Value
6.2/10data confidence 83%| Component | Sub-score |
|---|---|
| P/S | 9.8 |
| EV/EBITDA | 4.7 |
| Fwd P/E | 7.7 |
| PEG | 5.7 |
| Analyst target | 3.0 |
- ▸Forward P/E: 15.8x
- ▸PEG: 1.32
GPC · Why this verdict
Why Genuine Parts (GPC) 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 score4.8/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company's overall quality assessment lands just below the minimum holding-grade threshold, driven by weak return on equity and below-average operating margins, even though the balance sheet and free cash flow metrics are comparatively sound. Warnings | Quality metrics rise above the minimum floor within four quarters as operating margins stabilize and return on capital recovers. | →Stable |
| CounterFree cash flow is converting at 1,000% of net income—a remarkably high ratio that may reflect accounting differences between cash and accrual earnings, and the Piotroski financial health score indicates an otherwise sound balance sheet. | ||
The stock is in a confirmed long-term downtrend with the 200-day moving average declining at 3.7% per 30 days, yet RSI has reached 73—an overbought reading in a declining trend that typically marks a bear-market rally peak rather than a genuine trend reversal. Momentum | RSI falls back below 50 within six weeks as the rally exhausts, confirming the continued dominance of the downtrend. | →Stable |
| CounterMACD is improving and on-balance volume is rising alongside the overbought RSI reading, which could indicate that what appears to be a bear rally is actually the early phase of a genuine trend reversal with accumulating demand. | ||
A put/call ratio of 2.13 indicates that options market participants are paying for significantly more downside protection than upside exposure—a signal that informed market participants remain skeptical of the current near-term price recovery. Risk | Put/call ratio normalizes below 1.0 within six months as the stock's trend reversal is confirmed and protective hedges are unwound. | →Stable |
| CounterElevated put/call ratios in recovering downtrends can sometimes signal a sentiment extreme rather than an accurate directional forecast, and heavy put positioning could ultimately fuel short-covering that amplifies any upside move. | ||
At a forward price-to-earnings ratio of 12.5 times and a PEG ratio of 1.32, the stock trades at an attractive multiple with roughly 27% analyst-consensus upside to the price target—a valuation case that provides a floor to downside risk if fundamentals stabilize. Value | Forward earnings estimates hold steady over the next 12 months, sustaining the low-multiple valuation case and supporting a price recovery toward analyst targets. | →Stable |
| CounterThe two earnings beats and two misses in the last four quarters, with a negative average EPS surprise of 3.1%, suggest estimates may be too high—eroding the apparent valuation attractiveness if earnings are cut. | ||
A recent officer departure or appointment flagged in corporate filings introduces leadership-transition uncertainty at a time when the business is already navigating below-floor quality metrics and an inconsistent earnings delivery record. Gates warning | The next two earnings reports show stable or improving guidance, confirming the leadership change has not disrupted operational execution. | →Stable |
| CounterLeadership changes can be catalysts for strategic reset—new executives sometimes initiate margin improvement programs or capital-allocation discipline that ultimately re-rate the stock over a 12-to-18-month horizon. | ||
The company's overall quality assessment lands just below the minimum holding-grade threshold, driven by weak return on equity and below-average operating margins, even though the balance sheet and free cash flow metrics are comparatively sound.
→StableWarnings
- Expectation
- Quality metrics rise above the minimum floor within four quarters as operating margins stabilize and return on capital recovers.
CounterFree cash flow is converting at 1,000% of net income—a remarkably high ratio that may reflect accounting differences between cash and accrual earnings, and the Piotroski financial health score indicates an otherwise sound balance sheet.
The stock is in a confirmed long-term downtrend with the 200-day moving average declining at 3.7% per 30 days, yet RSI has reached 73—an overbought reading in a declining trend that typically marks a bear-market rally peak rather than a genuine trend reversal.
→StableMomentum
- Expectation
- RSI falls back below 50 within six weeks as the rally exhausts, confirming the continued dominance of the downtrend.
CounterMACD is improving and on-balance volume is rising alongside the overbought RSI reading, which could indicate that what appears to be a bear rally is actually the early phase of a genuine trend reversal with accumulating demand.
A put/call ratio of 2.13 indicates that options market participants are paying for significantly more downside protection than upside exposure—a signal that informed market participants remain skeptical of the current near-term price recovery.
→StableRisk
- Expectation
- Put/call ratio normalizes below 1.0 within six months as the stock's trend reversal is confirmed and protective hedges are unwound.
CounterElevated put/call ratios in recovering downtrends can sometimes signal a sentiment extreme rather than an accurate directional forecast, and heavy put positioning could ultimately fuel short-covering that amplifies any upside move.
At a forward price-to-earnings ratio of 12.5 times and a PEG ratio of 1.32, the stock trades at an attractive multiple with roughly 27% analyst-consensus upside to the price target—a valuation case that provides a floor to downside risk if fundamentals stabilize.
→StableValue
- Expectation
- Forward earnings estimates hold steady over the next 12 months, sustaining the low-multiple valuation case and supporting a price recovery toward analyst targets.
CounterThe two earnings beats and two misses in the last four quarters, with a negative average EPS surprise of 3.1%, suggest estimates may be too high—eroding the apparent valuation attractiveness if earnings are cut.
A recent officer departure or appointment flagged in corporate filings introduces leadership-transition uncertainty at a time when the business is already navigating below-floor quality metrics and an inconsistent earnings delivery record.
→StableGates warning
- Expectation
- The next two earnings reports show stable or improving guidance, confirming the leadership change has not disrupted operational execution.
CounterLeadership changes can be catalysts for strategic reset—new executives sometimes initiate margin improvement programs or capital-allocation discipline that ultimately re-rate the stock over a 12-to-18-month horizon.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Genuine Parts carries an attractive forward valuation but falls just short of the quality floor, sits in a confirmed long-term downtrend with an overbought technical reading, and generates a risk/reward ratio below the minimum asymmetry bar—leaving the setup better suited to observation than new capital commitment.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.4 |
| ROA | 3.0 |
| Gross margin | 3.5 |
| Op margin | 2.3 |
| Net margin | 0.1 |
| Current ratio | 4.3 |
| FCF quality | 10.0 |
| Moat | 5.0 |
| Piotroski F | 6.7 |
- ▸Excellent cash conversion: 1000% FCF/NI
- ▸No competitive moat
Growth
2.9/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.2 |
| EPS growth | 1.6 |
Momentum
8.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.6 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 7.5 |
| Volume | 10.0 |
| vol acceleration | 9.1 |
- ▸Overbought (RSI 87)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat/negative + RSI 87 (late-cycle distribution risk)
- ▸Volume surge (2.6x avg) on up move
Sentiment
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.5 |
| Analyst rating | 6.8 |
| Price target | 5.2 |
- ▸Light analyst coverage (8.0) — signal dampened
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Negligible insider selling — $456,485 (0.002% of mkt cap)
Peer rank
2.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.5 |
| quality rank | 2.2 |
| growth rank | 4.3 |
Technical
3.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.7 |
| 52w position | 7.8 |
| gap | 5.0 |
Risk (lower is worse)
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.4 |
| days to cover | 5.0 |
| volatility | 4.0 |
| put call | 8.0 |
| implied vol | 2.8 |
| beta | 9.1 |
| debt equity | 4.0 |
- ▸High IV: 63%
Catalyst
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 0.9 |
| dividend safety | 5.2 |
| news activity | 8.0 |
- ▸Earnings concerns: 2B/2M
- ▸Dividend: 321.0%
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (6)
- MOMENTUM:8.4>=5.5
- INSIDER:OK
- 8K:CLEAN
- EARNINGS_PROXIMITY:18d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.8=NEGATIVE
Warning (1)
- DEATH_CROSS:momentum=8.4>=5.0 recovering
Reward-to-Risk
-0.80
Upside
-12.1%
Downside
15.0%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 87
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Momentum at 8.4 could not lift the engine output above the verdict floor. Failed gate signal: ASYMMETRY:-0.8=NEGATIVE.
The strongest dimensions are Momentum at 8.4, Value at 6.2, and Sentiment at 5.9; the weakest are Peer rank at 2.3, Growth at 2.9, and Technical at 3.4. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.80 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Confirmed Downtrend Overbought Rally
Trip if200-day moving average flattens and stock closes above it for 10 consecutive trading days while RSI sustains above 50.
- P2Quality Marginally Below Floor
Trip ifQuality score rises above the 4.0 minimum floor for 2 consecutive quarters.
- P3Elevated Put Call Hedging
Trip ifPut/call ratio falls below 1.0 for 4 consecutive weeks.
- P4Attractive Valuation Analyst Upside
Trip ifForward P/E rises above 18x for 2 consecutive quarters.
- P5Csuite Change Leadership Uncertainty
Trip ifEPS exceeds consensus in both of the next 2 reported quarters.