Value
7.3/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 9.8 |
| EV/EBITDA | 2.6 |
| Fwd P/E | 6.1 |
| PEG | 10.0 |
- ▸Forward P/E: 21.3x
- ▸PEG: 0.02
- ▸Attractively valued
DSGR · Why this verdict
Why Distribution Solutions Group, I (DSGR) 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 score5.0/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
DSGR offers an attractive valuation and strong cash conversion, but a confirmed technical downtrend, consecutive earnings misses, and a death-cross hard block currently override the fundamental case.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The stock screens as attractively valued (forward P/E 16.8x, PEG 0.01) alongside excellent cash conversion (710% FCF/NI) and a strong 8/9 Piotroski F-Score. Bull case | The value score should remain elevated while the Piotroski F-Score holds at 7 or above, confirming the quality-value combination persists. | →Stable |
| CounterA very low PEG ratio combined with weak recent price action can also indicate the market is pricing in expected earnings deterioration not yet reflected in trailing/forward estimates. | ||
The stock is in a confirmed downtrend, trading below its 200-day moving average with a negative MA slope (-2.3%/30d) and falling on-balance volume. Momentum breakdown | Price should reclaim the 200-day moving average and the MA slope should turn positive within the next two quarters. | ↑Improving |
| CounterAn attractive valuation combined with strong fundamentals can act as a floor that arrests the downtrend even without a clear technical reversal signal yet. | ||
The company has posted 2 consecutive earnings misses, with an average surprise of -17.8% over the trailing 4 quarters, raising execution concerns. Bear case | The company should return to at least an in-line or beat result in its next reporting quarter. | ↑Improving |
| CounterCash conversion remains excellent (710% FCF/NI) despite the EPS misses, suggesting the misses may stem from one-time items or accounting timing rather than deteriorating core cash generation. | ||
The engine has issued a hard block on this position due to a confirmed death cross pattern, overriding otherwise favorable valuation signals. Engine gate (failed) | The death cross should resolve, with price reclaiming key moving averages, within the next two quarters for the hard block to lift. | →Stable |
| CounterDeath-cross hard blocks are a mechanical technical rule and can persist even as fundamentals improve, potentially causing the engine to miss a valuation-driven recovery. | ||
The stock screens as attractively valued (forward P/E 16.8x, PEG 0.01) alongside excellent cash conversion (710% FCF/NI) and a strong 8/9 Piotroski F-Score.
→StableBull case
- Expectation
- The value score should remain elevated while the Piotroski F-Score holds at 7 or above, confirming the quality-value combination persists.
CounterA very low PEG ratio combined with weak recent price action can also indicate the market is pricing in expected earnings deterioration not yet reflected in trailing/forward estimates.
The stock is in a confirmed downtrend, trading below its 200-day moving average with a negative MA slope (-2.3%/30d) and falling on-balance volume.
↑ImprovingMomentum breakdown
- Expectation
- Price should reclaim the 200-day moving average and the MA slope should turn positive within the next two quarters.
CounterAn attractive valuation combined with strong fundamentals can act as a floor that arrests the downtrend even without a clear technical reversal signal yet.
The company has posted 2 consecutive earnings misses, with an average surprise of -17.8% over the trailing 4 quarters, raising execution concerns.
↑ImprovingBear case
- Expectation
- The company should return to at least an in-line or beat result in its next reporting quarter.
CounterCash conversion remains excellent (710% FCF/NI) despite the EPS misses, suggesting the misses may stem from one-time items or accounting timing rather than deteriorating core cash generation.
The engine has issued a hard block on this position due to a confirmed death cross pattern, overriding otherwise favorable valuation signals.
→StableEngine gate (failed)
- Expectation
- The death cross should resolve, with price reclaiming key moving averages, within the next two quarters for the hard block to lift.
CounterDeath-cross hard blocks are a mechanical technical rule and can persist even as fundamentals improve, potentially causing the engine to miss a valuation-driven recovery.
Per-dimension breakdown
Quality
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.3 |
| ROA | 1.8 |
| Gross margin | 2.6 |
| Op margin | 1.3 |
| Net margin | 0.1 |
| Current ratio | 8.9 |
| FCF quality | 10.0 |
| Moat | 3.8 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 710% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 8/9
Growth
3.5/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 3.5 |
Momentum
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.4 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 7.5 |
| Volume | 0.0 |
- ▸Overbought (RSI 92)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat/negative + RSI 92 (late-cycle distribution risk)
Sentiment
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 3.8 |
| Analyst rating | 5.0 |
| Price target | 5.2 |
Insider
6.5/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 7.5 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
2.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.4 |
| quality rank | 3.2 |
| growth rank | 3.3 |
Technical
3.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.3 |
| support resistance | 0.4 |
| 52w position | 9.8 |
Risk (lower is worse)
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.5 |
| days to cover | 2.7 |
| volatility | 6.4 |
| put call | 10.0 |
| implied vol | 5.4 |
| beta | 9.6 |
| debt equity | 4.4 |
| news risk | 6.0 |
Catalyst
3.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 1.1 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| news activity | 6.0 |
- ▸Earnings concerns: 1B/2M
- ▸Earnings in 13 days
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:6.2>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.9=NEGATIVE
Warning (1)
- EARNINGS_PROXIMITY:13d<=14d (soft)
Reward-to-Risk
-0.92
Upside
-13.8%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeInst Constrain — Small cap ($1.6B) below institutional reach
SuitabilityAggressive — MCap $1.6B<$5B
Investment implication
The F-path SELL output reflects an overall score of 4.5 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 7.3) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.9=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.92 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 7.3, Insider at 6.5, and Risk (lower is worse) at 6.5; the weakest are Peer rank at 2.9, Catalyst at 3.4, and Growth at 3.5. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.92 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Attractive Valuation Cash Conversion
Trip ifPiotroski F-Score falls below 5 out of 9 within the next two quarters.
- P2Confirmed Technical Downtrend
Trip ifMA slope stays below 0%/30d for 2 additional consecutive quarters.
- P3Consecutive Earnings Misses
Trip ifThe company's consecutive earnings-miss streak exceeds 2 quarters with a 3rd consecutive miss.
- P4Death Cross Hard Block
Trip ifMomentum score rises above 4.5 from the current 1.9, clearing the gate.