Value
6.5/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 0.0 |
| P/S | 9.8 |
| EV/EBITDA | 2.8 |
| Fwd P/E | 6.2 |
| PEG | 10.0 |
- ▸Forward P/E: 20.8x
- ▸PEG: 0.02
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 score5.5/10
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. | ↑Improving |
| 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. | ↓Deteriorating |
| 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. | ↓Deteriorating |
| 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. | ↑Improving |
| 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.
↑ImprovingBull 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.
↓DeterioratingMomentum 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.
↓DeterioratingBear 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.
↑ImprovingEngine 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
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.5 |
| ROA | 1.9 |
| Gross margin | 2.5 |
| Op margin | 2.2 |
| Net margin | 0.2 |
| Current ratio | 8.6 |
| FCF quality | 10.0 |
| Moat | 4.9 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 429% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 8/9
Growth
7.6/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.2 |
| EPS growth | 10.0 |
Momentum
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.8 |
| MACD | 0.7 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Overbought (RSI 84)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.0 |
| Analyst rating | 5.0 |
| Price target | 5.0 |
- ▸LLM news sentiment: +0.40 (n=1)
Insider
6.8/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 8.4 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
3.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.7 |
| quality rank | 2.7 |
| growth rank | 6.7 |
Technical
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.9 |
| support resistance | 0.1 |
| 52w position | 9.9 |
Risk (lower is worse)
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.5 |
| days to cover | 1.9 |
| volatility | 10.0 |
| put call | 10.0 |
| implied vol | 0.0 |
| beta | 9.7 |
| debt equity | 4.4 |
- ▸High IV: 82%
Catalyst
2.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 1.0 |
| earnings history | 1.1 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| news activity | 5.0 |
- ▸Estimates down -43.8% (30d)
- ▸Earnings concerns: 1B/2M
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:4.7>=4.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:78d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.0=NEGATIVE
Warning (1)
- MOMENTUM:4.7<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
-0.99
Upside
-14.9%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $1.6B<$5B
Investment implication
The F-path SELL output reflects an overall score of 5.0 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Growth at 7.6) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-1.0=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.99 — supplementary context, not the trigger for this path.
The strongest dimensions are Growth at 7.6, Insider at 6.8, and Value at 6.5; the weakest are Catalyst at 2.4, Peer rank at 3.5, and Quality at 4.4. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.99 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.