Value
8.9/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 8.6 |
| P/S | 10.0 |
| EV/EBITDA | 7.8 |
| Fwd P/E | 9.4 |
| PEG | 10.0 |
| Analyst target | 7.5 |
- ▸Forward P/E: 8.9x
- ▸PEG: 0.24
- ▸Attractively valued
JBS · Why this verdict
Why JBS (JBS) 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 score5.9/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
An attractively valued franchise trading at a forward price-to-earnings multiple of 7.4 times with 43.6% implied upside to the analyst target is constrained by business quality that falls just short of the minimum threshold, most critically evidenced by free cash flow at only 23% of reported net income—a gap that calls into question the reliability of stated profits.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Free cash flow represents only 23% of reported net income—flagged as a quality red flag—meaning the wide gap between stated earnings and actual cash generation raises serious questions about whether the reported profits are a reliable measure of economic performance. Quality breakdown | Free cash flow as a percentage of net income rises above 60% for two consecutive reporting periods, narrowing the gap between reported and cash earnings. | →Stable |
| CounterThe Piotroski financial health score of 7 out of 9 and a current ratio of 5.5 indicate the balance sheet is not in distress; the FCF shortfall may reflect a temporary working-capital or investment phase rather than a structural earnings quality problem. | ||
At a forward price-to-earnings multiple of 7.4 times and with analysts implying 43.6% upside to the consensus price target, the stock screens as attractively valued on both an absolute and a peer-relative basis, with a price-to-earnings ratio among the most compelling in the peer group. Valuation breakdown | Price appreciates at least 25% toward the analyst target within 12 months as the valuation discount narrows. | ↑Improving |
| CounterA low multiple can persist or compress further when quality is impaired; a business generating free cash flow at only 23% of net income may deserve a discounted multiple, and the 43.6% implied upside may require a quality improvement catalyst to be realized. | ||
The overall quality composite sits just below the minimum threshold required for a standard investment posture, meaning the business does not yet clear the bar that would support a full position even at an attractive valuation. Warnings | Quality composite improves above the minimum floor within two quarters, driven by improved cash conversion or operating margin expansion. | ↓Deteriorating |
| CounterThe quality score sits very close to the floor; a modest improvement in free cash flow conversion could push it above the threshold, at which point the deep valuation discount would become far more actionable. | ||
The stock is trading below its 200-day moving average with a flat slope, indicating that the longer-term trend has not yet turned constructive; price momentum remains soft and does not confirm the bullish fundamental and valuation case. Momentum breakdown | Price crosses and sustains above the 200-day moving average for at least 20 consecutive trading days, confirming a trend reversal. | ↓Deteriorating |
| CounterVolume accumulation is rising despite the price weakness, which can be a leading indicator of institutional buying ahead of a trend reversal; the technical picture may lag rather than lead the fundamental recovery. | ||
Free cash flow represents only 23% of reported net income—flagged as a quality red flag—meaning the wide gap between stated earnings and actual cash generation raises serious questions about whether the reported profits are a reliable measure of economic performance.
→StableQuality breakdown
- Expectation
- Free cash flow as a percentage of net income rises above 60% for two consecutive reporting periods, narrowing the gap between reported and cash earnings.
CounterThe Piotroski financial health score of 7 out of 9 and a current ratio of 5.5 indicate the balance sheet is not in distress; the FCF shortfall may reflect a temporary working-capital or investment phase rather than a structural earnings quality problem.
At a forward price-to-earnings multiple of 7.4 times and with analysts implying 43.6% upside to the consensus price target, the stock screens as attractively valued on both an absolute and a peer-relative basis, with a price-to-earnings ratio among the most compelling in the peer group.
↑ImprovingValuation breakdown
- Expectation
- Price appreciates at least 25% toward the analyst target within 12 months as the valuation discount narrows.
CounterA low multiple can persist or compress further when quality is impaired; a business generating free cash flow at only 23% of net income may deserve a discounted multiple, and the 43.6% implied upside may require a quality improvement catalyst to be realized.
The overall quality composite sits just below the minimum threshold required for a standard investment posture, meaning the business does not yet clear the bar that would support a full position even at an attractive valuation.
↓DeterioratingWarnings
- Expectation
- Quality composite improves above the minimum floor within two quarters, driven by improved cash conversion or operating margin expansion.
CounterThe quality score sits very close to the floor; a modest improvement in free cash flow conversion could push it above the threshold, at which point the deep valuation discount would become far more actionable.
The stock is trading below its 200-day moving average with a flat slope, indicating that the longer-term trend has not yet turned constructive; price momentum remains soft and does not confirm the bullish fundamental and valuation case.
↓DeterioratingMomentum breakdown
- Expectation
- Price crosses and sustains above the 200-day moving average for at least 20 consecutive trading days, confirming a trend reversal.
CounterVolume accumulation is rising despite the price weakness, which can be a leading indicator of institutional buying ahead of a trend reversal; the technical picture may lag rather than lead the fundamental recovery.
Per-dimension breakdown
Quality
3.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.5 |
| ROA | 3.3 |
| Gross margin | 0.0 |
| Op margin | 1.2 |
| Net margin | 0.6 |
| Current ratio | 5.6 |
| FCF quality | 5.6 |
| Moat | 5.4 |
| Piotroski F | 7.8 |
- ▸Earnings quality warning: 74% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
Growth
7.6/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.9 |
| EPS growth | 9.3 |
Momentum
3.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.9 |
| MACD | 2.7 |
| OBV | 1.0 |
| MA position | 6.5 |
| Volume | 2.6 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope flat
Sentiment
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 4.2 |
| Analyst rating | 7.2 |
| Price target | 8.9 |
- ▸Analyst upside: 35%
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
4.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.5 |
| quality rank | 4.1 |
| growth rank | 6.9 |
Technical
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.8 |
| support resistance | 4.0 |
| 52w position | 5.2 |
Risk (lower is worse)
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 2.6 |
| days to cover | 3.5 |
| volatility | 2.0 |
| put call | 4.4 |
| implied vol | 5.4 |
| max pain risk | 3.0 |
| debt equity | 2.2 |
| news risk | 6.0 |
- ▸Above max pain $5
Catalyst
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| dividend safety | 4.0 |
| news activity | 8.0 |
- ▸Earnings concerns: 2B/2M
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (7)
- ASYMMETRY:1.5>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_BOOST:ANALYST:0.40
- EARNINGS_PROXIMITY:88d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:3.3<4.5
- DEATH_CROSS:HARD_BLOCK
Warning (0)
none
Reward-to-Risk
1.50
Upside
+17.8%
Downside
11.9%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The SELL_IF_HOLDING verdict reflects the MOMENTUM gate's 3.3<4.5 outcome against Value at 8.9 and asymmetric R:R of 1.50.
The strongest dimensions are Value at 8.9, Growth at 7.6, and Insider at 7.3; the weakest are Momentum at 3.3, Risk (lower is worse) at 3.6, and Quality at 3.8. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of 1.50 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Deep Value Large Analyst Upside
Trip ifForward EPS estimates are cut by more than 25%, removing the attractively valued designation by pushing the implied multiple above 10x.
- P2Fcf Earnings Quality Red Flag
Trip ifFree cash flow as a percentage of net income rises above 60% for 2 consecutive reporting periods.
- P3Quality Below Minimum Threshold
Trip ifQuality composite score rises above 4.0, clearing the minimum threshold within 2 quarters.
- P4Price Below 200 Day Trend
Trip ifPrice crosses above the 200-day moving average and holds for more than 20 consecutive trading days.