Value
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 3.6 |
| P/S | 8.3 |
| EV/EBITDA | 1.0 |
| Fwd P/E | 4.7 |
| PEG | 4.1 |
| Analyst target | 3.0 |
- ▸Forward P/E: 26.6x
- ▸PEG: 2.36
GRC · Why this verdict
Why Gorman-Rupp Company (The) (GRC) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictBUY WAIT
Overall score5.6/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
A financially sound specialty industrial machinery company with strong momentum—RSI at 76, rising on-balance volume, and a near-perfect financial health score—has moved above its analyst consensus target with effectively no positive headroom remaining, while earnings estimates are drifting lower and a 28.9x forward earnings multiple prices in a growth trajectory the current estimate revisions do not support.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The stock is trading above the 200-day moving average with rising on-balance volume and a bullish MACD configuration, indicating broad participation in the advance and a constructive underlying trend that has driven price to within 1.4% of its 52-week high. Momentum breakdown | Price holds above the 200-day moving average and on-balance volume continues rising for 3 additional months, confirming the uptrend remains intact. | ↓Deteriorating |
| CounterRSI at 76 is in overbought territory, and the stock has already exceeded its analyst consensus target—both conditions historically associated with near-term mean reversion rather than continued momentum, particularly when earnings estimates are moving lower. | ||
At a forward price-to-earnings multiple of 28.9x and a PEG ratio of 2.53, the stock is priced well above average for an industrial machinery business, at the same time that earnings estimates are drifting lower—creating a double-risk of both multiple compression and earnings revision headwinds. Value | Forward earnings multiple compresses below 22x as either price pulls back or estimates are revised upward, restoring a more defensible valuation anchor. | →Stable |
| CounterA premium multiple can persist when a company is consistently beating and raising; the three most recent quarterly earnings beats (including two large beats above 27% and 38% surprise) suggest analysts may be anchoring estimates too conservatively, which could result in upward revisions rather than further deterioration. | ||
The company has achieved a Piotroski financial health score of 9 out of 9—indicating strong balance sheet, profitability, and operating efficiency metrics across all evaluated dimensions—combined with above-average free cash flow quality, providing a durable foundation for the business regardless of near-term price action. Quality | Financial health metrics are maintained at or above current levels over the next 4 reported quarters, with no deterioration in profitability or cash conversion ratios. | →Stable |
| CounterThe Piotroski score is a backward-looking snapshot; current ratio and liquidity components at the maximum do not protect against a cyclical revenue decline, and the below-average gross margin suggests the cost structure may be sensitive to volume or input price headwinds. | ||
The stock has moved above its near-term take-profit target at $84.85, with the current price of $85.40 leaving approximately -0.6% of headroom—meaning the stock has already priced in the near-term upside and the risk/reward of approximately -0.11-to-1 is unfavorable for new buyers. Price targets | Price falls back below $78, restoring at least 8% of potential upside to the prior resistance level and resetting the reward/risk geometry to favorable. | →Stable |
| CounterA stock that breaks and holds above its technical target can establish a new, higher equilibrium; if the next earnings print beats meaningfully, analysts may revise consensus upward and create fresh upside potential without the stock needing to pull back. | ||
Forward earnings estimates are trending downward—a signal that the analyst community expects business conditions to moderate—which, combined with a premium valuation multiple, means the stock is becoming progressively more expensive on a forward basis even as estimates erode. Bear case | Earnings estimate revisions turn positive (upward) over the next 2 months, with at least 2 analyst upgrades or estimate increases restoring positive estimate momentum. | ↑Improving |
| CounterEstimate drift can reverse sharply after a strong earnings print; the company's three most recent quarterly beats include a 38.8% surprise in the most recent quarter, suggesting management guidance may be running conservatively and the next print could trigger upward revisions. | ||
The stock is trading above the 200-day moving average with rising on-balance volume and a bullish MACD configuration, indicating broad participation in the advance and a constructive underlying trend that has driven price to within 1.4% of its 52-week high.
↓DeterioratingMomentum breakdown
- Expectation
- Price holds above the 200-day moving average and on-balance volume continues rising for 3 additional months, confirming the uptrend remains intact.
CounterRSI at 76 is in overbought territory, and the stock has already exceeded its analyst consensus target—both conditions historically associated with near-term mean reversion rather than continued momentum, particularly when earnings estimates are moving lower.
At a forward price-to-earnings multiple of 28.9x and a PEG ratio of 2.53, the stock is priced well above average for an industrial machinery business, at the same time that earnings estimates are drifting lower—creating a double-risk of both multiple compression and earnings revision headwinds.
→StableValue
- Expectation
- Forward earnings multiple compresses below 22x as either price pulls back or estimates are revised upward, restoring a more defensible valuation anchor.
CounterA premium multiple can persist when a company is consistently beating and raising; the three most recent quarterly earnings beats (including two large beats above 27% and 38% surprise) suggest analysts may be anchoring estimates too conservatively, which could result in upward revisions rather than further deterioration.
The company has achieved a Piotroski financial health score of 9 out of 9—indicating strong balance sheet, profitability, and operating efficiency metrics across all evaluated dimensions—combined with above-average free cash flow quality, providing a durable foundation for the business regardless of near-term price action.
→StableQuality
- Expectation
- Financial health metrics are maintained at or above current levels over the next 4 reported quarters, with no deterioration in profitability or cash conversion ratios.
CounterThe Piotroski score is a backward-looking snapshot; current ratio and liquidity components at the maximum do not protect against a cyclical revenue decline, and the below-average gross margin suggests the cost structure may be sensitive to volume or input price headwinds.
The stock has moved above its near-term take-profit target at $84.85, with the current price of $85.40 leaving approximately -0.6% of headroom—meaning the stock has already priced in the near-term upside and the risk/reward of approximately -0.11-to-1 is unfavorable for new buyers.
→StablePrice targets
- Expectation
- Price falls back below $78, restoring at least 8% of potential upside to the prior resistance level and resetting the reward/risk geometry to favorable.
CounterA stock that breaks and holds above its technical target can establish a new, higher equilibrium; if the next earnings print beats meaningfully, analysts may revise consensus upward and create fresh upside potential without the stock needing to pull back.
Forward earnings estimates are trending downward—a signal that the analyst community expects business conditions to moderate—which, combined with a premium valuation multiple, means the stock is becoming progressively more expensive on a forward basis even as estimates erode.
↑ImprovingBear case
- Expectation
- Earnings estimate revisions turn positive (upward) over the next 2 months, with at least 2 analyst upgrades or estimate increases restoring positive estimate momentum.
CounterEstimate drift can reverse sharply after a strong earnings print; the company's three most recent quarterly beats include a 38.8% surprise in the most recent quarter, suggesting management guidance may be running conservatively and the next print could trigger upward revisions.
Per-dimension breakdown
Quality
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.8 |
| ROA | 4.9 |
| Gross margin | 2.3 |
| Op margin | 6.1 |
| Net margin | 4.2 |
| Current ratio | 9.8 |
| FCF quality | 7.4 |
| Moat | 5.5 |
| Piotroski F | 10.0 |
- ▸Strong Piotroski F-Score: 9/9
Growth
7.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.4 |
| EPS growth | 10.0 |
Momentum
2.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 8.1 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 4.0 |
| Volume | 0.5 |
- ▸Oversold in uptrend (RSI 28)
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.1 |
| Price target | 4.2 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (3.0) — signal dampened
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
4.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.0 |
| quality rank | 5.2 |
| growth rank | 4.3 |
Technical
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 7.4 |
| support resistance | 8.2 |
| 52w position | 7.1 |
| gap | 5.0 |
Risk (lower is worse)
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.7 |
| days to cover | 7.5 |
| volatility | 1.8 |
| beta | 5.9 |
| debt equity | 6.9 |
Catalyst
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 6.8 |
- ▸Strong earnings: 3B/1M
- ▸Earnings in 3 days
How the verdict was assembled
Engine trigger
Earnings in 3 days. Wait until post-earnings.
Engine technical detail
verdict_path:
L3:NEWS_BLOCK|ENTRY_STICKY:WITHIN_BANDPassed (5)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:2.7<4.5
- ASYMMETRY:-2.3=NEGATIVE
- EARNINGS_PROXIMITY:3d<=7d
Warning (0)
none
Reward-to-Risk
-2.27
Upside
-19.5%
Downside
8.6%
Sizing output
STARTER
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $2.1B<$5B
Investment implication
A recent news event triggered an L3 news-block on the verdict path. Trigger: Earnings in 3 days. Wait until post-earnings. The 10-dimension scores remain Insider at 7.3 (strongest), but MOMENTUM:2.7<4.5 also fails — the news block is the proximate trigger, not the sole driver.
The strongest dimensions are Insider at 7.3, Growth at 7.2, and Technical at 6.9; the weakest are Momentum at 2.7, Value at 4.1, and Peer rank at 4.3. The V9 engine flagged 3 failed gates, producing an asymmetric reward-to-risk of -2.27 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Strong Technical Momentum
Trip ifRSI falls below 50 and price crosses below the 200-day moving average for 2 consecutive weeks, invalidating the positive momentum thesis.
- P2Rich Valuation With Declining Estimates
Trip ifForward P/E multiple compresses below 22x, removing the expensive-valuation concern by bringing the stock back to a more defensible multiple.
- P3High Quality Financial Profile
Trip ifPiotroski F-score falls below 6 for 2 consecutive reported quarters, indicating meaningful deterioration in financial health quality.
- P4Stock Above Consensus Target
Trip ifAnalyst consensus price target revises upward above $100, restoring at least 17% potential upside from the current price and creating favorable reward/risk for new entry.
- P5Earnings Estimates Drifting Lower
Trip ifAnalyst EPS estimate revisions for the next reported quarter turn positive for at least 3 consecutive weeks, ending the downward drift in forward estimates.