Value
6.7/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 4.1 |
| P/S | 6.8 |
| Fwd P/E | 9.4 |
| PEG | 7.0 |
| Analyst target | 6.0 |
- ▸Forward P/E: 9.1x
- ▸PEG: 1.00
CG · Why this verdict
Why The Carlyle Group (CG) 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 score5.3/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
A bankruptcy-related news flag, two recent earnings misses, a confirmed long-term downtrend, and an exceptionally elevated put/call ratio combine to shift the risk calculus decisively toward caution — the theoretical 17.5% upside to the analyst target does not offset the severity of these concurrent warning signals.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
A debt-to-equity ratio of 2.0 constrains the firm's ability to absorb a prolonged earnings shortfall; if operating cash flows soften amid continued misses, the leverage load leaves less cushion against a credit or liquidity stress event. Bear case | Debt-to-equity ratio falls below 1.5x as earnings recovery and cash generation allow incremental deleveraging over the next 12 months. | ↓Deteriorating |
| CounterAsset managers routinely carry leverage on corporate balance sheets to seed new funds and fund acquisitions; a D/E of 2.0 is not inherently distressed for this business model, and the level of analyst conviction (31% consensus upside target) implies the Street views the leverage as manageable. | ||
A red-flag news event referencing bankruptcy has triggered an exit-level caution signal, introducing the risk of near-term material disruption that fundamental multiples alone cannot adequately price. Warnings | This pillar is falsified if 0 formal bankruptcy, restructuring, or credit-event regulatory filings emerge over 90 consecutive days, fully retiring the news flag. | ↓Deteriorating |
| CounterIn alternative asset management, bankruptcy references frequently relate to a portfolio company rather than the manager itself; absent a direct balance-sheet threat, the news may represent routine counterparty exposure rather than existential risk to the firm. | ||
The two most recent quarters both came in below consensus — the most recent by 2.8% and the prior by 5.8% — producing a negative average surprise of roughly 1% across all four quarters, indicating the business is not consistently delivering against expectations. Catalyst breakdown | EPS surprise turns positive and exceeds 3% for 2 consecutive quarters, demonstrating a return to reliable execution. | ↓Deteriorating |
| CounterThe two quarters before the recent misses were beats, suggesting lumpy earnings recognition typical of alternative asset managers rather than a fundamental deterioration; the Street still has a 31% upside target embedded in analyst consensus. | ||
The stock is trading below its 200-day moving average, and the long-term trend is declining at roughly 3.8% per month — a confirmed downtrend that makes any recovery difficult to sustain without a genuine change in business momentum. Momentum breakdown | Stock closes above its 200-day moving average for 10 consecutive trading days with the moving average slope turning flat or positive. | ↑Improving |
| CounterMACD is improving and a death-cross recovery appears to be underway; the near-term price action is constructive relative to the longer-term trend, and RSI at 53 is neutral rather than oversold — the downtrend may already be reversing. | ||
A put/call ratio of 3.69 — nearly four protective puts for every call — combined with elevated implied volatility of 75% reflects heavy institutional demand for downside protection, a signal that market participants with large positions see meaningful near-term risk. Risk breakdown | Put/call ratio compresses below 2.0 and implied volatility retreats below 50% as the news overhang resolves. | ↓Deteriorating |
| CounterExtreme put/call ratios can mark sentiment extremes where peak hedging precedes sharp reversals; if the feared event does not materialize, the unwind of protective positions can itself drive a significant recovery. | ||
A debt-to-equity ratio of 2.0 constrains the firm's ability to absorb a prolonged earnings shortfall; if operating cash flows soften amid continued misses, the leverage load leaves less cushion against a credit or liquidity stress event.
↓DeterioratingBear case
- Expectation
- Debt-to-equity ratio falls below 1.5x as earnings recovery and cash generation allow incremental deleveraging over the next 12 months.
CounterAsset managers routinely carry leverage on corporate balance sheets to seed new funds and fund acquisitions; a D/E of 2.0 is not inherently distressed for this business model, and the level of analyst conviction (31% consensus upside target) implies the Street views the leverage as manageable.
A red-flag news event referencing bankruptcy has triggered an exit-level caution signal, introducing the risk of near-term material disruption that fundamental multiples alone cannot adequately price.
↓DeterioratingWarnings
- Expectation
- This pillar is falsified if 0 formal bankruptcy, restructuring, or credit-event regulatory filings emerge over 90 consecutive days, fully retiring the news flag.
CounterIn alternative asset management, bankruptcy references frequently relate to a portfolio company rather than the manager itself; absent a direct balance-sheet threat, the news may represent routine counterparty exposure rather than existential risk to the firm.
The two most recent quarters both came in below consensus — the most recent by 2.8% and the prior by 5.8% — producing a negative average surprise of roughly 1% across all four quarters, indicating the business is not consistently delivering against expectations.
↓DeterioratingCatalyst breakdown
- Expectation
- EPS surprise turns positive and exceeds 3% for 2 consecutive quarters, demonstrating a return to reliable execution.
CounterThe two quarters before the recent misses were beats, suggesting lumpy earnings recognition typical of alternative asset managers rather than a fundamental deterioration; the Street still has a 31% upside target embedded in analyst consensus.
The stock is trading below its 200-day moving average, and the long-term trend is declining at roughly 3.8% per month — a confirmed downtrend that makes any recovery difficult to sustain without a genuine change in business momentum.
↑ImprovingMomentum breakdown
- Expectation
- Stock closes above its 200-day moving average for 10 consecutive trading days with the moving average slope turning flat or positive.
CounterMACD is improving and a death-cross recovery appears to be underway; the near-term price action is constructive relative to the longer-term trend, and RSI at 53 is neutral rather than oversold — the downtrend may already be reversing.
A put/call ratio of 3.69 — nearly four protective puts for every call — combined with elevated implied volatility of 75% reflects heavy institutional demand for downside protection, a signal that market participants with large positions see meaningful near-term risk.
↓DeterioratingRisk breakdown
- Expectation
- Put/call ratio compresses below 2.0 and implied volatility retreats below 50% as the news overhang resolves.
CounterExtreme put/call ratios can mark sentiment extremes where peak hedging precedes sharp reversals; if the feared event does not materialize, the unwind of protective positions can itself drive a significant recovery.
Per-dimension breakdown
Quality
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.1 |
| ROA | 1.6 |
| Gross margin | 10.0 |
| Net margin | 8.4 |
| Current ratio | 7.0 |
| Moat | 4.6 |
| Piotroski F | 4.4 |
- ▸Strong margins: 17%
- ▸No competitive moat
Growth
5.0/10data confidence 50%Momentum
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.1 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 4.0 |
| Volume | 0.5 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -5.4%/30d — confirmed downtrend
Sentiment
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.3 |
| Price target | 8.3 |
| erm sentiment | 3.8 |
- ▸Analyst upside: 27%
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
2.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.2 |
| quality rank | 3.8 |
| growth rank | 0.0 |
Technical
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.4 |
| support resistance | 3.9 |
| 52w position | 3.1 |
Risk (lower is worse)
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.8 |
| days to cover | 6.5 |
| volatility | 3.7 |
| beta | 3.9 |
| debt equity | 3.0 |
Catalyst
3.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 3.5 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 2.0 |
| dividend safety | 2.0 |
- ▸Earnings concerns: 2B/2M
- ▸Dividend: 3.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:5.5>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:15d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:1.2<1.5@spot
Warning (1)
- DEATH_CROSS:momentum=5.5>=5.0 recovering
Reward-to-Risk
1.22
Upside
+14.0%
Downside
11.5%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 69
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.83>1.3
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 ( Insider at 7.3) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:1.2<1.5@spot) reinforce the read. Current asymmetry R:R is 1.22 — supplementary context, not the trigger for this path.
The strongest dimensions are Insider at 7.3, Value at 6.7, and Sentiment at 6.7; the weakest are Peer rank at 2.1, Catalyst at 3.2, and Technical at 3.5. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 1.22 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Bankruptcy News Risk Flag
Trip ifThe count of formal bankruptcy, restructuring, or credit-event regulatory filings falls to 0 over any 90 consecutive calendar days, fully retiring the news flag.
- P2Consecutive Earnings Misses
Trip ifEPS surprise exceeds 3% for 2 consecutive quarters.
- P3Confirmed Long Term Downtrend
Trip ifStock closes above its 200-day moving average for 10 consecutive trading days.
- P4Extreme Options Hedging Signal
Trip ifPut/call ratio compresses below 1.5 and stays there for 4 consecutive weeks.
- P5Leverage Limits Financial Flexibility
Trip ifDebt-to-equity ratio falls below 1.5x in any reported quarter.