Value
6.2/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 9.5 |
| EV/EBITDA | 2.6 |
| p ocf | 7.4 |
| Analyst target | 6.0 |
- ▸P/OCF: 13.6x (FFO proxy — REITs gated off P/E)
FSV · Why this verdict
Why FirstService (FSV) 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 |
|---|---|---|
Free cash flow is running at 213% of net income — an unusually high conversion rate — and the stock is priced at 13.4 times operating cash flow, making the valuation attractive relative to the cash the business actually generates. Quality | Free cash flow conversion stays above 150% of net income and the operating cash flow multiple remains below 18 times over the next four quarters. | →Stable |
| CounterBusiness quality scores below the sector average and the bundle flags no competitive moat, meaning the high cash conversion may not be durable and the attractive multiple may be justified by structural limitations rather than mispricing. | ||
All four of the last four quarters produced earnings beats, including a 16.94% positive surprise in the oldest period and a 7.33% beat in the most recent quarter — a track record of consistently outperforming consensus that supports a reliable-execution premium. Earnings | Earnings beats continue in at least three of the next four quarters, sustaining the pattern of positive surprises. | →Stable |
| CounterThe average beat magnitude is declining from the oldest period's 16.94% to the most recent 7.33%, suggesting the consensus bar has been progressively raised and the room to surprise positively is narrowing. | ||
The stock is in a confirmed downtrend — the 200-day moving average is declining at 5.3% per month, volume is distributing (a falling on-balance volume trend), and a death cross has triggered a hard block on new entry — all pointing to sustained near-term price pressure. Momentum | The downtrend resolves: the 200-day moving average slope turns positive and the stock price reclaims and holds above $155 for 2 consecutive months. | →Stable |
| CounterThe MACD is improving and the RSI stands at 67, indicating internal buying pressure that may be early-stage evidence of a technical recovery even before the moving average structure confirms. | ||
Revenue growth is soft, and the bear case explicitly cites weak growth as a headwind — meaning even if the business executes reliably and converts cash well, the multiple expansion needed for meaningful upside may be limited without an acceleration in the top line. Bear case | Revenue growth accelerates above 15% year over year for 2 consecutive quarters, demonstrating a re-acceleration that could justify multiple expansion. | →Stable |
| CounterA business generating free cash flow at 213% of net income can compound intrinsic value even at moderate growth rates; slow revenue growth is less damaging when cash return on invested capital is high. | ||
Free cash flow is running at 213% of net income — an unusually high conversion rate — and the stock is priced at 13.4 times operating cash flow, making the valuation attractive relative to the cash the business actually generates.
→StableQuality
- Expectation
- Free cash flow conversion stays above 150% of net income and the operating cash flow multiple remains below 18 times over the next four quarters.
CounterBusiness quality scores below the sector average and the bundle flags no competitive moat, meaning the high cash conversion may not be durable and the attractive multiple may be justified by structural limitations rather than mispricing.
All four of the last four quarters produced earnings beats, including a 16.94% positive surprise in the oldest period and a 7.33% beat in the most recent quarter — a track record of consistently outperforming consensus that supports a reliable-execution premium.
→StableEarnings
- Expectation
- Earnings beats continue in at least three of the next four quarters, sustaining the pattern of positive surprises.
CounterThe average beat magnitude is declining from the oldest period's 16.94% to the most recent 7.33%, suggesting the consensus bar has been progressively raised and the room to surprise positively is narrowing.
The stock is in a confirmed downtrend — the 200-day moving average is declining at 5.3% per month, volume is distributing (a falling on-balance volume trend), and a death cross has triggered a hard block on new entry — all pointing to sustained near-term price pressure.
→StableMomentum
- Expectation
- The downtrend resolves: the 200-day moving average slope turns positive and the stock price reclaims and holds above $155 for 2 consecutive months.
CounterThe MACD is improving and the RSI stands at 67, indicating internal buying pressure that may be early-stage evidence of a technical recovery even before the moving average structure confirms.
Revenue growth is soft, and the bear case explicitly cites weak growth as a headwind — meaning even if the business executes reliably and converts cash well, the multiple expansion needed for meaningful upside may be limited without an acceleration in the top line.
→StableBear case
- Expectation
- Revenue growth accelerates above 15% year over year for 2 consecutive quarters, demonstrating a re-acceleration that could justify multiple expansion.
CounterA business generating free cash flow at 213% of net income can compound intrinsic value even at moderate growth rates; slow revenue growth is less damaging when cash return on invested capital is high.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Four consecutive earnings beats and exceptional cash conversion — free cash flow running at 213% of net income — make the valuation look attractive at 13.4 times operating cash flow, but a confirmed price downtrend with a moving average declining at 5.3% per month and a death cross mean the fundamental quality has not yet translated into price recovery.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.7 |
| ROA | 3.4 |
| Gross margin | 2.7 |
| Op margin | 1.5 |
| Net margin | 1.5 |
| Current ratio | 6.2 |
| FCF quality | 10.0 |
| Moat | 5.0 |
| Piotroski F | 10.0 |
- ▸Excellent cash conversion: 213% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 9/9
Growth
3.8/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 3.8 |
Momentum
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 0.1 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -5.6%/30d — confirmed downtrend
Sentiment
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.0 |
| Analyst rating | 6.8 |
| Price target | 8.5 |
- ▸LLM news sentiment: +0.40 (n=1)
- ▸Light analyst coverage (8.0) — signal dampened
- ▸Analyst upside: 29%
Insider
5.0/10data confidence 50%Peer rank
4.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.3 |
| quality rank | 6.3 |
| growth rank | 2.8 |
Technical
2.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.3 |
| support resistance | 0.1 |
| 52w position | 4.0 |
| gap | 5.0 |
Risk (lower is worse)
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| days to cover | 7.7 |
| volatility | 5.0 |
| put call | 10.0 |
| implied vol | 4.9 |
| beta | 7.6 |
| debt equity | 6.7 |
| news risk | 5.5 |
Catalyst
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 6.2 |
| dividend safety | 7.0 |
| news activity | 5.0 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 84.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:6.1>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:19d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:1.1<1.5@spot
Warning (1)
- DEATH_CROSS:momentum=6.1>=5.0 recovering
Reward-to-Risk
1.12
Upside
+12.5%
Downside
11.2%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 57
EdgeCatalyst-Driven — Earnings in 19d with 4/4 beat streak
SuitabilityModerate — Balanced profile
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 ( Sentiment at 7.4) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:1.1<1.5@spot) reinforce the read. Current asymmetry R:R is 1.12 — supplementary context, not the trigger for this path.
The strongest dimensions are Sentiment at 7.4, Risk (lower is worse) at 6.8, and Catalyst at 6.4; the weakest are Technical at 2.6, Growth at 3.8, and Peer rank at 4.4. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 1.12 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Consistent Earnings Beat Record
Trip ifEPS surprise falls below 0% for 2 consecutive reported quarters.
- P2Exceptional Cash Conversion Valuation
Trip ifFree cash flow conversion falls below 100% of net income for 2 consecutive quarters.
- P3Confirmed Price Downtrend
Trip ifPrice rises above $155 and the 200-day moving-average slope rises above 0% for 2 consecutive months.
- P4Weak Growth Limits Re Rating
Trip ifRevenue growth accelerates above 15% YoY for 2 consecutive quarters.