Value
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 5.8 |
| P/S | 9.1 |
| EV/EBITDA | 4.9 |
| Fwd P/E | 8.2 |
| PEG | 10.0 |
| Analyst target | 5.0 |
- ▸Forward P/E: 14.4x
- ▸PEG: 0.26
- ▸Attractively valued
DORM · Why this verdict
Why Dorman Products (DORM) 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 score6.2/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Dorman Products screens attractively valued at a forward P/E of 13.5x and a PEG of 0.26, with four consecutive earnings beats and approximately 21% analyst upside from current price, but a confirmed price downtrend with a death cross hard block and a critical free cash flow quality shortfall limit the conviction for new entry.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company has beaten analyst estimates in each of the last four quarters, with an average positive surprise of approximately 5.7% — a steady rather than spectacular track record that reflects disciplined cost control and a management team that sets achievable targets. Earnings | Earnings per share continues to beat consensus in at least 3 of the next 4 quarterly reports. | ↓Deteriorating |
| CounterBeat magnitudes range from roughly 0.9% to 14.6%, with the most recent quarter barely clearing consensus at under 1%, suggesting the guidance cushion may be narrowing toward a level where a miss becomes more probable. | ||
A forward P/E of 13.5x and a PEG of 0.26 place the stock in attractively valued territory, and analysts project approximately 21% upside from current levels — a significant gap between current price and perceived fair value that historically narrows over a 12-month horizon as earnings evidence accumulates. Value | Price closes at least 10% of the gap to the analyst target of $132.46 within 12 months, reflecting the discount beginning to compress. | ↑Improving |
| CounterA confirmed price downtrend, declining moving average, and a death cross have historically kept technically pressured stocks range-bound or lower regardless of valuation, and a cheap multiple can remain cheap or get cheaper if technical selling pressure persists. | ||
Free cash flow of approximately 3% relative to net income is flagged as an earnings quality concern, indicating that while reported earnings appear solid, those earnings are not converting into cash at a rate that supports capital allocation, dividend safety, or balance sheet strengthening. Quality | Free cash flow relative to net income improves above 50% for 2 consecutive quarters, demonstrating a meaningful recovery in cash conversion quality. | →Stable |
| CounterA low FCF-to-earnings ratio can reflect temporary working capital build or capital expenditure timing rather than a structural problem, and if those investments drive future earnings growth, the current conversion shortfall may prove transient. | ||
The stock is trading below its 200-day moving average while that average declines at roughly 1.9% per month, and a death cross has triggered the most severe technical block applied by the framework — a configuration that historically precedes extended drawdown periods before any sustainable recovery. Engine gate (failed) | The death cross resolves into a golden cross within 12 months and price reclaims the 200-day moving average, confirming a technical trend reversal. | →Stable |
| CounterAttractive valuation, consistent earnings beats, and strong analyst sentiment create fundamental support that can limit or compress the technical downside, and the low put/call ratio of 0.625 suggests options traders are not heavily positioned for further declines. | ||
The company has beaten analyst estimates in each of the last four quarters, with an average positive surprise of approximately 5.7% — a steady rather than spectacular track record that reflects disciplined cost control and a management team that sets achievable targets.
↓DeterioratingEarnings
- Expectation
- Earnings per share continues to beat consensus in at least 3 of the next 4 quarterly reports.
CounterBeat magnitudes range from roughly 0.9% to 14.6%, with the most recent quarter barely clearing consensus at under 1%, suggesting the guidance cushion may be narrowing toward a level where a miss becomes more probable.
A forward P/E of 13.5x and a PEG of 0.26 place the stock in attractively valued territory, and analysts project approximately 21% upside from current levels — a significant gap between current price and perceived fair value that historically narrows over a 12-month horizon as earnings evidence accumulates.
↑ImprovingValue
- Expectation
- Price closes at least 10% of the gap to the analyst target of $132.46 within 12 months, reflecting the discount beginning to compress.
CounterA confirmed price downtrend, declining moving average, and a death cross have historically kept technically pressured stocks range-bound or lower regardless of valuation, and a cheap multiple can remain cheap or get cheaper if technical selling pressure persists.
Free cash flow of approximately 3% relative to net income is flagged as an earnings quality concern, indicating that while reported earnings appear solid, those earnings are not converting into cash at a rate that supports capital allocation, dividend safety, or balance sheet strengthening.
→StableQuality
- Expectation
- Free cash flow relative to net income improves above 50% for 2 consecutive quarters, demonstrating a meaningful recovery in cash conversion quality.
CounterA low FCF-to-earnings ratio can reflect temporary working capital build or capital expenditure timing rather than a structural problem, and if those investments drive future earnings growth, the current conversion shortfall may prove transient.
The stock is trading below its 200-day moving average while that average declines at roughly 1.9% per month, and a death cross has triggered the most severe technical block applied by the framework — a configuration that historically precedes extended drawdown periods before any sustainable recovery.
→StableEngine gate (failed)
- Expectation
- The death cross resolves into a golden cross within 12 months and price reclaims the 200-day moving average, confirming a technical trend reversal.
CounterAttractive valuation, consistent earnings beats, and strong analyst sentiment create fundamental support that can limit or compress the technical downside, and the low put/call ratio of 0.625 suggests options traders are not heavily positioned for further declines.
Per-dimension breakdown
Quality
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.5 |
| ROA | 5.7 |
| Gross margin | 4.2 |
| Op margin | 5.4 |
| Net margin | 4.4 |
| Current ratio | 9.7 |
| FCF quality | 0.3 |
| Moat | 5.8 |
| Piotroski F | 8.9 |
- ▸Earnings quality RED FLAG: 3% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
6.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.6 |
| EPS growth | 10.0 |
Momentum
2.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 7.5 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 5.0 |
| Volume | 0.0 |
- ▸Uptrend pullback (RSI 40) - buy opportunity
- ▸Volume distribution (falling OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
7.8/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 8.0 |
| Analyst rating | 7.9 |
| Price target | 7.4 |
- ▸LLM news sentiment: +0.60 (n=1)
- ▸Light analyst coverage (8.0) — signal dampened
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
5.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.8 |
| quality rank | 7.3 |
| growth rank | 3.1 |
Technical
7.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 9.9 |
| support resistance | 9.0 |
| 52w position | 5.7 |
| gap | 6.0 |
Risk (lower is worse)
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.9 |
| days to cover | 5.7 |
| volatility | 4.1 |
| put call | 10.0 |
| implied vol | 5.4 |
| max pain risk | 5.0 |
| beta | 7.2 |
| debt equity | 8.5 |
- ▸Concentration risks: 2 MED (10-K Item 1A)
Catalyst
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 5.4 |
| news activity | 5.0 |
- ▸Perfect beat streak: 4Q
- ▸Earnings in 11 days
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more. | News modifier +2 (HOLD_IF_HOLDING → STRONG_BUY_WAIT).
Engine technical detail
verdict_path:
L4:PATH_F_HOLD|L3:NEWS_MOD=+2|ENTRY_STICKY:WITHIN_BANDPassed (5)
- INSIDER:OK
- 8K:CLEAN
- NEWS_BOOST:ANALYST:0.60
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:2.7<4.5
- ASYMMETRY:0.3<1.5@spot
Warning (1)
- EARNINGS_PROXIMITY:11d<=14d (soft)
Reward-to-Risk
0.33
Upside
+2.2%
Downside
6.7%
Sizing output
STARTER
Setup— — No clear chart pattern; technical signals are mixed
EdgeCatalyst-Driven — Earnings in 11d with 4/4 beat streak
SuitabilityAggressive — MCap $4.0B<$5B
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: INSIDER:OK. Top dim: Sentiment at 7.8; weakest: Momentum at 2.7. No conviction either direction.
The strongest dimensions are Sentiment at 7.8, Technical at 7.7, and Value at 7.3; the weakest are Momentum at 2.7, Peer rank at 5.2, and Quality at 5.4. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of 0.33 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Attractive Valuation Analyst Upside
Trip ifPrice falls below $118.30 (the stop-loss level) and holds there for 2 consecutive weeks, indicating the valuation discount has deepened rather than attracted buyers.
- P2Earnings Beat Consistency
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P3Fcf Quality Red Flag
Trip ifFree cash flow rises above 50% of net income for 2 consecutive quarters, indicating the earnings quality concern has resolved.
- P4Technical Downtrend Death Cross
Trip ifPrice rises above $132.46 (the analyst target) within 12 months, demonstrating the downtrend did not prevent the valuation discount from closing.