Value
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.4 |
| P/S | 6.8 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 5.4 |
| PEG | 10.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 23.6x
- ▸PEG: 0.20
KN · Why this verdict
Why Knowles (KN) 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 score5.5/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Approximately 76% of revenues flow from just five customers, creating a structurally fragile revenue base — a material reduction in business from any single key account could have a disproportionate impact on reported results and the growth narrative. Bear case | Top-five customer revenue concentration declines below 65% over the next four reported quarters as new customer relationships are established. | →Stable |
| CounterHigh concentration among a small number of sophisticated customers in this industry can reflect deep technical integration and long product-design cycles that make switching costly; if these relationships are entrenched, the concentration signals partnership depth rather than customer dependency risk. | ||
After an in-line quarter at the oldest point in the lookback, the company has delivered three consecutive earnings beats — with the most recent coming in approximately 14% above estimates — indicating a disciplined guidance practice and steady operational delivery. Earnings | Earnings beats continue in at least three of the next four reported quarters, extending the streak. | →Stable |
| CounterBeat margins have varied between roughly 2% and 14% across the three recent quarters; the narrower beats may reflect estimates catching up to actual performance, making consistent outperformance harder to sustain as the guidance bar resets higher. | ||
A golden cross pattern — shorter-term moving averages crossing above longer-term ones — combined with RSI at 62 and a constructive MACD configuration signals that price momentum is firmly positive and the technical trend is intact. Engine gate (passed) | Price remains above the 200-day moving average with RSI holding between 50 and 75 for at least 60 consecutive days. | →Stable |
| CounterThe stock already trades above its near-term resistance target, meaning the breakout may be fully priced; at current levels there is more measured downside than remaining upside to target, limiting the practical value of the technical setup for new entrants. | ||
The stock trades above its near-term resistance target with downside to support exceeding upside to the target — a configuration where new buyers absorb more risk than available reward, making current price levels an unattractive entry point even for a fundamentally sound business. Engine gate (failed) | The stock pulls back enough to provide at least 10% upside to the near-term target, or analyst price targets advance to restore favorable asymmetry. | →Stable |
| CounterThe very low put/call ratio below 0.2 reflects near-universal near-term bullishness among options market participants; if this sentiment continues to draw buyers, the stock could extend above the current target while analysts revise targets upward, making the current entry look prescient in hindsight. | ||
Approximately 76% of revenues flow from just five customers, creating a structurally fragile revenue base — a material reduction in business from any single key account could have a disproportionate impact on reported results and the growth narrative.
→StableBear case
- Expectation
- Top-five customer revenue concentration declines below 65% over the next four reported quarters as new customer relationships are established.
CounterHigh concentration among a small number of sophisticated customers in this industry can reflect deep technical integration and long product-design cycles that make switching costly; if these relationships are entrenched, the concentration signals partnership depth rather than customer dependency risk.
After an in-line quarter at the oldest point in the lookback, the company has delivered three consecutive earnings beats — with the most recent coming in approximately 14% above estimates — indicating a disciplined guidance practice and steady operational delivery.
→StableEarnings
- Expectation
- Earnings beats continue in at least three of the next four reported quarters, extending the streak.
CounterBeat margins have varied between roughly 2% and 14% across the three recent quarters; the narrower beats may reflect estimates catching up to actual performance, making consistent outperformance harder to sustain as the guidance bar resets higher.
A golden cross pattern — shorter-term moving averages crossing above longer-term ones — combined with RSI at 62 and a constructive MACD configuration signals that price momentum is firmly positive and the technical trend is intact.
→StableEngine gate (passed)
- Expectation
- Price remains above the 200-day moving average with RSI holding between 50 and 75 for at least 60 consecutive days.
CounterThe stock already trades above its near-term resistance target, meaning the breakout may be fully priced; at current levels there is more measured downside than remaining upside to target, limiting the practical value of the technical setup for new entrants.
The stock trades above its near-term resistance target with downside to support exceeding upside to the target — a configuration where new buyers absorb more risk than available reward, making current price levels an unattractive entry point even for a fundamentally sound business.
→StableEngine gate (failed)
- Expectation
- The stock pulls back enough to provide at least 10% upside to the near-term target, or analyst price targets advance to restore favorable asymmetry.
CounterThe very low put/call ratio below 0.2 reflects near-universal near-term bullishness among options market participants; if this sentiment continues to draw buyers, the stock could extend above the current target while analysts revise targets upward, making the current entry look prescient in hindsight.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Three consecutive earnings beats, a confirmed breakout technical setup, and solid business quality metrics present a fundamentally sound profile, but the stock already trades above its near-term resistance target with downside exceeding upside and high customer concentration representing a structural vulnerability that could impair the earnings stream.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.7 |
| ROA | 3.4 |
| Gross margin | 5.0 |
| Op margin | 4.7 |
| Net margin | 4.6 |
| Current ratio | 9.7 |
| FCF quality | 6.1 |
| Moat | 7.1 |
| Piotroski F | 10.0 |
- ▸Strong Piotroski F-Score: 9/9
Growth
8.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 6.5 |
| EPS growth | 10.0 |
Momentum
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 0.0 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 0.5 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 4.8 |
| erm sentiment | 5.0 |
Insider
3.4/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 2.0 |
| holder change | 5.1 |
- ▸Notable insider selling — $5,809,157 (0.185% of mkt cap)
Peer rank
3.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.8 |
| quality rank | 5.2 |
| growth rank | 4.1 |
Technical
8.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 9.8 |
| support resistance | 9.6 |
| 52w position | 7.1 |
Risk (lower is worse)
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.0 |
| days to cover | 7.2 |
| volatility | 0.0 |
| put call | 6.7 |
| implied vol | 0.5 |
| beta | 4.6 |
| debt equity | 9.2 |
- ▸High IV: 77%
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 5.8 |
- ▸Strong earnings: 3B/0M
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:20d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:4.4<4.5
- ASYMMETRY:-1.5=NEGATIVE
Warning (0)
none
Reward-to-Risk
-1.49
Upside
-16.2%
Downside
10.9%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeCatalyst-Driven — Earnings in 20d with 3/4 beat streak
SuitabilityAggressive — Beta 1.61>1.3, MCap $3.1B<$5B
Investment implication
The F-path SELL output reflects an overall score of 5.5 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Technical at 8.8) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:4.4<4.5, ASYMMETRY:-1.5=NEGATIVE) reinforce the read. Current asymmetry R:R is -1.49 — supplementary context, not the trigger for this path.
The strongest dimensions are Technical at 8.8, Growth at 8.2, and Catalyst at 6.5; the weakest are Peer rank at 3.3, Insider at 3.4, and Momentum at 4.4. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -1.49 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Consistent Earnings Execution
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P2Breakout Technical Momentum
Trip ifPrice breaks below the 200-day moving average and closes below it for more than 10 consecutive sessions.
- P3Customer Concentration Revenue Fragility
Trip ifTop-5 customer revenue concentration falls below 60% for 2 consecutive reported quarters, demonstrating meaningful customer diversification.
- P4Above Target Unfavorable Entry
Trip ifStock rises more than 15% from current levels within 90 days, demonstrating the above-target entry did not constrain additional appreciation.