Value
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.5 |
| P/S | 6.6 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 5.8 |
| PEG | 4.9 |
| Analyst target | 6.0 |
- ▸Forward P/E: 22.1x
- ▸PEG: 1.64
EXPO · Why this verdict
Why Exponent (EXPO) 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 score5.3/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company earns a perfect Piotroski financial health score of 9 out of 9, maintains operating margins of 20% identified as best-in-class relative to peers, and generates a return on equity of 28% with a wide economic moat — a profile consistent with a business that compounds returns over time. Quality breakdown | Operating margins remain at or above 18% and the Piotroski score stays at 8 or 9 over the next 12 months, confirming quality is durable. | →Stable |
| CounterFree cash flow converts at 68% of net income — below the 100% threshold that would confirm full earnings quality — suggesting some reported profits are not immediately translating into cash, which can obscure slippage in the underlying business. | ||
With approximately 21% upside to the analyst price target against roughly 7% downside to the risk level, the risk/reward ratio stands at about 3-to-1 in favor of the buyer — well above the threshold typically required to justify a position in a high-quality franchise. Price targets | Price advances toward the analyst consensus target of approximately $69 within 12 months, capturing at least half of the available upside. | →Stable |
| CounterA favorable ratio is only as good as the underlying estimates; if the earnings trajectory continues to disappoint following the recent miss, the analyst price target will compress, shrinking or eliminating the apparent upside. | ||
The stock is in a confirmed technical downtrend, trading below its 200-day moving average with that average declining at approximately 2.5% per month — indicating that price has not simply pulled back within a rising trend but has entered a sustained period of selling pressure. Momentum breakdown | The 200-day moving average slope turns positive (above 0%/month) within six months, signaling that the trend has genuinely reversed. | →Stable |
| CounterThe MACD is improving and the RSI sits near 50, which historically marks the early stages of a recovery — the downtrend could resolve faster than the slope alone implies if demand catalysts emerge. | ||
The most recent quarter produced an earnings miss of approximately 3%, continuing a pattern of inconsistency — out of the past four quarters, the company beat twice, missed once, and came in exactly in line once, with an average earnings surprise of only about 1.2%. Earnings | The company beats consensus estimates by more than 3% in 2 of the next 3 quarterly reports, indicating a return to reliable outperformance. | →Stable |
| CounterA single miss after prior beats may reflect a timing issue rather than a trend; the underlying quality score and moat suggest the business can sustain margins even through slower periods. | ||
At a forward price-to-earnings of 20.7x and a PEG of 1.54, the stock carries a premium multiple that is not obviously supported by its current growth trajectory, making it sensitive to any further deceleration in earnings. Valuation breakdown | Earnings growth accelerates enough to drive the PEG below 1.0 within 12 months, validating the current premium. | →Stable |
| CounterFor a business with 20% margins, a perfect Piotroski score, and a wide moat, a modestly above-average multiple may be permanently justified; scarcity of high-quality franchises can sustain a premium for extended periods. | ||
The company earns a perfect Piotroski financial health score of 9 out of 9, maintains operating margins of 20% identified as best-in-class relative to peers, and generates a return on equity of 28% with a wide economic moat — a profile consistent with a business that compounds returns over time.
→StableQuality breakdown
- Expectation
- Operating margins remain at or above 18% and the Piotroski score stays at 8 or 9 over the next 12 months, confirming quality is durable.
CounterFree cash flow converts at 68% of net income — below the 100% threshold that would confirm full earnings quality — suggesting some reported profits are not immediately translating into cash, which can obscure slippage in the underlying business.
With approximately 21% upside to the analyst price target against roughly 7% downside to the risk level, the risk/reward ratio stands at about 3-to-1 in favor of the buyer — well above the threshold typically required to justify a position in a high-quality franchise.
→StablePrice targets
- Expectation
- Price advances toward the analyst consensus target of approximately $69 within 12 months, capturing at least half of the available upside.
CounterA favorable ratio is only as good as the underlying estimates; if the earnings trajectory continues to disappoint following the recent miss, the analyst price target will compress, shrinking or eliminating the apparent upside.
The stock is in a confirmed technical downtrend, trading below its 200-day moving average with that average declining at approximately 2.5% per month — indicating that price has not simply pulled back within a rising trend but has entered a sustained period of selling pressure.
→StableMomentum breakdown
- Expectation
- The 200-day moving average slope turns positive (above 0%/month) within six months, signaling that the trend has genuinely reversed.
CounterThe MACD is improving and the RSI sits near 50, which historically marks the early stages of a recovery — the downtrend could resolve faster than the slope alone implies if demand catalysts emerge.
The most recent quarter produced an earnings miss of approximately 3%, continuing a pattern of inconsistency — out of the past four quarters, the company beat twice, missed once, and came in exactly in line once, with an average earnings surprise of only about 1.2%.
→StableEarnings
- Expectation
- The company beats consensus estimates by more than 3% in 2 of the next 3 quarterly reports, indicating a return to reliable outperformance.
CounterA single miss after prior beats may reflect a timing issue rather than a trend; the underlying quality score and moat suggest the business can sustain margins even through slower periods.
At a forward price-to-earnings of 20.7x and a PEG of 1.54, the stock carries a premium multiple that is not obviously supported by its current growth trajectory, making it sensitive to any further deceleration in earnings.
→StableValuation breakdown
- Expectation
- Earnings growth accelerates enough to drive the PEG below 1.0 within 12 months, validating the current premium.
CounterFor a business with 20% margins, a perfect Piotroski score, and a wide moat, a modestly above-average multiple may be permanently justified; scarcity of high-quality franchises can sustain a premium for extended periods.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Exponent operates a high-quality engineering and consulting franchise with best-in-class margins of 20%, a perfect Piotroski financial health score, and a wide economic moat — yet the stock is in a confirmed technical downtrend and recently missed earnings estimates, creating tension between the quality of the business and near-term execution momentum. The risk/reward geometry of roughly 21% upside against 7% downside offers an asymmetric setup for investors who can absorb the trend headwind.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
7.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 9.3 |
| ROA | 6.7 |
| Gross margin | 3.0 |
| Op margin | 10.0 |
| Net margin | 9.9 |
| Current ratio | 8.2 |
| FCF quality | 5.2 |
| Moat | 8.2 |
| Piotroski F | 10.0 |
- ▸Excellent ROE: 28%
- ▸Strong margins: 20%
- ▸Earnings quality warning: 68% FCF/NI
- ▸Wide economic moat
Growth
4.9/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.1 |
| EPS growth | 4.7 |
Momentum
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.1 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 1.7 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -2.6%/30d — confirmed downtrend
Sentiment
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 8.8 |
| erm sentiment | 5.0 |
- ▸Analyst upside: 34%
Insider
3.9/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 5.1 |
- ▸Modest insider selling — $1,217,680 (0.041% of mkt cap)
Peer rank
3.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.8 |
| quality rank | 8.3 |
| growth rank | 3.1 |
- ▸Best-in-class margins
Technical
2.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.4 |
| support resistance | 0.6 |
| 52w position | 5.0 |
Risk (lower is worse)
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.3 |
| days to cover | 6.0 |
| volatility | 4.0 |
| put call | 10.0 |
| implied vol | 4.7 |
| beta | 8.7 |
| debt equity | 9.0 |
Catalyst
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 3.1 |
| dividend safety | 6.5 |
- ▸Dividend: 200.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:6.2>=5.5
- INSIDER:OK
- DEATH_CROSS:QUALITY_MOMENTUM_EXEMPT
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:26d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:1.2<1.5@spot
Warning (2)
- DEATH_CROSS:quality=7.8>=7.5+momentum=6.2>=5.0 exempted
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
1.22
Upside
+13.8%
Downside
11.3%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 69
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $3.0B<$5B
Investment implication
The F-path SELL output reflects an overall score of 5.3 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Quality at 7.8) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:1.2<1.5@spot) reinforce the read. Current asymmetry R:R is 1.22 — supplementary context, not the trigger for this path.
The strongest dimensions are Quality at 7.8, Risk (lower is worse) at 7.0, and Momentum at 6.2; the weakest are Technical at 2.0, Peer rank at 3.8, and Insider at 3.9. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of 1.22 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Best In Class Quality Franchise
Trip ifOperating margin falls below 17% for 2 consecutive quarters.
- P2Favorable Asymmetric Risk Reward
Trip ifAnalyst consensus price target is revised down by more than 15% from $69.42, reducing available upside to less than 5%.
- P3Confirmed Technical Downtrend
Trip ifThe 200-day moving average slope turns positive (above 0%/month) for 2 consecutive months.
- P4Uneven Recent Earnings Execution
Trip ifEPS beats consensus by more than 3% in 2 of the next 3 quarterly reports.
- P5Premium Valuation For Soft Growth
Trip ifPEG ratio falls below 1.0 driven by earnings estimate upgrades of more than 30% from current levels.