Value
7.3/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 8.7 |
| Fwd P/E | 6.2 |
| PEG | 10.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 20.7x
- ▸PEG: 0.03
- ▸Attractively valued
IBTA · Why this verdict
Why Ibotta (IBTA) 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 score4.1/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Quality sits just below the engine's floor, with the Rule of 40 growth-profitability composite failing. Bear case | The quality score should climb back above the engine's minimum floor for the exit recommendation to be invalidated. | →Stable |
| CounterBeing only a fraction below the floor is a much smaller gap than typical exit-triggering names, suggesting the underlying business may not be far from clearing the bar. | ||
IBTA screens as attractively valued and generates positive free cash flow despite a GAAP loss. Quality breakdown | Free cash flow generation should remain positive and the value score should stay elevated over the next 12 months. | →Stable |
| CounterThe company also fails the Rule of 40 growth-plus-profitability composite, suggesting the cheap valuation may reflect legitimately weak growth rather than a bargain. | ||
IBTA is in a breakout setup — a golden cross, price above all moving averages, and a bullish MACD — with rising on-balance volume. Chart pattern detection | The breakout should hold with price staying above key moving averages and continued volume accumulation. | →Stable |
| CounterA very low technical score despite the breakout label suggests the broader technical picture is more mixed than the breakout framing implies. | ||
Insider activity is heavily bearish, with a large volume of net shares sold across numerous transactions over the trailing 90 days and no offsetting buys. Insider transaction read | The insider signal should shift toward neutral or bullish, with buying activity emerging, for the bearish read to ease. | →Stable |
| CounterAt a growth-stage software company, large insider sales are common for tax-planning or liquidity purposes tied to equity compensation rather than a view on valuation. | ||
Short interest sits at a justified elevated level and the engine's asymmetry ratio is negative, with downside risk outweighing the remaining upside. Reward-to-risk math | The asymmetry ratio should turn positive again, and short interest should decline, for the risk-reward profile to improve. | →Stable |
| CounterElevated short interest combined with a bullish technical breakout raises the risk of a short squeeze if sentiment shifts. | ||
Quality sits just below the engine's floor, with the Rule of 40 growth-profitability composite failing.
→StableBear case
- Expectation
- The quality score should climb back above the engine's minimum floor for the exit recommendation to be invalidated.
CounterBeing only a fraction below the floor is a much smaller gap than typical exit-triggering names, suggesting the underlying business may not be far from clearing the bar.
IBTA screens as attractively valued and generates positive free cash flow despite a GAAP loss.
→StableQuality breakdown
- Expectation
- Free cash flow generation should remain positive and the value score should stay elevated over the next 12 months.
CounterThe company also fails the Rule of 40 growth-plus-profitability composite, suggesting the cheap valuation may reflect legitimately weak growth rather than a bargain.
IBTA is in a breakout setup — a golden cross, price above all moving averages, and a bullish MACD — with rising on-balance volume.
→StableChart pattern detection
- Expectation
- The breakout should hold with price staying above key moving averages and continued volume accumulation.
CounterA very low technical score despite the breakout label suggests the broader technical picture is more mixed than the breakout framing implies.
Insider activity is heavily bearish, with a large volume of net shares sold across numerous transactions over the trailing 90 days and no offsetting buys.
→StableInsider transaction read
- Expectation
- The insider signal should shift toward neutral or bullish, with buying activity emerging, for the bearish read to ease.
CounterAt a growth-stage software company, large insider sales are common for tax-planning or liquidity purposes tied to equity compensation rather than a view on valuation.
Short interest sits at a justified elevated level and the engine's asymmetry ratio is negative, with downside risk outweighing the remaining upside.
→StableReward-to-risk math
- Expectation
- The asymmetry ratio should turn positive again, and short interest should decline, for the risk-reward profile to improve.
CounterElevated short interest combined with a bullish technical breakout raises the risk of a short squeeze if sentiment shifts.
TrendMatrix Research · core thesis
Engine thesis — one sentence
IBTA screens as cheap and free-cash-flow positive with a bullish technical breakout, but quality just below the engine's floor, heavy bearish insider selling, elevated short interest, and a negative risk-reward asymmetry argue for exiting the position.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.0 |
| Gross margin | 10.0 |
| Op margin | 0.0 |
| Net margin | 0.0 |
| Current ratio | 6.4 |
| FCF quality | 7.7 |
| Moat | 5.5 |
| Rule of 40 | 3.0 |
| Piotroski F | 6.7 |
- ▸FCF-positive despite GAAP loss (FCF margin 19%, FCF yield 7.7%)
- ▸Rule of 40: 16 (fail)
Growth
1.9/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 1.9 |
- ▸Declining revenue: -2%
Momentum
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 7.0 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 5.5 |
| erm sentiment | 5.0 |
Insider
3.0/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 2.0 |
| insider conviction | 2.0 |
| holder change | 5.0 |
- ▸Heavy insider selling — $5,610,896 (0.678% of mkt cap)
Peer rank
2.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.3 |
| quality rank | 2.6 |
| growth rank | 0.3 |
Technical
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.2 |
| support resistance | 3.8 |
| 52w position | 3.1 |
| gap | 5.0 |
Risk (lower is worse)
3.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 0.7 |
| days to cover | 0.0 |
| volatility | 0.0 |
| put call | 10.0 |
| implied vol | 0.0 |
| max pain risk | 3.0 |
| debt equity | 9.6 |
- ▸High short interest justified: 28%
- ▸High IV: 91%
- ▸Above max pain $25
Catalyst
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 5.8 |
- ▸Earnings concerns: 1B/3M
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (5)
- MOMENTUM:4.7>=4.5
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:38d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:-0.7=NEGATIVE
- INSIDER:0.68%=EXTREME
Warning (2)
- MOMENTUM:4.7<5.5 (soft — BUY_NOW allowed but watch)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.70
Upside
-10.4%
Downside
14.8%
Sizing output
AVOID
SetupRange Bound — RSI 53 mid-range, Bollinger mid-band
EdgeInst Constrain — Small cap ($0.8B) below institutional reach
SuitabilityAggressive — MCap $0.8B<$5B
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Value at 7.3 could not lift the engine output above the verdict floor. Failed gate signal: ASYMMETRY:-0.7=NEGATIVE.
The strongest dimensions are Value at 7.3, Sentiment at 5.2, and Momentum at 4.7; the weakest are Growth at 1.9, Peer rank at 2.5, and Insider at 3.0. The V9 engine flagged 2 failed gates with 2 warnings, producing an asymmetric reward-to-risk of -0.70 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Cheap Valuation Fcf Positive
Trip ifFree cash flow margin falls below 0% of revenue for 2 consecutive quarters, erasing the current FCF-positive cushion.
- P2Bullish Technical Breakout
Trip ifPrice closes below the 200-day moving average for more than 5 trading days, invalidating the breakout.
- P3Quality Below Investment Floor
Trip ifQuality score rises above 4.0, clearing the engine's minimum quality floor.
- P4Heavy Bearish Insider Selling
Trip ifInsider buy transactions rise to more than 5 over a 90-day period while exceeding sell count, reversing the current bearish signal.
- P5Elevated Short Interest And Negative Asymmetry
Trip ifShort interest falls below 15% of float and the asymmetry ratio rises above 0.0, improving the risk-reward profile.