Value
7.8/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 8.2 |
| P/S | 9.0 |
| EV/EBITDA | 5.6 |
| Fwd P/E | 9.7 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 6.8x
- ▸PEG: 0.06
- ▸Attractively valued
EVTC · Why this verdict
Why Evertec (EVTC) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score6.2/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Trading at a forward price-to-earnings ratio of 6.3x with a price/earnings-to-growth ratio of 0.06, the stock screens as attractively valued relative to its growth profile, suggesting the market may be underweighting the combination of low earnings multiple and a strong earnings growth trajectory. Valuation breakdown | The multiple expands toward sector peers over the next 12 months as the earnings growth profile is sustained and investor recognition of the discount increases. | →Stable |
| CounterThe confirmed technical downtrend below the 200-day moving average and elevated leverage suggest the market is discounting real execution and balance sheet risks rather than simply mispricing growth, and a below-target setup with unfavorable risk/reward limits the near-term catalyst for re-rating. | ||
A debt-to-equity ratio of approximately 1.5 introduces meaningful financial leverage that narrows the balance sheet's buffer against revenue softness and raises the cost of incremental capital, constraining the pace at which management can invest or return cash. Bear case | Debt-to-equity falls below 1.0 over the next 12 months as free cash flow is applied to debt reduction, improving the financial flexibility profile. | →Stable |
| CounterThe company's strong free cash flow quality and dividend coverage at 73% suggest the leverage level is being actively managed, and the current debt load may be sustainable if earnings growth continues at the recent pace. | ||
Despite improving near-term momentum indicators, the stock sits below its 200-day moving average with the long-term average declining at approximately 5% over 30 days — a confirmed downtrend that represents a meaningful headwind requiring sustained fundamental momentum to reverse. Momentum breakdown | The stock reclaims and holds above the 200-day moving average over the next 12 months, signaling a technical trend reversal that complements the fundamental case. | →Stable |
| CounterVolume is actively accumulating as shown by rising on-balance volume, and the MACD is improving from a recovery setup — these indicators often precede a price-level trend reversal by several weeks. | ||
Three earnings beats in the last four quarters with an average positive surprise of approximately 2% and a Piotroski F-Score of 8 out of 9 point to a well-run business that consistently delivers against expectations and maintains high financial statement integrity. Earnings | The beat streak extends to 4 of 5 quarters with positive average surprise maintained, confirming execution discipline persists through the current technical correction. | →Stable |
| CounterThe most recent quarter produced a miss at -2.25% below estimate, breaking the prior beat streak and potentially indicating that the underlying business is facing incremental headwinds not yet fully reflected in consensus models. | ||
Trading at a forward price-to-earnings ratio of 6.3x with a price/earnings-to-growth ratio of 0.06, the stock screens as attractively valued relative to its growth profile, suggesting the market may be underweighting the combination of low earnings multiple and a strong earnings growth trajectory.
→StableValuation breakdown
- Expectation
- The multiple expands toward sector peers over the next 12 months as the earnings growth profile is sustained and investor recognition of the discount increases.
CounterThe confirmed technical downtrend below the 200-day moving average and elevated leverage suggest the market is discounting real execution and balance sheet risks rather than simply mispricing growth, and a below-target setup with unfavorable risk/reward limits the near-term catalyst for re-rating.
A debt-to-equity ratio of approximately 1.5 introduces meaningful financial leverage that narrows the balance sheet's buffer against revenue softness and raises the cost of incremental capital, constraining the pace at which management can invest or return cash.
→StableBear case
- Expectation
- Debt-to-equity falls below 1.0 over the next 12 months as free cash flow is applied to debt reduction, improving the financial flexibility profile.
CounterThe company's strong free cash flow quality and dividend coverage at 73% suggest the leverage level is being actively managed, and the current debt load may be sustainable if earnings growth continues at the recent pace.
Despite improving near-term momentum indicators, the stock sits below its 200-day moving average with the long-term average declining at approximately 5% over 30 days — a confirmed downtrend that represents a meaningful headwind requiring sustained fundamental momentum to reverse.
→StableMomentum breakdown
- Expectation
- The stock reclaims and holds above the 200-day moving average over the next 12 months, signaling a technical trend reversal that complements the fundamental case.
CounterVolume is actively accumulating as shown by rising on-balance volume, and the MACD is improving from a recovery setup — these indicators often precede a price-level trend reversal by several weeks.
Three earnings beats in the last four quarters with an average positive surprise of approximately 2% and a Piotroski F-Score of 8 out of 9 point to a well-run business that consistently delivers against expectations and maintains high financial statement integrity.
→StableEarnings
- Expectation
- The beat streak extends to 4 of 5 quarters with positive average surprise maintained, confirming execution discipline persists through the current technical correction.
CounterThe most recent quarter produced a miss at -2.25% below estimate, breaking the prior beat streak and potentially indicating that the underlying business is facing incremental headwinds not yet fully reflected in consensus models.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Evertec offers an unusually cheap valuation — forward earnings at 6.3x with a price/earnings-to-growth ratio of 0.06 — backed by three recent earnings beats and strong profitability metrics, but the confirmed technical downtrend below the 200-day moving average and leverage at a debt-to-equity of 1.5 create genuine near-term risk that the discount may deepen before it closes.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 6.7 |
| ROA | 3.6 |
| Gross margin | 6.1 |
| Op margin | 7.2 |
| Net margin | 7.0 |
| Current ratio | 6.9 |
| FCF quality | 6.8 |
| Moat | 6.9 |
| Piotroski F | 8.9 |
- ▸Strong Piotroski F-Score: 8/9
Growth
7.3/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.6 |
| EPS growth | 10.0 |
Momentum
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.3 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 8.0 |
| Volume | 0.3 |
- ▸Overbought (RSI 74)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 5.7 |
| erm sentiment | 5.0 |
Insider
7.0/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 8.0 |
| insider conviction | 8.0 |
| holder change | 5.0 |
- ▸Notable insider buying — $2,251,251 (0.123% of mkt cap)
Peer rank
4.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.5 |
| quality rank | 6.9 |
| growth rank | 2.8 |
Technical
2.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.6 |
| support resistance | 0.3 |
| 52w position | 5.7 |
Risk (lower is worse)
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.3 |
| days to cover | 7.6 |
| volatility | 1.5 |
| put call | 0.0 |
| implied vol | 0.0 |
| beta | 8.7 |
| debt equity | 4.0 |
- ▸Elevated put/call: 2.50
- ▸High IV: 82%
Catalyst
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 3.5 |
| dividend safety | 7.0 |
- ▸Strong earnings: 3B/1M
- ▸Dividend: 67.0%
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (7)
- MOMENTUM:6.5>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:26d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.6=NEGATIVE
Warning (1)
- DEATH_CROSS:momentum=6.5>=5.0 recovering
Reward-to-Risk
-0.60
Upside
-9.0%
Downside
15.0%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 74
EdgeCatalyst-Driven — Earnings in 26d with 3/4 beat streak
SuitabilityAggressive — MCap $1.8B<$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: MOMENTUM:6.5>=5.5. Top dim: Value at 7.8; weakest: Technical at 2.2. No conviction either direction.
The strongest dimensions are Value at 7.8, Growth at 7.3, and Insider at 7.0; the weakest are Technical at 2.2, Risk (lower is worse) at 4.2, and Peer rank at 4.3. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.60 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Cheap Valuation Growth Combination
Trip ifEPS growth falls below 0% for 2 consecutive quarters, eroding the case for the near-zero price/earnings-to-growth ratio.
- P2Confirmed Downtrend Technical Risk
Trip ifStock holds above the 200-day moving average for 5 consecutive weeks, confirming a trend reversal.
- P3Leverage Balance Sheet Constraint
Trip ifDebt-to-equity ratio falls below 1.0 for 2 consecutive quarters.
- P4Consistent Earnings Execution
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.