Value
6.9/10data confidence 60%| Component | Sub-score |
|---|---|
| P/E | 8.9 |
| P/S | 7.5 |
| EV/EBITDA | 4.3 |
HKD · Why this verdict
Why AMTD Digital (HKD) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score4.7/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
AMTD Digital scores as a high-quality, deeply undervalued software business with wide margins and a Rule of 40 reading of 198, but cash conversion is a red flag, the stock is down about 69% from its high and the data set lacks earnings history.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Quality scores 7.7/10 on an excellent ROE of 25%, 40% margins, a wide economic moat and a Piotroski F-Score of 8/9. Quality breakdown | ROE should stay above 20% and margins above 30% over the next 12 months. | Tripped↓Deteriorating |
| CounterQuality metrics at a small, sharply derated company can reflect one-time or non-operating gains rather than a durable software franchise. | ||
The business is flagged as attractively valued with a PEG of 0.12 and a 62% margin of safety, described as extreme undervaluation. Valuation breakdown | The valuation gap should narrow as the share price recovers toward estimated intrinsic value over 12 months. | ↓Deteriorating |
| CounterA 62% margin of safety after a 69% drawdown may signal that the market distrusts the reported numbers, not that the stock is mispriced. | ||
Earnings quality carries a red flag: free cash flow runs at -355% of net income despite headline margins of 40%. Quality breakdown | Free cash flow should turn positive relative to net income within the next 12 months. | ↓Deteriorating |
| CounterIf profits do not convert to cash, reported margins and the Rule of 40 reading of 198 may overstate true economic returns. | ||
Momentum is 6.7/10 with a golden cross, price above the 200-day average and rising on-balance volume after a 69% drawdown from the 52-week high. Momentum breakdown | Price should hold above the 200-day moving average and above the $1.59 stop level. | ↓Deteriorating |
| CounterMomentum from a depressed base of $1.72 can reverse quickly, and the entry sits only 4.8% above the stop. | ||
The nearest resistance take-profit is $1.79, only 7.2% above the $1.72 price, against a 4.8% downside to the stop. Targets | Price should break above the $1.79 resistance level to open further upside over 12 months. | ↓Deteriorating |
| CounterWith no analyst target and no earnings history in the data, upside beyond resistance cannot be anchored to any estimate. | ||
Quality scores 7.7/10 on an excellent ROE of 25%, 40% margins, a wide economic moat and a Piotroski F-Score of 8/9.
Tripped↓DeterioratingQuality breakdown
- Expectation
- ROE should stay above 20% and margins above 30% over the next 12 months.
CounterQuality metrics at a small, sharply derated company can reflect one-time or non-operating gains rather than a durable software franchise.
The business is flagged as attractively valued with a PEG of 0.12 and a 62% margin of safety, described as extreme undervaluation.
↓DeterioratingValuation breakdown
- Expectation
- The valuation gap should narrow as the share price recovers toward estimated intrinsic value over 12 months.
CounterA 62% margin of safety after a 69% drawdown may signal that the market distrusts the reported numbers, not that the stock is mispriced.
Earnings quality carries a red flag: free cash flow runs at -355% of net income despite headline margins of 40%.
↓DeterioratingQuality breakdown
- Expectation
- Free cash flow should turn positive relative to net income within the next 12 months.
CounterIf profits do not convert to cash, reported margins and the Rule of 40 reading of 198 may overstate true economic returns.
Momentum is 6.7/10 with a golden cross, price above the 200-day average and rising on-balance volume after a 69% drawdown from the 52-week high.
↓DeterioratingMomentum breakdown
- Expectation
- Price should hold above the 200-day moving average and above the $1.59 stop level.
CounterMomentum from a depressed base of $1.72 can reverse quickly, and the entry sits only 4.8% above the stop.
The nearest resistance take-profit is $1.79, only 7.2% above the $1.72 price, against a 4.8% downside to the stop.
↓DeterioratingTargets
- Expectation
- Price should break above the $1.79 resistance level to open further upside over 12 months.
CounterWith no analyst target and no earnings history in the data, upside beyond resistance cannot be anchored to any estimate.
Per-dimension breakdown
Quality
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.0 |
| ROA | 3.1 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 7.6 |
| Moat | 5.9 |
| Piotroski F | 6.7 |
- ▸Strong margins: 40%
Growth
0.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 0.0 |
| EPS growth | 0.0 |
- ▸Declining revenue: -13%
Momentum
2.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 3.9 |
| OBV | 1.0 |
| MA position | 2.2 |
| Volume | 1.2 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA but MA still rising (+2.7%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
5.0/10data confidence 67%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.0 |
| Analyst rating | 5.0 |
Insider
5.0/10data confidence 50%Peer rank
4.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.3 |
| quality rank | 7.7 |
| growth rank | 0.1 |
- ▸Attractive P/E vs peers
- ▸Best-in-class margins
Technical
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 10.0 |
| support resistance | 8.8 |
| 52w position | 0.0 |
Risk (lower is worse)
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.9 |
| days to cover | 7.3 |
| volatility | 2.6 |
| beta | 3.5 |
| debt equity | 8.1 |
Catalyst
5.0/10data confidence 25%| Component | Sub-score |
|---|---|
| news activity | 5.0 |
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:NO_DATE
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- MOMENTUM:2.6<4.5
Warning (1)
- ASYMMETRY:UPSIDE_EXHAUSTED (upside=0.0%)
Reward-to-Risk
0.00
Upside
+6.7%
Downside
7.9%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Drawdown -70% (>40% off 52w high)
Investment implication
The F-path SELL output reflects an overall score of 4.1 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Quality at 7.3) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:2.6<4.5) reinforce the read. Current asymmetry R:R is 0.00 — supplementary context, not the trigger for this path.
The strongest dimensions are Quality at 7.3, Value at 6.9, and Technical at 6.3; the weakest are Growth at 0.0, Momentum at 2.6, and Peer rank at 4.7. The V9 engine flagged 1 failed gate with 1 warning, 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.
- P1High Quality Compounder ProfileTripped
Trip ifReturn on equity falls below 15% from the current 25%.
- P2Deep Value With Margin Of Safety
Trip ifThe margin of safety shrinks below 20% from the current 62% as the price rises without earnings growth.
- P3Cash Conversion Red Flag
Trip ifFree cash flow to net income stays below -100% for 4 consecutive quarters.
- P4Breakout Momentum After Drawdown
Trip ifPrice falls below the $1.59 stop level from the current $1.72.
- P5Limited Near Term Upside To Resistance
Trip ifPrice fails to rise above $1.79 and drops more than 4.8% over the next 2 months.