new market launches that reverses once customer acquisition costs normalize.
The company shows excellent cash conversion at 1000% of FCF-to-net-income and a strong Piotroski F-Score of 8 out of 9, even though it fails the engine's Rule of 40 growth-plus-margin test.
→StableQuality breakdown
- Expectation
- The Piotroski F-Score should hold at 7 or higher over the next 4 quarters to sustain this pillar.
CounterAn extremely high FCF-to-net-income ratio like 1000% often signals a one-time working-capital benefit rather than a repeatable cash-generation pattern, which can normalize sharply lower in future periods.
Momentum has weakened, with falling on-balance volume even as price holds above the 200-day moving average, dragging the momentum score down to 3.1 and tripping the engine's momentum gate, which requires 4.5.
↓DeterioratingMomentum breakdown
- Expectation
- On-balance volume should turn back to accumulation and momentum score should recover above 4.5 over the next few months.
CounterFalling on-balance volume while price holds above the 200-day MA in a range-bound stock can simply reflect quiet consolidation ahead of the next earnings catalyst, not a reversal signal.
The engine's risk/reward asymmetry ratio sits at just 0.82, below its 1.5 threshold, with only 6.7% upside to target against a wider downside case.
→StableEngine gate (failed)
- Expectation
- The asymmetry ratio should climb above 1.5 with upside expanding past 10% over the next few months if the setup improves.
CounterA thin asymmetry ratio in a range-bound stock can simply reflect a fairly priced setup awaiting a catalyst, rather than a genuinely unfavorable risk/reward.
Per-dimension breakdown
Quality
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.6 |
| ROA | 3.1 |
| Gross margin | 10.0 |
| Op margin | 1.0 |
| Net margin | 0.3 |
| Current ratio | 5.1 |
| FCF quality | 10.0 |
| Moat | 7.2 |
| Rule of 40 | 3.0 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 1000% FCF/NI
- ▸Rule of 40: 14 (fail)
- ▸Strong Piotroski F-Score: 8/9
Growth
4.7/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.1 |
| EPS growth | 5.2 |
Momentum
2.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 3.0 |
| OBV | 1.0 |
| MA position | 4.0 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.1 |
| Price target | 8.6 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (3.0) — signal dampened
- ▸Analyst upside: 31%
Insider
2.7/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 1.4 |
| notable moves | 3.0 |
- ▸Modest insider selling — $172,384 (0.041% of mkt cap)
- ▸Institutions reducing
Peer rank
3.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.3 |
| quality rank | 1.3 |
| growth rank | 2.5 |
Technical
8.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 9.4 |
| support resistance | 7.1 |
| 52w position | 7.9 |
Risk (lower is worse)
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.8 |
| days to cover | 2.1 |
| volatility | 2.4 |
| beta | 10.0 |
| debt equity | 9.5 |
Catalyst
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 7.9 |
- ▸Earnings in 6 days
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:2.7<4.5
- ASYMMETRY:1.4<1.5@spot
- EARNINGS_PROXIMITY:6d<=7d
Warning (0)
none
Reward-to-Risk
1.38
Upside
+11.1%
Downside
8.1%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeInst Constrain — Small cap ($0.4B) below institutional reach
SuitabilityAggressive — MCap $0.4B<$5B
Investment implication
The F-path SELL output fired on the hard insider floor: insider score of 2.7 sits below the 3.0 threshold (heavy insider selling), which triggers SELL regardless of other dimensions. Co-occurring failed gates ( MOMENTUM:2.7<4.5, ASYMMETRY:1.4<1.5@spot, EARNINGS_PROXIMITY:6d<=7d) reinforce the read. Current asymmetry R:R is 1.38 — supplementary context, not the trigger for this path.
The strongest dimensions are Technical at 8.1, Value at 7.1, and Sentiment at 6.6; the weakest are Insider at 2.7, Momentum at 2.7, and Peer rank at 3.1. The V9 engine flagged 3 failed gates, producing an asymmetric reward-to-risk of 1.38 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Weak Momentum Below Gate Threshold
Trip ifMomentum score stays below 4.5 for 2 more consecutive months while price falls more than 10%.
- P2Value Trap Margin Compression
Trip ifOperating margin stays below 3% for 2 more consecutive quarters.
- P3Excellent Cash Conversion Quality
Trip ifPiotroski F-Score falls below 5 out of 9.
- P4Thin Asymmetric Risk Reward
Trip ifAsymmetry ratio stays below 1.0 for 2 more consecutive months.