Value
9.3/10data confidence 20%| Component | Sub-score |
|---|---|
| P/S | 9.3 |
- ▸Attractively valued
CNNE · Why this verdict
Why Cannae Holdings (CNNE) is rated SELL
Updated
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VerdictSELL
Overall score4.5/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Cannae Holdings screens cheap on price-to-sales and shows a technical trend-continuation setup, but a failed risk/reward gate, a death-cross hard block, four consecutive and deepening earnings misses, and quality below the investability floor keep conviction and position sizing at essentially zero.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Value scores well at 7.3, with the notes flagging the stock as attractively valued, driven substantially by an elevated price-to-sales component score of 9.3. Valuation breakdown | The value score should hold above 6 as the price-to-sales-based cheapness persists over the next 12 months. | →Stable |
| CounterValue confidence is only 0.33, and the peer growth rank sits near the bottom of the peer group (0.31), meaning the cheapness may reflect legitimately weak fundamentals rather than mispricing. | ||
The company has missed earnings estimates in all of the last four reported quarters, with surprises of -59%, -415%, -259%, and -1,264%, pulling the average surprise to -499%. Earnings | If this pattern holds, expect continued misses with a deeply negative average surprise in upcoming reporting periods. | ↑Improving |
| CounterThe most recent quarter's miss of -59% was the smallest in magnitude of the last four, which could indicate the trend of deepening misses is beginning to moderate. | ||
Quality sits below the engine's investability floor at 2.2 versus a 4.0 minimum, driven by the absence of a competitive moat and a weak Piotroski F-score of 3 out of 9. Quality breakdown | Quality should rise above the 4.0 floor as fundamentals stabilize over the next 12 months. | ↓Deteriorating |
| CounterA current ratio of 6.1 signals solid near-term liquidity, providing a cushion despite persistent quality concerns. | ||
The setup shows trend continuation with RSI at 54 and a bullish MACD, and momentum has cleared the engine's 4.5 gate at 4.6, though flagged as soft against the 5.5 confirmation level. Chart pattern detection | Momentum should climb decisively above 5.5 to exit the soft/watch zone over the next 12 months. | ↓Deteriorating |
| CounterThe momentum notes flag falling on-balance volume and a flat 200-day moving-average slope, suggesting the 'continuation' may lack real conviction behind it. | ||
The engine's own risk/reward gate failed, with an asymmetry ratio of just 0.55 against a 1.5 minimum, and a death-cross hard block also failed, driving position sizing to avoid despite the technical continuation setup. Engine gate (failed) | For the setup to become actionable, asymmetry needs to climb back above 1.5 and the death-cross block needs to clear over the next 12 months. | ↓Deteriorating |
| CounterThe modeled downside of 10.7% is not dramatically larger than the 5.9% upside, so the risk/reward gap, while failing the gate, is not extreme in absolute terms. | ||
Value scores well at 7.3, with the notes flagging the stock as attractively valued, driven substantially by an elevated price-to-sales component score of 9.3.
→StableValuation breakdown
- Expectation
- The value score should hold above 6 as the price-to-sales-based cheapness persists over the next 12 months.
CounterValue confidence is only 0.33, and the peer growth rank sits near the bottom of the peer group (0.31), meaning the cheapness may reflect legitimately weak fundamentals rather than mispricing.
The company has missed earnings estimates in all of the last four reported quarters, with surprises of -59%, -415%, -259%, and -1,264%, pulling the average surprise to -499%.
↑ImprovingEarnings
- Expectation
- If this pattern holds, expect continued misses with a deeply negative average surprise in upcoming reporting periods.
CounterThe most recent quarter's miss of -59% was the smallest in magnitude of the last four, which could indicate the trend of deepening misses is beginning to moderate.
Quality sits below the engine's investability floor at 2.2 versus a 4.0 minimum, driven by the absence of a competitive moat and a weak Piotroski F-score of 3 out of 9.
↓DeterioratingQuality breakdown
- Expectation
- Quality should rise above the 4.0 floor as fundamentals stabilize over the next 12 months.
CounterA current ratio of 6.1 signals solid near-term liquidity, providing a cushion despite persistent quality concerns.
The setup shows trend continuation with RSI at 54 and a bullish MACD, and momentum has cleared the engine's 4.5 gate at 4.6, though flagged as soft against the 5.5 confirmation level.
↓DeterioratingChart pattern detection
- Expectation
- Momentum should climb decisively above 5.5 to exit the soft/watch zone over the next 12 months.
CounterThe momentum notes flag falling on-balance volume and a flat 200-day moving-average slope, suggesting the 'continuation' may lack real conviction behind it.
The engine's own risk/reward gate failed, with an asymmetry ratio of just 0.55 against a 1.5 minimum, and a death-cross hard block also failed, driving position sizing to avoid despite the technical continuation setup.
↓DeterioratingEngine gate (failed)
- Expectation
- For the setup to become actionable, asymmetry needs to climb back above 1.5 and the death-cross block needs to clear over the next 12 months.
CounterThe modeled downside of 10.7% is not dramatically larger than the 5.9% upside, so the risk/reward gap, while failing the gate, is not extreme in absolute terms.
Per-dimension breakdown
Quality
1.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.0 |
| Gross margin | 0.0 |
| Op margin | 0.0 |
| Net margin | 0.0 |
| Current ratio | 4.7 |
| Moat | 4.0 |
| Piotroski F | 2.2 |
- ▸No competitive moat
- ▸Weak Piotroski F-Score: 2/9
- ▸Quality concerns
Growth
0.7/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 0.7 |
- ▸Declining revenue: -7%
Momentum
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 3.8 |
| OBV | 10.0 |
| MA position | 5.0 |
| Volume | 2.7 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.4 |
| Analyst rating | 6.4 |
| Price target | 7.0 |
- ▸LLM news sentiment: +0.48 (n=2)
- ▸Light analyst coverage (2.0) — signal dampened
Insider
4.7/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 4.4 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
3.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.5 |
| quality rank | 0.0 |
| growth rank | 0.3 |
- ▸Conservative debt levels
Technical
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 7.0 |
| support resistance | 6.5 |
| 52w position | 3.9 |
Risk (lower is worse)
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 4.0 |
| days to cover | 0.6 |
| volatility | 3.7 |
| put call | 10.0 |
| implied vol | 2.4 |
| max pain risk | 7.0 |
| beta | 6.1 |
| debt equity | 9.1 |
- ▸High IV: 65%
Catalyst
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| dividend safety | 7.7 |
| news activity | 6.0 |
- ▸Earnings concerns: 1B/3M
- ▸Dividend aristocrat: 4.1% yield
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (6)
- MOMENTUM:5.4>=4.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:85d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.4=NEGATIVE
Warning (2)
- MOMENTUM:5.4<5.5 (soft — BUY_NOW allowed but watch)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.38
Upside
-2.7%
Downside
7.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeInst Constrain — Small cap ($0.6B) below institutional reach
SuitabilityAggressive — MCap $0.6B<$5B
Investment implication
The SELL_IF_HOLDING verdict reflects the ASYMMETRY gate's -0.4=NEGATIVE outcome against Value at 9.3 and asymmetric R:R of -0.38.
The strongest dimensions are Value at 9.3, Sentiment at 6.9, and Technical at 5.8; the weakest are Growth at 0.7, Quality at 1.4, and Peer rank at 3.7. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of -0.38 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Cheap On Price To Sales
Trip ifValue score falls below 5.0 from the current 7.3 as the cheap pricing fails to re-rate.
- P2Trend Continuation With Soft Momentum
Trip ifMomentum score falls below 4.5, breaching the engine's gate and ending the trend-continuation setup.
- P3Failed Risk Reward And Death Cross Block
Trip ifAsymmetry ratio rises above 1.5, clearing the engine's gate from the current 0.55 reading.
- P4Persistent Deepening Earnings Misses
Trip ifThe company beats or meets earnings estimates in the next 2 consecutive reported quarters, with average surprise rising above -20%.
- P5Quality Below Investability Floor
Trip ifQuality score rises above 4.0 from the current 2.2.