Value
9.2/10data confidence 33%| Component | Sub-score |
|---|---|
| P/S | 9.4 |
| Analyst target | 9.0 |
- ▸Attractively valued
EVO · Why this verdict
Why Evotec (EVO) 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 |
|---|---|---|
Quality has breached the engine's minimum floor at 1.7 out of 10 against the 4.0 threshold, with zero ROE, ROA, gross margin, operating margin, and net margin, triggering an exit recommendation. Warnings | Quality score should remain below the 4.0 floor as long as core profitability metrics stay at zero. | →Stable |
| CounterEvotec is a contract drug-discovery and development partner whose revenue mix has been disrupted by partner-funded R&D pullbacks industry-wide, so near-term margin weakness may reflect a cyclical funding downturn rather than a structural loss of competitiveness. | ||
Evotec models a strongly favorable risk/reward asymmetry of 4.25, with 49.8% modeled upside to target against 11.7% downside to stop. Reward-to-risk math | The asymmetry ratio should remain above 1.5 as long as the gap between the analyst-target-derived take-profit and current price stays wide. | →Stable |
| CounterA stock trading below its 200-day moving average in a confirmed downtrend, with declining revenue of -22%, may have a modeled upside built on an analyst target that hasn't yet caught up to deteriorating fundamentals. | ||
Revenue is declining sharply, down 22% year-over-year per the engine's growth notes, driving a growth score of 0.0 out of 10, the weakest possible reading. Growth breakdown | Revenue growth should stabilize toward flat or positive as the decline moderates. | →Stable |
| CounterGrowth-dimension confidence is only 0.33, and a single-year revenue decline in contract research organizations often reflects lumpy milestone payments rather than a structural loss of business. | ||
Momentum shows a confirmed downtrend, with price below the 200-day moving average and a 30-day moving-average slope of -3.6%, though on-balance volume is rising and the setup is classified as recovering. Momentum breakdown | Momentum score should climb further above the 5.5 gate as the recovery matures, alongside a return above the 200-day moving average. | →Stable |
| CounterThe death-cross gate warning notes only that momentum is recovering, not yet resolved, so the confirmed downtrend could reassert itself before a genuine reversal takes hold. | ||
The engine identifies an institutional-constraint edge: at a $1.0B market cap, the stock sits below the reach of most institutional investors. Edge rationale | Market capitalization should remain below the $5B institutional-reach threshold, preserving the edge classification. | →Stable |
| CounterThis edge classification does not offset the avoid-sizing recommendation driven by the quality-floor breach, so the institutional-constraint framing alone provides limited support for a position. | ||
Quality has breached the engine's minimum floor at 1.7 out of 10 against the 4.0 threshold, with zero ROE, ROA, gross margin, operating margin, and net margin, triggering an exit recommendation.
→StableWarnings
- Expectation
- Quality score should remain below the 4.0 floor as long as core profitability metrics stay at zero.
CounterEvotec is a contract drug-discovery and development partner whose revenue mix has been disrupted by partner-funded R&D pullbacks industry-wide, so near-term margin weakness may reflect a cyclical funding downturn rather than a structural loss of competitiveness.
Evotec models a strongly favorable risk/reward asymmetry of 4.25, with 49.8% modeled upside to target against 11.7% downside to stop.
→StableReward-to-risk math
- Expectation
- The asymmetry ratio should remain above 1.5 as long as the gap between the analyst-target-derived take-profit and current price stays wide.
CounterA stock trading below its 200-day moving average in a confirmed downtrend, with declining revenue of -22%, may have a modeled upside built on an analyst target that hasn't yet caught up to deteriorating fundamentals.
Revenue is declining sharply, down 22% year-over-year per the engine's growth notes, driving a growth score of 0.0 out of 10, the weakest possible reading.
→StableGrowth breakdown
- Expectation
- Revenue growth should stabilize toward flat or positive as the decline moderates.
CounterGrowth-dimension confidence is only 0.33, and a single-year revenue decline in contract research organizations often reflects lumpy milestone payments rather than a structural loss of business.
Momentum shows a confirmed downtrend, with price below the 200-day moving average and a 30-day moving-average slope of -3.6%, though on-balance volume is rising and the setup is classified as recovering.
→StableMomentum breakdown
- Expectation
- Momentum score should climb further above the 5.5 gate as the recovery matures, alongside a return above the 200-day moving average.
CounterThe death-cross gate warning notes only that momentum is recovering, not yet resolved, so the confirmed downtrend could reassert itself before a genuine reversal takes hold.
The engine identifies an institutional-constraint edge: at a $1.0B market cap, the stock sits below the reach of most institutional investors.
→StableEdge rationale
- Expectation
- Market capitalization should remain below the $5B institutional-reach threshold, preserving the edge classification.
CounterThis edge classification does not offset the avoid-sizing recommendation driven by the quality-floor breach, so the institutional-constraint framing alone provides limited support for a position.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Evotec models a strongly favorable risk/reward asymmetry and an early technical recovery, but a quality-floor breach, sharply declining revenue, and a still-confirmed downtrend keep the setup on exit watch.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
1.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.0 |
| Gross margin | 0.0 |
| Op margin | 0.0 |
| Net margin | 0.0 |
| Current ratio | 6.0 |
| Moat | 3.2 |
| Piotroski F | 4.4 |
- ▸No competitive moat
- ▸Quality concerns
Growth
0.0/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 0.0 |
- ▸Declining revenue: -22%
Momentum
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 7.1 |
| OBV | 10.0 |
| MA position | 4.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -3.6%/30d — confirmed downtrend
Sentiment
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 9.9 |
| erm sentiment | 5.0 |
- ▸Analyst upside: 80%
Insider
5.0/10data confidence 50%Peer rank
2.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.4 |
| quality rank | 1.2 |
| growth rank | 0.2 |
Technical
2.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.5 |
| support resistance | 2.4 |
| 52w position | 2.8 |
Risk (lower is worse)
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 10.0 |
| days to cover | 8.9 |
| volatility | 4.6 |
| beta | 5.7 |
| debt equity | 7.7 |
Catalyst
3.3/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
- ▸Earnings concerns: 2B/2M
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (8)
- MOMENTUM:5.1>=4.5
- ASYMMETRY:5.4>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:39d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (2)
- MOMENTUM:5.1<5.5 (soft — BUY_NOW allowed but watch)
- DEATH_CROSS:momentum=5.1>=5.0 recovering
Reward-to-Risk
5.38
Upside
+53.0%
Downside
9.9%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 53
EdgeInst Constrain — Small cap ($1.0B) below institutional reach
SuitabilityAggressive — Beta 1.31>1.3, MCap $1.0B<$5B
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Value at 9.2 could not lift the engine output above the verdict floor.
The strongest dimensions are Value at 9.2, Risk (lower is worse) at 7.4, and Sentiment at 6.6; the weakest are Growth at 0.0, Quality at 1.7, and Peer rank at 2.2. The V9 engine cleared all gates with 2 warnings, producing an asymmetric reward-to-risk of 5.38 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Large Favorable Asymmetry
Trip ifAsymmetry ratio falls below 1.5 from the current 4.25.
- P2Quality Floor Breach
Trip ifQuality score rises above 4.0 from the current 1.7, clearing the floor.
- P3Declining Revenue
Trip ifRevenue growth falls below -35% YoY from the current -22%.
- P4Confirmed Downtrend Recovering
Trip ifMomentum score falls below 4.5 from the current 5.5, reversing the recovery.
- P5Small Cap Institutional Constraint
Trip ifMarket capitalization rises above $5B from the current $1.0B, eliminating the institutional-constraint edge.