Value
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 3.2 |
| P/S | 5.8 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 3.3 |
| PEG | 3.8 |
| Analyst target | 5.0 |
- ▸Forward P/E: 33.4x
- ▸PEG: 2.77
CTAS · Why this verdict
Why Cintas (CTAS) 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 score5.4/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
A Piotroski F-Score of 9 out of 9, return on equity of 41%, 18% net margins, and a wide economic moat confirm this as a high-quality business with sustained returns — the kind of franchise that has historically compounded value across market cycles. Quality breakdown | Return on equity stays above 35% and net margin holds above 15% for the next four quarters, demonstrating that the quality profile is durable rather than a peak-cycle artifact. | →Stable |
| CounterFree cash flow converts at 78% of net income — an earnings-quality caution flag — suggesting that not all of the reported margin is flowing through to distributable cash, which may limit actual capital returns below what the income statement implies. | ||
With 9.4% upside to the $191.17 take-profit target and a reward-to-risk ratio of 1.68, the setup offers materially more return if the thesis plays out than downside if it does not, meeting the minimum bar for position-sizing consideration. Price targets | The stock reaches the $191.17 take-profit target within 12 months as the technical downtrend reverses and earnings continue to deliver at or above expectations. | →Stable |
| CounterThe 9.4% upside is predicated on the current analyst target holding; if the macro environment softens or earnings growth decelerates materially, targets may be trimmed, narrowing the upside and pushing the reward/risk below the minimum bar. | ||
At a forward P/E of 32.2x and a PEG of 2.78, the market is pricing in high-quality execution — but at this multiple, any slowdown in the low-single-digit earnings growth rate could trigger a re-rating that erases the 9.4% upside buffer without any change in the underlying business. Valuation breakdown | If the valuation concern resolves, the forward P/E compresses below 25x as earnings growth reaccelerates, confirming the premium is no longer disproportionate to the growth rate. | →Stable |
| CounterFranchises with wide economic moats and best-in-class financial metrics can sustain elevated multiples for extended periods if delivery remains consistent; a 32x multiple may reflect the scarcity of businesses at this quality level, making compression less likely absent an actual earnings shortfall. | ||
The stock is below its 200-day moving average, and that average's slope has declined 3.6% over the past 30 days — a confirmed technical downtrend — meaning the price recovery required to reach the $191.17 take-profit target requires first reversing the current intermediate-term trend. Momentum breakdown | The 200-day moving average slope turns positive over the next 60 days and price reclaims the $182 level, signaling a transition from downtrend to recovery. | →Stable |
| CounterMACD is improving and volume accumulation (rising OBV) are early leading indicators that can reverse before price crosses the 200-day average; the death cross was exempted based on quality and momentum scores, suggesting the downtrend may be closer to a trough than a continuation. | ||
A Piotroski F-Score of 9 out of 9, return on equity of 41%, 18% net margins, and a wide economic moat confirm this as a high-quality business with sustained returns — the kind of franchise that has historically compounded value across market cycles.
→StableQuality breakdown
- Expectation
- Return on equity stays above 35% and net margin holds above 15% for the next four quarters, demonstrating that the quality profile is durable rather than a peak-cycle artifact.
CounterFree cash flow converts at 78% of net income — an earnings-quality caution flag — suggesting that not all of the reported margin is flowing through to distributable cash, which may limit actual capital returns below what the income statement implies.
With 9.4% upside to the $191.17 take-profit target and a reward-to-risk ratio of 1.68, the setup offers materially more return if the thesis plays out than downside if it does not, meeting the minimum bar for position-sizing consideration.
→StablePrice targets
- Expectation
- The stock reaches the $191.17 take-profit target within 12 months as the technical downtrend reverses and earnings continue to deliver at or above expectations.
CounterThe 9.4% upside is predicated on the current analyst target holding; if the macro environment softens or earnings growth decelerates materially, targets may be trimmed, narrowing the upside and pushing the reward/risk below the minimum bar.
At a forward P/E of 32.2x and a PEG of 2.78, the market is pricing in high-quality execution — but at this multiple, any slowdown in the low-single-digit earnings growth rate could trigger a re-rating that erases the 9.4% upside buffer without any change in the underlying business.
→StableValuation breakdown
- Expectation
- If the valuation concern resolves, the forward P/E compresses below 25x as earnings growth reaccelerates, confirming the premium is no longer disproportionate to the growth rate.
CounterFranchises with wide economic moats and best-in-class financial metrics can sustain elevated multiples for extended periods if delivery remains consistent; a 32x multiple may reflect the scarcity of businesses at this quality level, making compression less likely absent an actual earnings shortfall.
The stock is below its 200-day moving average, and that average's slope has declined 3.6% over the past 30 days — a confirmed technical downtrend — meaning the price recovery required to reach the $191.17 take-profit target requires first reversing the current intermediate-term trend.
→StableMomentum breakdown
- Expectation
- The 200-day moving average slope turns positive over the next 60 days and price reclaims the $182 level, signaling a transition from downtrend to recovery.
CounterMACD is improving and volume accumulation (rising OBV) are early leading indicators that can reverse before price crosses the 200-day average; the death cross was exempted based on quality and momentum scores, suggesting the downtrend may be closer to a trough than a continuation.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Cintas is among the highest-quality businesses in the industrial sector — Piotroski F-Score of 9 out of 9, return on equity of 41%, 18% net margins, and a wide economic moat — with three straight earnings beats followed by an in-line quarter at the most recent print, and the reward-to-risk ratio of 1.68 with 9.4% upside to the take-profit target clears the minimum asymmetry bar; however, a confirmed technical downtrend and a forward multiple of 32.2x require patience before the setup fully resolves.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
8.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 10.0 |
| Gross margin | 6.1 |
| Op margin | 9.3 |
| Net margin | 8.8 |
| Current ratio | 6.9 |
| FCF quality | 5.9 |
| Moat | 7.6 |
| Piotroski F | 10.0 |
- ▸Excellent ROE: 41%
- ▸Strong margins: 18%
- ▸Earnings quality warning: 78% FCF/NI
- ▸Wide economic moat
Growth
4.3/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.7 |
| EPS growth | 3.9 |
Momentum
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 3.9 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -3.0%/30d — confirmed downtrend
Sentiment
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 3.5 |
| Analyst rating | 7.3 |
| Price target | 7.1 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Negligible insider selling — $834,607 (0.001% of mkt cap)
Peer rank
4.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.3 |
| quality rank | 8.2 |
| growth rank | 6.2 |
- ▸Superior ROE vs peers
Technical
3.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.3 |
| support resistance | 1.9 |
| 52w position | 6.0 |
Risk (lower is worse)
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.0 |
| days to cover | 5.1 |
| volatility | 5.9 |
| put call | 8.1 |
| implied vol | 5.3 |
| beta | 7.4 |
| debt equity | 7.3 |
| news risk | 6.0 |
Catalyst
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 3.0 |
| dividend safety | 6.5 |
| news activity | 5.0 |
- ▸Earnings in 11 days
- ▸Dividend: 99.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:6.9>=5.5
- INSIDER:OK
- DEATH_CROSS:QUALITY_MOMENTUM_EXEMPT
- 8K:CLEAN
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.5<1.5@spot
Warning (2)
- DEATH_CROSS:quality=8.3>=7.5+momentum=6.9>=5.0 exempted
- EARNINGS_PROXIMITY:11d<=14d (soft)
Reward-to-Risk
0.48
Upside
+3.6%
Downside
7.5%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 49
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.4 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Quality at 8.3) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:0.5<1.5@spot) reinforce the read. Current asymmetry R:R is 0.48 — supplementary context, not the trigger for this path.
The strongest dimensions are Quality at 8.3, Momentum at 6.9, and Risk (lower is worse) at 6.6; the weakest are Technical at 3.1, Value at 3.6, and Peer rank at 4.2. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of 0.48 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1High Quality Durable Franchise
Trip ifNet margin falls below 14% for 2 consecutive quarters.
- P2Favorable Risk Reward Setup
Trip ifAnalyst consensus target falls below $180, reducing upside to less than 3% from the current $174.74 and pushing the reward/risk ratio below 0.5.
- P3Premium Valuation Limits Cushion
Trip ifForward P/E compresses below 25x from the current 32.2x, falsifying the rich-valuation concern.
- P4Confirmed Technical Downtrend
Trip if200-day moving average slope turns positive and price holds above $182 for 30 consecutive trading days, confirming trend reversal.