Value
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.7 |
| P/S | 7.0 |
| EV/EBITDA | 2.7 |
| Fwd P/E | 6.7 |
| PEG | 10.0 |
| Analyst target | 6.0 |
- ▸Forward P/E: 19.1x
- ▸PEG: 0.17
GSHD · Why this verdict
Why Goosehead Insurance (GSHD) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.9/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
With 11% of the float sold short, a persistent overhang of short positions can suppress price recovery even when fundamental news improves, creating a headwind that requires both strong earnings catalysts and sustained buying to overcome. Key risks | This concern resolves if short interest falls below 7% of float for 2 consecutive reporting weeks. | →Stable |
| CounterHigh short interest in a fundamentally sound business with strong recent earnings beats creates the conditions for a short squeeze — forced covering by short sellers can amplify upside moves well beyond what fundamentals alone would justify. | ||
Revenue growing at 23% year-over-year against a forward price-to-earnings multiple of 13.0x and a PEG ratio of 0.12 represents a material disconnect between the market price and the earnings growth trajectory, with analyst consensus implying over 57% upside to fair value. Growth breakdown | Revenue growth remains above 15% year-over-year for at least 2 consecutive quarters, and the PEG ratio stays below 0.30. | →Stable |
| CounterDeep valuation discounts in small-capitalization names can persist for years — or be followed by further compression — especially when momentum gates are failing and the technical structure is in a confirmed downtrend with a hard block. | ||
Free cash flow converts at 187% of net income and the Piotroski F-Score reaches 8 out of 9 — both well above norms for insurance brokers — indicating that reported earnings substantially understate the actual cash generation capacity of the franchise. Quality breakdown | Free cash flow as a percentage of net income stays above 150% and the Piotroski F-Score remains at or above 7 for the next 4 reporting periods. | →Stable |
| CounterA Piotroski F-Score of 8 and high cash conversion could partly reflect favorable insurance cycle timing rather than a structural advantage; if the cycle turns, cash conversion and earnings can fall rapidly in brokerage businesses. | ||
After a miss at the oldest point in the recent four-quarter window followed by an in-line result, the company has delivered two consecutive strong beats — including an 82% positive surprise in the most recent period — demonstrating improving execution and raising the probability of continued outperformance. Earnings | EPS surprise stays above 10% for at least 2 of the next 3 quarters. | →Stable |
| CounterTwo consecutive beats follow a miss and an in-line, suggesting the cadence is improving but not yet established; high implied volatility signals that the market anticipates large moves in either direction, and estimate revision cycles can reset the beat opportunity quickly. | ||
The stock is in a confirmed downtrend — trading below its 200-day moving average with the moving average declining at 11.4% over 30 days and volume distribution falling — meaning near-term price pressure is likely to persist until trend evidence reverses. Momentum breakdown | This concern resolves if the stock crosses back above its 200-day moving average with rising on-balance volume for 15 consecutive trading sessions. | →Stable |
| CounterMACD is improving despite the death cross, and RSI at 41 places the stock near an oversold entry zone; recovery setups after extreme drawdowns can generate rapid gains once institutional buying returns. | ||
With 11% of the float sold short, a persistent overhang of short positions can suppress price recovery even when fundamental news improves, creating a headwind that requires both strong earnings catalysts and sustained buying to overcome.
→StableKey risks
- Expectation
- This concern resolves if short interest falls below 7% of float for 2 consecutive reporting weeks.
CounterHigh short interest in a fundamentally sound business with strong recent earnings beats creates the conditions for a short squeeze — forced covering by short sellers can amplify upside moves well beyond what fundamentals alone would justify.
Revenue growing at 23% year-over-year against a forward price-to-earnings multiple of 13.0x and a PEG ratio of 0.12 represents a material disconnect between the market price and the earnings growth trajectory, with analyst consensus implying over 57% upside to fair value.
→StableGrowth breakdown
- Expectation
- Revenue growth remains above 15% year-over-year for at least 2 consecutive quarters, and the PEG ratio stays below 0.30.
CounterDeep valuation discounts in small-capitalization names can persist for years — or be followed by further compression — especially when momentum gates are failing and the technical structure is in a confirmed downtrend with a hard block.
Free cash flow converts at 187% of net income and the Piotroski F-Score reaches 8 out of 9 — both well above norms for insurance brokers — indicating that reported earnings substantially understate the actual cash generation capacity of the franchise.
→StableQuality breakdown
- Expectation
- Free cash flow as a percentage of net income stays above 150% and the Piotroski F-Score remains at or above 7 for the next 4 reporting periods.
CounterA Piotroski F-Score of 8 and high cash conversion could partly reflect favorable insurance cycle timing rather than a structural advantage; if the cycle turns, cash conversion and earnings can fall rapidly in brokerage businesses.
After a miss at the oldest point in the recent four-quarter window followed by an in-line result, the company has delivered two consecutive strong beats — including an 82% positive surprise in the most recent period — demonstrating improving execution and raising the probability of continued outperformance.
→StableEarnings
- Expectation
- EPS surprise stays above 10% for at least 2 of the next 3 quarters.
CounterTwo consecutive beats follow a miss and an in-line, suggesting the cadence is improving but not yet established; high implied volatility signals that the market anticipates large moves in either direction, and estimate revision cycles can reset the beat opportunity quickly.
The stock is in a confirmed downtrend — trading below its 200-day moving average with the moving average declining at 11.4% over 30 days and volume distribution falling — meaning near-term price pressure is likely to persist until trend evidence reverses.
→StableMomentum breakdown
- Expectation
- This concern resolves if the stock crosses back above its 200-day moving average with rising on-balance volume for 15 consecutive trading sessions.
CounterMACD is improving despite the death cross, and RSI at 41 places the stock near an oversold entry zone; recovery setups after extreme drawdowns can generate rapid gains once institutional buying returns.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Goosehead Insurance combines 23% revenue growth with a PEG ratio of 0.12 and free cash flow exceeding reported earnings by 87%, offering a deeply discounted growth franchise — but a confirmed price downtrend with a hard technical block on momentum signals the market is not yet ready to reward these fundamentals, calling for patience before deploying capital.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROA | 9.0 |
| Gross margin | 5.6 |
| Op margin | 6.4 |
| Net margin | 4.0 |
| Current ratio | 5.0 |
| FCF quality | 10.0 |
| Moat | 6.2 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 187% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
9.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 8.3 |
| EPS growth | 10.0 |
- ▸Strong growth: 23% YoY
Momentum
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 2.0 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 3.1 |
- ▸Overbought bear rally (RSI 86)
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -10.6%/30d — confirmed downtrend
Sentiment
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.1 |
| Price target | 8.1 |
| erm sentiment | 5.6 |
- ▸Analyst upside: 24%
Insider
4.0/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 3.9 |
| holder change | 5.0 |
- ▸Notable insider selling — $8,327,911 (0.444% of mkt cap)
Peer rank
3.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 0.4 |
| quality rank | 3.1 |
| growth rank | 5.0 |
Technical
0.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.2 |
| 52w position | 0.0 |
Risk (lower is worse)
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 4.3 |
| days to cover | 6.9 |
| volatility | 0.0 |
| put call | 10.0 |
| implied vol | 1.2 |
| beta | 5.4 |
- ▸High IV: 73%
Catalyst
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (5)
- MOMENTUM:6.2>=5.5
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:17d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:0.5<1.5@spot
- INSIDER:0.44%=HEAVY
Warning (2)
- DEATH_CROSS:momentum=6.2>=5.0 recovering
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
0.51
Upside
+7.6%
Downside
15.0%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 86
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Drawdown -53% (>40% off 52w high)
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:6.2>=5.5. Top dim: Growth at 9.2; weakest: Technical at 0.1. No conviction either direction.
The strongest dimensions are Growth at 9.2, Sentiment at 7.0, and Quality at 6.9; the weakest are Technical at 0.1, Peer rank at 3.4, and Insider at 4.0. The V9 engine flagged 2 failed gates with 2 warnings, producing an asymmetric reward-to-risk of 0.51 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Growth At Deep Valuation Discount
Trip ifRevenue growth falls below 15% year-over-year for 2 consecutive quarters.
- P2Exceptional Cash Conversion Quality
Trip ifFree cash flow as a percentage of net income falls below 120% for 2 consecutive quarters.
- P3Improving Earnings Beat Cadence
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P4Confirmed Downtrend Momentum Block
Trip ifStock closes above its 200-day moving average with rising on-balance volume for 15 consecutive trading sessions.
- P5High Short Interest Price Overhang
Trip ifShort interest falls below 7% of float for 2 consecutive reporting weeks.