Value
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.3 |
| P/S | 9.4 |
| EV/EBITDA | 6.2 |
| Fwd P/E | 8.7 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 13.0x
- ▸PEG: 0.23
- ▸Attractively valued
KTB · Why this verdict
Why Kontoor Brands (KTB) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score6.0/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
The business combines high financial quality — Piotroski F-Score of 8/9, 53% return on equity, and 45% year-over-year growth — with an attractively priced forward multiple of 12.3x; however, with the current price just 1.5% below the analyst consensus target and a reward-to-risk ratio of 0.21-to-1, the setup favors maintaining an existing position rather than adding new exposure.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
With the current price just 1.5% below the analyst consensus target, the reward-to-risk ratio has compressed to 0.21-to-1 — well below any meaningful asymmetry bar — leaving virtually no margin of safety for new capital at current levels. Price targets | Either a price pullback or upward analyst target revision restores upside headroom of at least 10% and a reward-to-risk ratio above 1.5-to-1. | Tripped↓Deteriorating |
| CounterIf the earnings miss proves to be a one-quarter outlier and the company returns to beating estimates, analysts may revise the consensus target higher — expanding the upside headroom beyond the current 1.5%. | ||
At a forward P/E of 12.3x with a PEG of 0.11 against 45% year-over-year growth, the stock screens as materially underpriced relative to its near-term earnings power — a rare combination of value and growth momentum in a quality name. Value | EPS growth of at least 20% is sustained over the next 12 months, keeping the forward multiple below 15x at current prices and validating the low PEG. | ↓Deteriorating |
| CounterA PEG of 0.11 may reflect near-term elevated earnings that are not durable; if growth decelerates from the current 45% level, the multiple would re-rate sharply upward, eroding the value thesis. | ||
A Piotroski F-Score of 8/9 and a 53% return on equity demonstrate that the business combines balance sheet discipline with strong capital efficiency, forming a durable quality foundation that underpins the high overall score. Quality | Piotroski F-Score remains at 7/9 or above and return on equity stays above 40% through the next four reporting quarters. | →Stable |
| CounterFree cash flow converts at roughly 74% of net income — below a one-to-one ratio — raising a flag that reported earnings may overstate the true cash-generative power of the business. | ||
Three of the last four quarters were beats — including a 46% positive surprise in the quarter three periods ago — but the most recent quarter came in 7% below consensus, breaking the delivery streak and introducing uncertainty about whether prior outperformance was durable. Earnings | EPS surprise turns positive in the next reporting quarter (due approximately July 30, 2026) and the beat streak resumes. | ↓Deteriorating |
| CounterA single miss following three strong beats — including a 46% positive surprise just three quarters ago — may represent a one-quarter fluctuation rather than a reversal of the underlying delivery trend. | ||
With the current price just 1.5% below the analyst consensus target, the reward-to-risk ratio has compressed to 0.21-to-1 — well below any meaningful asymmetry bar — leaving virtually no margin of safety for new capital at current levels.
Tripped↓DeterioratingPrice targets
- Expectation
- Either a price pullback or upward analyst target revision restores upside headroom of at least 10% and a reward-to-risk ratio above 1.5-to-1.
CounterIf the earnings miss proves to be a one-quarter outlier and the company returns to beating estimates, analysts may revise the consensus target higher — expanding the upside headroom beyond the current 1.5%.
At a forward P/E of 12.3x with a PEG of 0.11 against 45% year-over-year growth, the stock screens as materially underpriced relative to its near-term earnings power — a rare combination of value and growth momentum in a quality name.
↓DeterioratingValue
- Expectation
- EPS growth of at least 20% is sustained over the next 12 months, keeping the forward multiple below 15x at current prices and validating the low PEG.
CounterA PEG of 0.11 may reflect near-term elevated earnings that are not durable; if growth decelerates from the current 45% level, the multiple would re-rate sharply upward, eroding the value thesis.
A Piotroski F-Score of 8/9 and a 53% return on equity demonstrate that the business combines balance sheet discipline with strong capital efficiency, forming a durable quality foundation that underpins the high overall score.
→StableQuality
- Expectation
- Piotroski F-Score remains at 7/9 or above and return on equity stays above 40% through the next four reporting quarters.
CounterFree cash flow converts at roughly 74% of net income — below a one-to-one ratio — raising a flag that reported earnings may overstate the true cash-generative power of the business.
Three of the last four quarters were beats — including a 46% positive surprise in the quarter three periods ago — but the most recent quarter came in 7% below consensus, breaking the delivery streak and introducing uncertainty about whether prior outperformance was durable.
↓DeterioratingEarnings
- Expectation
- EPS surprise turns positive in the next reporting quarter (due approximately July 30, 2026) and the beat streak resumes.
CounterA single miss following three strong beats — including a 46% positive surprise just three quarters ago — may represent a one-quarter fluctuation rather than a reversal of the underlying delivery trend.
Per-dimension breakdown
Quality
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 8.7 |
| Gross margin | 5.9 |
| Op margin | 6.5 |
| Net margin | 3.9 |
| Current ratio | 6.5 |
| FCF quality | 10.0 |
| Moat | 5.0 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 50%
- ▸Excellent cash conversion: 168% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
Growth
5.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 0.0 |
| EPS growth | 10.0 |
- ▸Declining revenue: -11%
Momentum
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 0.7 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 5.9 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.5 |
| Analyst rating | 7.0 |
| Price target | 6.9 |
- ▸LLM news sentiment: +0.51 (n=5)
- ▸Light analyst coverage (10.0) — signal dampened
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Insider selling (low materiality) — $324,080 (0.007% of mkt cap)
- ▸Institutions accumulating
Peer rank
3.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.3 |
| quality rank | 8.2 |
| growth rank | 0.0 |
- ▸Superior ROE vs peers
Technical
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.6 |
| support resistance | 2.5 |
| 52w position | 9.1 |
Risk (lower is worse)
3.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 3.6 |
| days to cover | 2.9 |
| volatility | 2.5 |
| put call | 0.0 |
| implied vol | 3.5 |
| beta | 7.6 |
| debt equity | 2.9 |
- ▸Elevated put/call: 17.11
- ▸Concentration risks: 2 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| surprise avg | 2.9 |
| dividend safety | 5.8 |
| news activity | 8.0 |
- ▸Strong earnings: 3B/1M
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position. | News modifier +2 (SELL_IF_HOLDING → HOLD_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_F_SELL|L3:NEWS_MOD=+2Passed (8)
- MOMENTUM:6.2>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_BOOST:ANALYST:0.70
- NEWS_BOOST:ANALYST_CLUSTER(3)
- EARNINGS_PROXIMITY:NO_DATE
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.1=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.10
Upside
-1.2%
Downside
12.1%
Sizing output
AVOID
SetupRange Bound — RSI 48 mid-range, Bollinger mid-band
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $4.6B<$5B
Investment implication
The F-path SELL output reflects an overall score of 4.5 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 7.5) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.1=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.10 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 7.5, Insider at 7.3, and Quality at 7.1; the weakest are Risk (lower is worse) at 3.3, Peer rank at 3.3, and Growth at 5.0. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -0.10 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Attractive Valuation Low Peg
Trip ifEPS growth decelerates to below 15% YoY for 2 consecutive quarters, indicating the high-growth narrative driving the low multiple is fading.
- P2Strong Piotroski Quality
Trip ifPiotroski F-Score falls below 6 in any 2 of the next 3 reporting periods, signaling meaningful deterioration in financial health.
- P3Earnings Beat Streak Interrupted
Trip ifEPS surprise exceeds 3% for 2 consecutive quarters, confirming the delivery track record has recovered and the miss was an outlier.
- P4Target Reached Thin AsymmetryTripped
Trip ifUpside to analyst consensus target exceeds 10% (currently 1.5%), indicating price has retraced enough to restore a favorable reward-to-risk setup.