Value
5.3/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 10.0 |
| P/S | 10.0 |
| EV/EBITDA | 7.1 |
| Fwd P/E | 2.7 |
| Analyst target | 3.0 |
- ▸Forward P/E: 41.1x
CYH · Why this verdict
Why Community Health Systems (CYH) 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 score4.2/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Momentum score is strong at 8.4, driven by an overbought RSI of 82, rising on-balance volume, price above the 200-day moving average, and a 2.7x average-volume surge on the latest up move. Momentum breakdown | Momentum score should remain elevated above 7 and price should hold above its 200-day moving average over the next 12 months if the surge reflects a sustained trend. | →Stable |
| CounterAn RSI of 82 is a classic overbought reading that historically precedes short-term pullbacks, and the volume surge could reflect a speculative squeeze rather than durable buying interest. | ||
The stock shows a cyclical valuation trap with a forward P/E of 41.1x against a much lower trailing multiple, per the V8 flag, alongside a target-reached warning leaving -26.1% modeled upside. Valuation breakdown | If confirmed, forward P/E should compress toward a more normal range and the upside gap should narrow toward 0% over the next 12 months as consensus estimates catch down. | →Stable |
| CounterThe earnings compression implied by the 41.1x forward multiple could reflect one-off items; two of the last four quarters beat estimates by 546.71% and 51.36%, suggesting earnings power may already be inflecting higher rather than being trapped. | ||
Quality score of 4.0 sits exactly at the engine's quality floor, triggering an exit action note, alongside an earnings-quality warning of 73% FCF/NI conversion and no competitive moat. Quality breakdown | Quality score should rise clearly above the 4.0 floor toward 5.0 or higher over the next 12 months if the underlying business is stabilizing rather than deteriorating. | →Stable |
| CounterThe quality floor breach is right at the threshold (4.0 vs 4.0), a marginal reading that could reverse with a single quarter of margin improvement, and 73% FCF/NI conversion is not unusually poor for a hospital operator's working-capital cycle. | ||
The V9 asymmetry gate failed at -1.7 (negative), and options positioning shows an elevated put/call ratio of 2.10 with high implied volatility of 105%, flagging poor risk/reward and hedging demand. Reward-to-risk math | Asymmetry ratio should turn positive above 0 and the put/call ratio should decline toward a more neutral level below 1.0 over the next 12 months if downside risk eases. | →Stable |
| CounterElevated put/call ratios can also reflect institutional hedging of an existing long position rather than outright bearish speculation, and a -1.7 asymmetry ratio is a point-in-time technical read that can flip quickly with price action. | ||
The stock ranks attractively on value versus peers, with a value_rank of 9.66 out of 10 tied to a low trailing P/E even as forward multiples look stretched. Value rank | Value peer rank should remain elevated above 7 over the next 12 months if the discount versus peers persists or widens further in the company's favor. | →Stable |
| CounterA high value_rank based on trailing metrics can be a value trap if forward earnings deteriorate as implied by the 41.1x forward P/E, meaning the peer-relative discount may not be real. | ||
Momentum score is strong at 8.4, driven by an overbought RSI of 82, rising on-balance volume, price above the 200-day moving average, and a 2.7x average-volume surge on the latest up move.
→StableMomentum breakdown
- Expectation
- Momentum score should remain elevated above 7 and price should hold above its 200-day moving average over the next 12 months if the surge reflects a sustained trend.
CounterAn RSI of 82 is a classic overbought reading that historically precedes short-term pullbacks, and the volume surge could reflect a speculative squeeze rather than durable buying interest.
The stock shows a cyclical valuation trap with a forward P/E of 41.1x against a much lower trailing multiple, per the V8 flag, alongside a target-reached warning leaving -26.1% modeled upside.
→StableValuation breakdown
- Expectation
- If confirmed, forward P/E should compress toward a more normal range and the upside gap should narrow toward 0% over the next 12 months as consensus estimates catch down.
CounterThe earnings compression implied by the 41.1x forward multiple could reflect one-off items; two of the last four quarters beat estimates by 546.71% and 51.36%, suggesting earnings power may already be inflecting higher rather than being trapped.
Quality score of 4.0 sits exactly at the engine's quality floor, triggering an exit action note, alongside an earnings-quality warning of 73% FCF/NI conversion and no competitive moat.
→StableQuality breakdown
- Expectation
- Quality score should rise clearly above the 4.0 floor toward 5.0 or higher over the next 12 months if the underlying business is stabilizing rather than deteriorating.
CounterThe quality floor breach is right at the threshold (4.0 vs 4.0), a marginal reading that could reverse with a single quarter of margin improvement, and 73% FCF/NI conversion is not unusually poor for a hospital operator's working-capital cycle.
The V9 asymmetry gate failed at -1.7 (negative), and options positioning shows an elevated put/call ratio of 2.10 with high implied volatility of 105%, flagging poor risk/reward and hedging demand.
→StableReward-to-risk math
- Expectation
- Asymmetry ratio should turn positive above 0 and the put/call ratio should decline toward a more neutral level below 1.0 over the next 12 months if downside risk eases.
CounterElevated put/call ratios can also reflect institutional hedging of an existing long position rather than outright bearish speculation, and a -1.7 asymmetry ratio is a point-in-time technical read that can flip quickly with price action.
The stock ranks attractively on value versus peers, with a value_rank of 9.66 out of 10 tied to a low trailing P/E even as forward multiples look stretched.
→StableValue rank
- Expectation
- Value peer rank should remain elevated above 7 over the next 12 months if the discount versus peers persists or widens further in the company's favor.
CounterA high value_rank based on trailing metrics can be a value trap if forward earnings deteriorate as implied by the 41.1x forward P/E, meaning the peer-relative discount may not be real.
TrendMatrix Research · core thesis
Engine thesis — one sentence
CYH shows a strong momentum surge and a peer-relative value discount, but the engine flags a cyclical valuation trap, a quality score right at its exit floor, and negative options-implied asymmetry that together argue for caution.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROA | 3.1 |
| Gross margin | 4.3 |
| Op margin | 2.6 |
| Net margin | 1.9 |
| Current ratio | 5.4 |
| FCF quality | 5.5 |
| Moat | 4.5 |
| Piotroski F | 4.4 |
- ▸Earnings quality warning: 73% FCF/NI
- ▸No competitive moat
Growth
1.0/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 1.0 |
- ▸Declining revenue: -6%
Momentum
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 7.9 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 3.9 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 3.6 |
| erm sentiment | 5.0 |
Insider
5.0/10data confidence 50%Peer rank
5.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 9.7 |
| quality rank | 4.6 |
| growth rank | 0.9 |
- ▸Attractive P/E vs peers
Technical
3.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.6 |
| support resistance | 2.0 |
| 52w position | 6.6 |
Risk (lower is worse)
2.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.2 |
| days to cover | 1.2 |
| volatility | 3.1 |
| put call | 0.0 |
| implied vol | 0.0 |
| max pain risk | 3.0 |
| beta | 4.0 |
- ▸Elevated put/call: 4.20
- ▸High IV: 88%
- ▸Above max pain $1
Catalyst
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (7)
- MOMENTUM:7.2>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:17d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.4=NEGATIVE
Warning (0)
none
Reward-to-Risk
-1.44
Upside
-21.6%
Downside
15.0%
Sizing output
AVOID
SetupMomentum Cont — Trend continuation, RSI 69, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.81>1.3, MCap $0.5B<$5B
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Momentum at 7.2 could not lift the engine output above the verdict floor. Failed gate signal: ASYMMETRY:-1.4=NEGATIVE.
The strongest dimensions are Momentum at 7.2, Value at 5.3, and Insider at 5.0; the weakest are Growth at 1.0, Risk (lower is worse) at 2.4, and Technical at 3.1. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -1.44 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Overbought Momentum Surge
Trip ifRSI falls below 50 (from the current overbought 82 reading) and price closes below its 200-day moving average.
- P2Cyclical Valuation Trap
Trip ifForward P/E falls below 20x (from the current 41.1x) while price stays above $3.50, showing the multiple compressed without a price decline.
- P3Quality Below Floor Exit Signal
Trip ifQuality score rises above 5.0, from the current 4.0, moving clearly above the engine's exit threshold.
- P4Negative Asymmetry Elevated Options Risk
Trip ifAsymmetry ratio rises above 0 (from -1.7) and put/call ratio falls below 1.0 (from 2.10).
- P5Attractive Relative Value Vs Peers
Trip ifValue peer rank falls below 5.0, down from the current 9.66, erasing the relative-value discount versus peers.