Value
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.2 |
| P/S | 5.8 |
| EV/EBITDA | 1.9 |
| Fwd P/E | 5.7 |
| PEG | 4.2 |
| Analyst target | 4.0 |
- ▸Forward P/E: 22.6x
- ▸PEG: 2.28
CSX · Why this verdict
Why CSX (CSX) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictBUY WAIT
Overall score5.5/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
CSX operates with strong operating leverage — 22% net margins and a Piotroski F-Score of 7 out of 9 — and has beaten earnings in 3 of the last 4 quarters, but the stock is trading above its take-profit resistance level with an unfavorable reward-to-risk ratio, leaving little justification for new capital at current prices.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Net margins of 22% and a Piotroski F-Score of 7 out of 9 reflect a financially sound franchise with above-average profitability for a capital-intensive railroad operation. Quality breakdown | Net margin holds above 20% and the Piotroski score stays at or above 7 over the next four quarters, confirming that the quality profile is durable. | →Stable |
| CounterFree cash flow converts at only 37% of net income — a red-flag level — suggesting a gap between reported earnings and actual cash generation; this may eventually require explanation through elevated capex or working capital moves that do not show up in the income statement. | ||
The company has beaten earnings estimates in 3 of the last 4 quarters — including the most recent print — with an average positive surprise of roughly 3.7%, demonstrating reliable delivery relative to street expectations. Earnings | Earnings beats continue in at least 2 of the next 3 quarters, with surprises averaging above 2% each period. | →Stable |
| CounterThe one miss in the window — a 5.3% shortfall — shows the company is not immune to estimate misses, and modest average surprises leave limited buffer if volume headwinds or cost pressures exceed expectations in any single quarter. | ||
The stock is trading above its take-profit resistance level of $47.07, and the reward-to-risk ratio has turned unfavorable, meaning the current price offers more downside than upside within the identified range. Price targets | Analyst consensus targets are raised above $52, creating more than 10% upside from the current $47.39 and restoring a positive risk/reward setup. | ↑Improving |
| CounterA golden cross formation with RSI at 57 and MACD in bullish territory indicates constructive underlying momentum; the stock may continue to trend higher and force analyst targets upward, turning the upside calculus more positive without a fundamental change. | ||
Free cash flow represents only 37% of net income, a level the analysis flags as a red flag for earnings quality, meaning a substantial portion of reported profits does not appear as cash available for reinvestment or shareholder returns. Quality breakdown | Free cash flow rises above 65% of net income for 2 consecutive quarters, demonstrating that the earnings-to-cash gap is not structural. | →Stable |
| CounterFor a railroad business with large recurring capital requirements, a lower-than-normal free-cash-flow-to-net-income ratio in any given period can reflect a cyclical maintenance or expansion cycle; if capital spending normalizes, conversion may recover without any underlying earnings quality concern. | ||
Net margins of 22% and a Piotroski F-Score of 7 out of 9 reflect a financially sound franchise with above-average profitability for a capital-intensive railroad operation.
→StableQuality breakdown
- Expectation
- Net margin holds above 20% and the Piotroski score stays at or above 7 over the next four quarters, confirming that the quality profile is durable.
CounterFree cash flow converts at only 37% of net income — a red-flag level — suggesting a gap between reported earnings and actual cash generation; this may eventually require explanation through elevated capex or working capital moves that do not show up in the income statement.
The company has beaten earnings estimates in 3 of the last 4 quarters — including the most recent print — with an average positive surprise of roughly 3.7%, demonstrating reliable delivery relative to street expectations.
→StableEarnings
- Expectation
- Earnings beats continue in at least 2 of the next 3 quarters, with surprises averaging above 2% each period.
CounterThe one miss in the window — a 5.3% shortfall — shows the company is not immune to estimate misses, and modest average surprises leave limited buffer if volume headwinds or cost pressures exceed expectations in any single quarter.
The stock is trading above its take-profit resistance level of $47.07, and the reward-to-risk ratio has turned unfavorable, meaning the current price offers more downside than upside within the identified range.
↑ImprovingPrice targets
- Expectation
- Analyst consensus targets are raised above $52, creating more than 10% upside from the current $47.39 and restoring a positive risk/reward setup.
CounterA golden cross formation with RSI at 57 and MACD in bullish territory indicates constructive underlying momentum; the stock may continue to trend higher and force analyst targets upward, turning the upside calculus more positive without a fundamental change.
Free cash flow represents only 37% of net income, a level the analysis flags as a red flag for earnings quality, meaning a substantial portion of reported profits does not appear as cash available for reinvestment or shareholder returns.
→StableQuality breakdown
- Expectation
- Free cash flow rises above 65% of net income for 2 consecutive quarters, demonstrating that the earnings-to-cash gap is not structural.
CounterFor a railroad business with large recurring capital requirements, a lower-than-normal free-cash-flow-to-net-income ratio in any given period can reflect a cyclical maintenance or expansion cycle; if capital spending normalizes, conversion may recover without any underlying earnings quality concern.
Per-dimension breakdown
Quality
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 7.9 |
| ROA | 4.7 |
| Gross margin | 5.4 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 3.9 |
| FCF quality | 3.0 |
| Moat | 5.6 |
| Piotroski F | 7.8 |
- ▸Strong margins: 22%
- ▸Earnings quality RED FLAG: 37% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
5.1/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.9 |
| EPS growth | 7.3 |
Momentum
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 7.7 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 3.7 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 4.5 |
| Analyst rating | 7.5 |
| Price target | 5.2 |
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Insider selling (low materiality) — $6,848,764 (0.007% of mkt cap)
- ▸Institutions accumulating
Peer rank
3.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.7 |
| quality rank | 6.1 |
| growth rank | 5.6 |
Technical
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.9 |
| support resistance | 2.6 |
| 52w position | 9.5 |
Risk (lower is worse)
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.9 |
| days to cover | 7.6 |
| volatility | 8.0 |
| put call | 10.0 |
| implied vol | 4.2 |
| max pain risk | 3.0 |
| beta | 6.2 |
| debt equity | 4.1 |
| news risk | 5.0 |
- ▸Above max pain $25
Catalyst
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 4.3 |
| dividend safety | 5.2 |
| news activity | 8.0 |
- ▸Strong earnings: 3B/1M
- ▸Earnings in 1 days
How the verdict was assembled
Engine trigger
Earnings in 1 day. Wait until post-earnings.
Engine technical detail
verdict_path:
L3:NEWS_BLOCK|ENTRY_STICKY:WITHIN_BANDPassed (5)
- MOMENTUM:5.3>=4.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:-1.1=NEGATIVE
- EARNINGS_PROXIMITY:1d<=7d
Warning (2)
- MOMENTUM:5.3<5.5 (soft — BUY_NOW allowed but watch)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-1.09
Upside
-8.7%
Downside
7.9%
Sizing output
STARTER
SetupBreakout — Golden cross, above all MAs, RSI 69, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
A recent news event triggered an L3 news-block on the verdict path. Trigger: Earnings in 1 day. Wait until post-earnings. The 10-dimension scores remain Insider at 7.3 (strongest), but ASYMMETRY:-1.1=NEGATIVE also fails — the news block is the proximate trigger, not the sole driver.
The strongest dimensions are Insider at 7.3, Quality at 6.5, and Risk (lower is worse) at 6.3; the weakest are Peer rank at 3.9, Value at 4.4, and Technical at 5.0. The V9 engine flagged 2 failed gates with 2 warnings, producing an asymmetric reward-to-risk of -1.09 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Consistent Earnings Beat Record
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P2Strong Operating Profitability
Trip ifNet margin falls below 18% for 2 consecutive quarters.
- P3Price Above Take Profit Target
Trip ifAnalyst consensus target rises above $52, creating more than 10% upside from the current $47.39 and restoring a positive reward/risk ratio.
- P4Weak Free Cash Conversion
Trip ifFree cash flow rises above 65% of net income for 2 consecutive quarters, falsifying the weak-conversion concern.