Value
8.3/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 8.9 |
| Fwd P/E | 9.7 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 6.8x
- ▸PEG: 0.04
- ▸Attractively valued
FSK · Why this verdict
Why FS KKR Capital (FSK) 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 score5.1/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
A forward earnings multiple of approximately 7 times and a near-zero PEG ratio place the stock among the cheapest in its peer group on an earnings basis — a setup that historically signals mean-reversion potential if the underlying business stabilizes. Valuation breakdown | Forward earnings estimates stabilize or improve over the next four quarters without further downward revision, confirming the low multiple reflects a trough rather than ongoing impairment. | →Stable |
| CounterThe low multiple directly reflects four consecutive earnings misses, a 24% revenue decline, and no recognized competitive moat; the discount is pricing genuine impairment, and may persist or deepen if fundamentals continue to deteriorate. | ||
The company has missed earnings estimates in every one of the past four quarters, with an average shortfall of approximately 4.8%, establishing a consistent pattern of delivery below expectations that makes the stated valuation discount difficult to act on. Earnings | EPS surprise turns positive for two consecutive quarters, breaking the miss streak and signaling that the earnings cycle has bottomed and guidance has been reset to achievable levels. | →Stable |
| CounterThe average miss of approximately 4.8% is relatively modest in absolute terms; if this reflects a conservative guidance reset rather than secular deterioration, the pattern could reverse relatively quickly once the new baseline is established. | ||
Revenue has declined approximately 24% year-over-year — a material contraction suggesting the business is losing assets, clients, or income at a pace that is outrunning any valuation discount the stock already carries. Growth breakdown | Revenue growth turns positive for two consecutive quarters, signaling that the portfolio or income base has stabilized and the contraction phase has ended. | →Stable |
| CounterDespite the revenue decline, the business generates positive free cash flow at a 12% margin and a 5.6% yield at current prices — indicating the underlying cash engine remains intact even as the top line contracts. | ||
A death cross has triggered a hard technical block — the 50-day moving average has crossed below the 200-day — and the 200-day average itself is declining at approximately 6.9% per month, a configuration that historically precedes extended price weakness. Engine gate (failed) | Stock price rises above $12.90 — more than 18% above the current $10.93 — and holds for four consecutive weeks, confirming that the death cross has reversed and the downtrend has ended. | →Stable |
| CounterA recovering MACD and RSI in the mid-50s indicate near-term buying interest has not fully collapsed; the momentum score at the floor of the minimum pass threshold suggests the trend may be closer to stabilizing than the death cross alone implies. | ||
A forward earnings multiple of approximately 7 times and a near-zero PEG ratio place the stock among the cheapest in its peer group on an earnings basis — a setup that historically signals mean-reversion potential if the underlying business stabilizes.
→StableValuation breakdown
- Expectation
- Forward earnings estimates stabilize or improve over the next four quarters without further downward revision, confirming the low multiple reflects a trough rather than ongoing impairment.
CounterThe low multiple directly reflects four consecutive earnings misses, a 24% revenue decline, and no recognized competitive moat; the discount is pricing genuine impairment, and may persist or deepen if fundamentals continue to deteriorate.
The company has missed earnings estimates in every one of the past four quarters, with an average shortfall of approximately 4.8%, establishing a consistent pattern of delivery below expectations that makes the stated valuation discount difficult to act on.
→StableEarnings
- Expectation
- EPS surprise turns positive for two consecutive quarters, breaking the miss streak and signaling that the earnings cycle has bottomed and guidance has been reset to achievable levels.
CounterThe average miss of approximately 4.8% is relatively modest in absolute terms; if this reflects a conservative guidance reset rather than secular deterioration, the pattern could reverse relatively quickly once the new baseline is established.
Revenue has declined approximately 24% year-over-year — a material contraction suggesting the business is losing assets, clients, or income at a pace that is outrunning any valuation discount the stock already carries.
→StableGrowth breakdown
- Expectation
- Revenue growth turns positive for two consecutive quarters, signaling that the portfolio or income base has stabilized and the contraction phase has ended.
CounterDespite the revenue decline, the business generates positive free cash flow at a 12% margin and a 5.6% yield at current prices — indicating the underlying cash engine remains intact even as the top line contracts.
A death cross has triggered a hard technical block — the 50-day moving average has crossed below the 200-day — and the 200-day average itself is declining at approximately 6.9% per month, a configuration that historically precedes extended price weakness.
→StableEngine gate (failed)
- Expectation
- Stock price rises above $12.90 — more than 18% above the current $10.93 — and holds for four consecutive weeks, confirming that the death cross has reversed and the downtrend has ended.
CounterA recovering MACD and RSI in the mid-50s indicate near-term buying interest has not fully collapsed; the momentum score at the floor of the minimum pass threshold suggests the trend may be closer to stabilizing than the death cross alone implies.
TrendMatrix Research · core thesis
Engine thesis — one sentence
The asset manager screens attractively valued at roughly 7 times forward earnings, but four consecutive earnings misses, a 24% revenue decline, and a hard death-cross technical block combine to make the low valuation a reflection of deteriorating fundamentals rather than a contrarian opportunity.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 3.2 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 0.0 |
| Current ratio | 6.6 |
| FCF quality | 6.4 |
| Moat | 4.0 |
| Rule of 40 | 3.0 |
| Piotroski F | 6.7 |
- ▸FCF-positive despite GAAP loss (FCF margin 12%, FCF yield 5.9%)
- ▸No competitive moat
- ▸Rule of 40: -12 (fail)
Growth
5.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 0.0 |
| EPS growth | 10.0 |
- ▸Declining revenue: -24%
Momentum
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 7.1 |
| OBV | 1.5 |
| MA position | 4.0 |
| Volume | 4.8 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -5.7%/30d — confirmed downtrend
Sentiment
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 6.5 |
| erm sentiment | 5.0 |
Insider
5.1/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.2 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
2.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 9.2 |
| quality rank | 0.4 |
| growth rank | 0.5 |
Technical
3.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.3 |
| support resistance | 4.8 |
| 52w position | 1.0 |
Risk (lower is worse)
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.4 |
| days to cover | 5.4 |
| volatility | 5.8 |
| put call | 0.0 |
| implied vol | 5.9 |
| beta | 7.6 |
| debt equity | 4.2 |
- ▸Elevated put/call: 5.67
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
3.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 0.1 |
| dividend safety | 5.2 |
- ▸Earnings concerns: 0B/4M
- ▸Dividend: 2205.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:33d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:4.4<4.5
- ASYMMETRY:-0.8=NEGATIVE
- DEATH_CROSS:HARD_BLOCK
Warning (0)
none
Reward-to-Risk
-0.76
Upside
-4.1%
Downside
5.4%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 51
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Drawdown -45% (>40% off 52w high)
Investment implication
The F-path SELL output reflects an overall score of 4.6 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 8.3) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:4.4<4.5, ASYMMETRY:-0.8=NEGATIVE, DEATH_CROSS:HARD_BLOCK) reinforce the read. Current asymmetry R:R is -0.76 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 8.3, Sentiment at 5.5, and Risk (lower is worse) at 5.2; the weakest are Peer rank at 2.5, Catalyst at 3.1, and Technical at 3.4. The V9 engine flagged 3 failed gates, producing an asymmetric reward-to-risk of -0.76 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Low Valuation Potentially Attractive
Trip ifForward EPS consensus estimates are revised down more than 20% over the next 4 quarters, confirming ongoing impairment rather than a trough.
- P2Four Quarter Earnings Miss Streak
Trip ifEPS surprise exceeds 0% for 2 consecutive quarters.
- P3Revenue Declining Sharply
Trip ifRevenue growth rises above 0% year-over-year for 2 consecutive quarters, indicating the approximately 24% contraction in assets, clients, or income has stabilized and reversed.
- P4Death Cross Downtrend Hard Block
Trip ifStock price rises above $12.90 (more than 18% above current $10.93) and holds for 4 consecutive weeks.