Value
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.8 |
| P/S | 8.2 |
| EV/EBITDA | 1.2 |
| Fwd P/E | 5.2 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 24.1x
- ▸PEG: 0.14
HLIO · Why this verdict
Why Helios Technologies (HLIO) 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 score6.0/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Helios Technologies has delivered four consecutive earnings beats averaging roughly 14% above consensus and converts free cash flow at 162% of net income — the quality fundamentals are real — but the stock has essentially reached its near-term resistance target and the risk/reward is unfavorable, making this a hold rather than a new-entry setup.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company has delivered four consecutive quarterly earnings beats — with individual positive surprises of 17.41%, 9.76%, 12.65%, and 16.13% — establishing a highly consistent pattern of under-promising and over-delivering that reflects operational discipline and management credibility. Earnings | Earnings beats should continue in the next two quarters with surprises above 8%, sustaining the track record and supporting stable-to-rising analyst estimates. | ↓Deteriorating |
| CounterFour consecutive beats raises the bar for future performance; as analyst models tighten around the actual delivery pattern, the margin for upside surprise narrows, and any slip below consensus would disproportionately damage the credibility premium embedded in the current valuation. | ||
Free cash flow conversion stands at 162% of net income alongside a Piotroski F-Score of 9/9, indicating an unusually high-quality earnings stream where reported profits substantially understate the actual cash being generated — a financial profile that underpins long-term intrinsic value. Quality | Free cash flow conversion should remain above 130% of net income for the next four quarters, confirming that the cash efficiency is structural rather than driven by one-time working-capital tailwinds. | →Stable |
| CounterConversion ratios substantially above 100% can reflect non-recurring working-capital movements or timing of capital expenditures; if the ratio falls below 100% for 2 consecutive quarters, the quality signal weakens and the premium embedded in the financial profile may not be warranted. | ||
The hydraulics segment accounts for approximately 64% of revenue and the Americas geography represents approximately 79% of the electronics segment — a dual concentration that creates significant sensitivity to slowdowns in either the industrial hydraulics market or North American economic conditions. Bear case | If the thesis holds, segment revenue should remain relatively stable quarter-to-quarter, validating that the concentrated exposure is not creating outsized cyclical risk. | ↑Improving |
| CounterIf the hydraulics segment falls below 55% of total revenue for 4 consecutive quarters, it would indicate the company is successfully diversifying its mix, and the concentration risk that underpins this pillar is actively being managed down. | ||
The stock has essentially reached its near-term resistance target — with less than 1% headroom to the take-profit level — while the risk/reward is unfavorable; the geometric upside has been consumed by the current price level, making this unsuitable for new capital allocation. Price targets | A meaningful pullback from current levels or an analyst target revision of 15% or more would be required before the geometric setup justifies initiating or adding to a position. | Tripped→Stable |
| CounterIf analyst consensus targets are revised upward by more than 15% following the next earnings report, the upside-to-downside ratio would reset above 1.5-to-1 and the exhausted-upside thesis would no longer hold. | ||
The company has delivered four consecutive quarterly earnings beats — with individual positive surprises of 17.41%, 9.76%, 12.65%, and 16.13% — establishing a highly consistent pattern of under-promising and over-delivering that reflects operational discipline and management credibility.
↓DeterioratingEarnings
- Expectation
- Earnings beats should continue in the next two quarters with surprises above 8%, sustaining the track record and supporting stable-to-rising analyst estimates.
CounterFour consecutive beats raises the bar for future performance; as analyst models tighten around the actual delivery pattern, the margin for upside surprise narrows, and any slip below consensus would disproportionately damage the credibility premium embedded in the current valuation.
Free cash flow conversion stands at 162% of net income alongside a Piotroski F-Score of 9/9, indicating an unusually high-quality earnings stream where reported profits substantially understate the actual cash being generated — a financial profile that underpins long-term intrinsic value.
→StableQuality
- Expectation
- Free cash flow conversion should remain above 130% of net income for the next four quarters, confirming that the cash efficiency is structural rather than driven by one-time working-capital tailwinds.
CounterConversion ratios substantially above 100% can reflect non-recurring working-capital movements or timing of capital expenditures; if the ratio falls below 100% for 2 consecutive quarters, the quality signal weakens and the premium embedded in the financial profile may not be warranted.
The hydraulics segment accounts for approximately 64% of revenue and the Americas geography represents approximately 79% of the electronics segment — a dual concentration that creates significant sensitivity to slowdowns in either the industrial hydraulics market or North American economic conditions.
↑ImprovingBear case
- Expectation
- If the thesis holds, segment revenue should remain relatively stable quarter-to-quarter, validating that the concentrated exposure is not creating outsized cyclical risk.
CounterIf the hydraulics segment falls below 55% of total revenue for 4 consecutive quarters, it would indicate the company is successfully diversifying its mix, and the concentration risk that underpins this pillar is actively being managed down.
The stock has essentially reached its near-term resistance target — with less than 1% headroom to the take-profit level — while the risk/reward is unfavorable; the geometric upside has been consumed by the current price level, making this unsuitable for new capital allocation.
Tripped→StablePrice targets
- Expectation
- A meaningful pullback from current levels or an analyst target revision of 15% or more would be required before the geometric setup justifies initiating or adding to a position.
CounterIf analyst consensus targets are revised upward by more than 15% following the next earnings report, the upside-to-downside ratio would reset above 1.5-to-1 and the exhausted-upside thesis would no longer hold.
Per-dimension breakdown
Quality
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.2 |
| ROA | 2.9 |
| Gross margin | 2.6 |
| Op margin | 5.2 |
| Net margin | 3.5 |
| Current ratio | 9.6 |
| FCF quality | 10.0 |
| Moat | 5.6 |
| Piotroski F | 10.0 |
- ▸Excellent cash conversion: 162% FCF/NI
- ▸Strong Piotroski F-Score: 9/9
Growth
8.3/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 6.7 |
| EPS growth | 10.0 |
Momentum
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 8.5 |
| MACD | 0.0 |
| OBV | 4.7 |
| MA position | 4.0 |
| Volume | 0.1 |
- ▸Oversold in uptrend (RSI 22)
- ▸Above 200-day MA
Sentiment
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.0 |
| Analyst rating | 5.0 |
| Price target | 6.2 |
- ▸LLM news sentiment: +0.40 (n=1)
Insider
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Modest insider selling — $1,134,121 (0.042% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.0 |
| quality rank | 3.3 |
| growth rank | 7.0 |
Technical
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 6.8 |
| support resistance | 7.9 |
| 52w position | 7.1 |
| gap | 7.0 |
Risk (lower is worse)
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.6 |
| days to cover | 8.6 |
| volatility | 2.9 |
| beta | 6.0 |
| debt equity | 8.4 |
| news risk | 6.0 |
- ▸Concentration risks: 3 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 9.5 |
| dividend safety | 6.8 |
| news activity | 5.0 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more. | News modifier +2 (HOLD_IF_HOLDING → STRONG_BUY_WAIT).
Engine technical detail
verdict_path:
L4:PATH_F_HOLD|L3:NEWS_MOD=+2|ENTRY_STICKY:WITHIN_BANDPassed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_BOOST:ANALYST:0.40
- EARNINGS_PROXIMITY:18d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:3.5<4.5
- ASYMMETRY:-0.8=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.76
Upside
-5.8%
Downside
7.7%
Sizing output
STARTER
Setup— — No clear chart pattern; technical signals are mixed
EdgeCatalyst-Driven — Earnings in 18d with 4/4 beat streak
SuitabilityAggressive — MCap $2.7B<$5B
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: INSIDER:OK. Top dim: Growth at 8.3; weakest: Momentum at 3.5. No conviction either direction.
The strongest dimensions are Growth at 8.3, Technical at 7.2, and Catalyst at 6.9; the weakest are Momentum at 3.5, Peer rank at 5.1, and Value at 5.5. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -0.76 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Earnings Beat Streak
Trip ifEPS surprise falls below 0% for 2 consecutive quarters, breaking the four-quarter beat streak.
- P2Exceptional Free Cash Flow Generation
Trip ifFree cash flow falls below 100% of net income for 2 consecutive quarters.
- P3Heavy Segment Geographic Concentration
Trip ifHydraulics segment falls below 55% of total revenue for 4 consecutive quarters, indicating successful diversification has reduced the concentration risk.
- P4Near Term Upside ExhaustedTripped
Trip ifAnalyst consensus price target is revised upward by more than 15%, restoring upside to the take-profit level above 15% and resetting the risk/reward above 1.5-to-1.