Value
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 3.9 |
| P/S | 7.6 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 6.4 |
| PEG | 4.6 |
| Analyst target | 6.0 |
- ▸Forward P/E: 20.2x
- ▸PEG: 1.93
ITT · Why this verdict
Why ITT (ITT) 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 score5.4/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company has beaten consensus EPS estimates in each of the last 4 quarters, with the most recent quarter delivering a 14% positive surprise and the 4-quarter average at roughly 6.7% above estimates — suggesting disciplined guidance and consistent operational execution. Earnings | EPS beats continue in each of the next 2 quarters and the average positive surprise remains above 5%. | →Stable |
| CounterInternational revenues represent 65% of the business, creating exposure to currency headwinds or regional demand softness that could interrupt the beat streak without signaling fundamental deterioration in the domestic business. | ||
Revenue growth of 33% year-over-year positions the company as the growth leader in its peer group — the strongest growth rate among comparable industrials — providing a durable near-term fundamental tailwind. Growth breakdown | Revenue growth remains above 20% year-over-year for at least the next 2 quarters, sustaining the top-tier peer ranking. | →Stable |
| CounterAt a forward P/E of 21x and PEG of 2.01, the market has priced in significant continued growth; even a deceleration to healthy double-digit rates could compress the multiple as the growth premium narrows. | ||
The stock is trading above its 200-day moving average with rising on-balance volume — indicating that buying interest is building on a volume-flow basis — supporting a technically constructive backdrop for the current position. Momentum breakdown | On-balance volume continues to rise and the stock holds above its 200-day moving average through the next earnings report scheduled for July 2026. | →Stable |
| CounterAn elevated put/call ratio of 1.72 shows that options participants are buying meaningful protection, which may reflect institutional caution about a near-term reversal even as the price trend remains intact. | ||
Free cash flow is converting at approximately 55 cents per dollar of reported net income — a below-average conversion rate that flags a gap between accounting earnings and cash generation, and warrants monitoring to confirm earnings quality holds. Quality breakdown | FCF as a percentage of net income rises above 80% over the next 2 reporting periods, demonstrating that cash conversion is improving. | →Stable |
| CounterA Piotroski F-Score of 7 out of 9 and strong operating margins suggest balance-sheet health remains sound; the conversion gap may reflect working-capital timing rather than structural earnings-quality degradation. | ||
The company has beaten consensus EPS estimates in each of the last 4 quarters, with the most recent quarter delivering a 14% positive surprise and the 4-quarter average at roughly 6.7% above estimates — suggesting disciplined guidance and consistent operational execution.
→StableEarnings
- Expectation
- EPS beats continue in each of the next 2 quarters and the average positive surprise remains above 5%.
CounterInternational revenues represent 65% of the business, creating exposure to currency headwinds or regional demand softness that could interrupt the beat streak without signaling fundamental deterioration in the domestic business.
Revenue growth of 33% year-over-year positions the company as the growth leader in its peer group — the strongest growth rate among comparable industrials — providing a durable near-term fundamental tailwind.
→StableGrowth breakdown
- Expectation
- Revenue growth remains above 20% year-over-year for at least the next 2 quarters, sustaining the top-tier peer ranking.
CounterAt a forward P/E of 21x and PEG of 2.01, the market has priced in significant continued growth; even a deceleration to healthy double-digit rates could compress the multiple as the growth premium narrows.
The stock is trading above its 200-day moving average with rising on-balance volume — indicating that buying interest is building on a volume-flow basis — supporting a technically constructive backdrop for the current position.
→StableMomentum breakdown
- Expectation
- On-balance volume continues to rise and the stock holds above its 200-day moving average through the next earnings report scheduled for July 2026.
CounterAn elevated put/call ratio of 1.72 shows that options participants are buying meaningful protection, which may reflect institutional caution about a near-term reversal even as the price trend remains intact.
Free cash flow is converting at approximately 55 cents per dollar of reported net income — a below-average conversion rate that flags a gap between accounting earnings and cash generation, and warrants monitoring to confirm earnings quality holds.
→StableQuality breakdown
- Expectation
- FCF as a percentage of net income rises above 80% over the next 2 reporting periods, demonstrating that cash conversion is improving.
CounterA Piotroski F-Score of 7 out of 9 and strong operating margins suggest balance-sheet health remains sound; the conversion gap may reflect working-capital timing rather than structural earnings-quality degradation.
TrendMatrix Research · core thesis
Engine thesis — one sentence
ITT has delivered a perfect earnings beat record across the last 4 quarters, including a 14% positive surprise in the most recent period, and 33% year-over-year revenue growth has established it as the growth leader among its industry peers. With approximately 9% upside to the analyst-based target and a roughly 2.2-to-1 reward-to-risk ratio, the setup supports a small initial position, tempered by free cash flow converting at only 55 cents per dollar of net income and an elevated put/call ratio.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.1 |
| ROA | 4.0 |
| Gross margin | 3.1 |
| Op margin | 6.8 |
| Net margin | 5.4 |
| Current ratio | 5.6 |
| FCF quality | 4.4 |
| Moat | 6.1 |
| Piotroski F | 7.8 |
- ▸Earnings quality warning: 55% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
5.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 0.0 |
- ▸Strong growth: 33% YoY
Momentum
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 0.2 |
| OBV | 9.6 |
| MA position | 4.0 |
| Volume | 2.1 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 8.4 |
| Price target | 8.5 |
| erm sentiment | 5.5 |
- ▸Analyst upside: 29%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.0 |
- ▸Insider selling (low materiality) — $1,525,209 (0.009% of mkt cap)
Peer rank
4.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.9 |
| quality rank | 5.4 |
| growth rank | 9.1 |
- ▸Industry growth leader
Technical
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 6.2 |
| support resistance | 6.2 |
| 52w position | 6.9 |
Risk (lower is worse)
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.3 |
| days to cover | 2.4 |
| volatility | 3.9 |
| put call | 10.0 |
| implied vol | 4.6 |
| beta | 5.9 |
| debt equity | 6.0 |
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 5.8 |
| dividend safety | 5.2 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 83.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- ASYMMETRY:1.8>=1.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:24d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- MOMENTUM:4.3<4.5
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
1.82
Upside
+12.6%
Downside
6.9%
Sizing output
AVOID
SetupRange Bound — RSI 51 mid-range, Bollinger mid-band
EdgeCatalyst-Driven — Earnings in 24d with 4/4 beat streak
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.4 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Sentiment at 7.6) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:4.3<4.5) reinforce the read. Current asymmetry R:R is 1.82 — supplementary context, not the trigger for this path.
The strongest dimensions are Sentiment at 7.6, Technical at 6.4, and Catalyst at 6.2; the weakest are Momentum at 4.3, Peer rank at 4.8, and Value at 4.9. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 1.82 and an engine sizing output of AVOID.
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.
- P2Industry Leading Revenue Growth
Trip ifRevenue growth falls below 15% year-over-year for 2 consecutive quarters.
- P3Strong Momentum Volume Confirmation
Trip ifStock closes below its 200-day moving average and RSI drops below 40 for 4 consecutive weeks.
- P4Fcf Below Reported Earnings
Trip ifFCF as a percentage of net income rises above 80% for 2 consecutive quarters.