Value
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 1.3 |
| P/S | 9.6 |
| EV/EBITDA | 5.6 |
| Fwd P/E | 6.2 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 20.7x
- ▸PEG: 0.08
GEL · Why this verdict
Why Genesis Energy (GEL) 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 score5.8/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Genesis Energy trades at a steep valuation discount with exceptional cash-to-earnings conversion, but four consecutive earnings misses averaging roughly 140% below estimates and deeply bearish options positioning indicate that operational execution has broken down; the risk/reward is mathematically favorable at roughly 3.8-to-1 but contingent on a delivery turn that has yet to appear.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The partnership trades at a forward earnings multiple of 19.3x and a price-to-growth ratio of 0.04, placing it in attractive value territory with roughly 14% headroom to the consensus analyst price target. Bull case | The share price converges toward $16.43 over 12 months as the operational outlook stabilizes and the market re-rates the depressed multiple. | ↓Deteriorating |
| CounterThe apparent discount may reflect the market correctly pricing in continued earnings deterioration rather than a mispricing; with four straight misses averaging roughly 140% below estimates, the earnings base underpinning the low multiple may keep shrinking. | ||
Free cash flow runs at 269% of net income, indicating that reported earnings materially understate actual cash generation, a reading corroborated by a balance-sheet quality score of 7 out of 9 on the Piotroski scale. Quality breakdown | Sustained free cash flow funds distribution coverage and partial deleveraging, bringing the debt-to-equity ratio meaningfully below 5x within 12 months. | ↓Deteriorating |
| CounterIn a capital-intensive midstream business, free cash flow exceeding reported earnings can signal that maintenance capital requirements are being understated; if true sustaining capex is higher than reported, the apparent cash cushion narrows significantly. | ||
The partnership has missed earnings estimates in all four of the most recent quarters, with an average shortfall of roughly 140%, raising serious questions about management's ability to forecast and deliver on operational targets. Earnings | The miss pattern reverses — EPS surprise turns positive for at least two consecutive quarters — signaling that the operational gap between guidance and results has closed. | ↑Improving |
| CounterThe high distribution yield alongside leverage of 5.9x debt-to-equity suggests the partnership may be structurally paying out more than operations currently support, making the miss pattern difficult to reverse without a distribution reset. | ||
An elevated put-to-call ratio of 4.25, a volume surge of 3.8 times the average on the recent selloff, and a price sitting below a flat 200-day moving average together suggest institutional distribution rather than accumulation. Momentum breakdown | The put-to-call ratio compresses below 2.0 and price reclaims the 200-day moving average, signaling that distribution pressure has abated. | →Stable |
| CounterElevated put positioning can reflect hedges placed by large existing unitholders rather than outright directional bets against the stock, which would overstate the actual conviction of institutional sellers. | ||
The partnership trades at a forward earnings multiple of 19.3x and a price-to-growth ratio of 0.04, placing it in attractive value territory with roughly 14% headroom to the consensus analyst price target.
↓DeterioratingBull case
- Expectation
- The share price converges toward $16.43 over 12 months as the operational outlook stabilizes and the market re-rates the depressed multiple.
CounterThe apparent discount may reflect the market correctly pricing in continued earnings deterioration rather than a mispricing; with four straight misses averaging roughly 140% below estimates, the earnings base underpinning the low multiple may keep shrinking.
Free cash flow runs at 269% of net income, indicating that reported earnings materially understate actual cash generation, a reading corroborated by a balance-sheet quality score of 7 out of 9 on the Piotroski scale.
↓DeterioratingQuality breakdown
- Expectation
- Sustained free cash flow funds distribution coverage and partial deleveraging, bringing the debt-to-equity ratio meaningfully below 5x within 12 months.
CounterIn a capital-intensive midstream business, free cash flow exceeding reported earnings can signal that maintenance capital requirements are being understated; if true sustaining capex is higher than reported, the apparent cash cushion narrows significantly.
The partnership has missed earnings estimates in all four of the most recent quarters, with an average shortfall of roughly 140%, raising serious questions about management's ability to forecast and deliver on operational targets.
↑ImprovingEarnings
- Expectation
- The miss pattern reverses — EPS surprise turns positive for at least two consecutive quarters — signaling that the operational gap between guidance and results has closed.
CounterThe high distribution yield alongside leverage of 5.9x debt-to-equity suggests the partnership may be structurally paying out more than operations currently support, making the miss pattern difficult to reverse without a distribution reset.
An elevated put-to-call ratio of 4.25, a volume surge of 3.8 times the average on the recent selloff, and a price sitting below a flat 200-day moving average together suggest institutional distribution rather than accumulation.
→StableMomentum breakdown
- Expectation
- The put-to-call ratio compresses below 2.0 and price reclaims the 200-day moving average, signaling that distribution pressure has abated.
CounterElevated put positioning can reflect hedges placed by large existing unitholders rather than outright directional bets against the stock, which would overstate the actual conviction of institutional sellers.
Per-dimension breakdown
Quality
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 7.6 |
| ROA | 2.7 |
| Gross margin | 3.0 |
| Op margin | 6.6 |
| Net margin | 2.1 |
| Current ratio | 3.7 |
| Moat | 6.8 |
| Piotroski F | 6.7 |
Growth
10.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 10.0 |
- ▸Strong growth: 41% YoY
Momentum
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 8.3 |
| OBV | 10.0 |
| MA position | 8.0 |
| Volume | 2.5 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.0 |
| Analyst rating | 6.8 |
| Price target | 7.4 |
- ▸LLM news sentiment: +0.40 (n=1)
- ▸Light analyst coverage (3.0) — signal dampened
Insider
4.1/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.5 |
| holder change | 3.8 |
| notable moves | 3.0 |
- ▸Insider buying (low materiality) — $201,636 (0.011% of mkt cap)
Peer rank
3.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.0 |
| quality rank | 3.9 |
| growth rank | 4.8 |
Technical
2.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.5 |
| 52w position | 7.4 |
Risk (lower is worse)
2.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.9 |
| days to cover | 0.0 |
| volatility | 4.0 |
| put call | 0.0 |
| implied vol | 0.0 |
| debt equity | 0.0 |
- ▸Elevated put/call: 4.77
- ▸High IV: 104%
Catalyst
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 3.5 |
| news activity | 5.0 |
- ▸Earnings concerns: 1B/3M
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Extreme risk factors.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:RISK_FLOORPassed (6)
- MOMENTUM:6.8>=5.5
- INSIDER:OK
- 8K:CLEAN
- EARNINGS_PROXIMITY:77d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (2)
- ASYMMETRY:UPSIDE_EXHAUSTED (upside=-0.0%)
- DEATH_CROSS:momentum=6.8>=5.0 recovering
Reward-to-Risk
0.00
Upside
+0.0%
Downside
10.5%
Sizing output
AVOID
SetupMomentum Cont — Trend continuation, RSI 65, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $1.9B<$5B
Investment implication
The SELL_IF_HOLDING verdict reflects clean gate clearance against Growth at 10.0 and asymmetric R:R of 0.00.
The strongest dimensions are Growth at 10.0, Sentiment at 7.1, and Momentum at 6.8; the weakest are Risk (lower is worse) at 2.0, Technical at 2.6, and Peer rank at 3.2. The V9 engine cleared all gates with 2 warnings, producing an asymmetric reward-to-risk of 0.00 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Valuation Discount Opportunity
Trip ifConsensus forward EPS falls to $0.00 or below for 2 consecutive quarters, eliminating the earnings base that supports the valuation discount.
- P2Exceptional Cash Conversion
Trip ifFree cash flow falls below 100% of net income for 2 consecutive quarters, indicating the cash-conversion advantage has disappeared.
- P3Persistent Earnings Miss Pattern
Trip ifEPS surprise exceeds 0% for 2 consecutive quarters, indicating the miss pattern has reversed.
- P4Bearish Options And Technical Breakdown
Trip ifPut-to-call ratio falls below 1.5 and price rises above the 200-day moving average for 4 consecutive weeks, confirming the bearish technical setup has resolved.