Value
8.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 8.4 |
| P/S | 10.0 |
| EV/EBITDA | 8.5 |
| Fwd P/E | 9.6 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 7.6x
- ▸PEG: 0.06
- ▸Attractively valued
LEA · Why this verdict
Why Lear (LEA) is rated SELL
Updated
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VerdictSELL
Overall score5.7/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Revenue has declined roughly 10% year-over-year alongside a debt-to-equity of 1.6, a combination that compresses financial flexibility and raises the probability that the low valuation multiple reflects structural rather than cyclical headwinds. Bear case | Revenue growth turns positive and exceeds 3% year-over-year for 2 consecutive quarters while debt-to-equity falls below 1.4. | →Stable |
| CounterEarnings growth has still managed to outpace revenue trends, suggesting efficiency improvements or favorable mix-shift are partially offsetting top-line pressure — if that margin dynamic holds, the leverage concern may not crystallize. | ||
The company's quality metrics sit exactly at the minimum acceptable floor, with no identified competitive moat and an overall financial profile that leaves little buffer if operating conditions deteriorate further. Quality breakdown | Piotroski F-Score improves above 8 out of 9 and operating margins expand for 2 consecutive quarters, signaling a meaningful quality recovery. | →Stable |
| CounterA Piotroski F-Score of 7 out of 9 indicates balance sheet mechanics are healthier than the moat assessment alone implies, suggesting the quality picture is mixed rather than uniformly weak. | ||
With just 1.5% headroom to the price target and a reward-to-risk ratio of 0.23-to-1, the current geometry places far more expected loss than gain — removing the margin of safety that new commitment requires. Warnings | Consensus analyst price targets are revised upward to more than 10% above the current price of $144.44 — specifically above $159 — restoring a geometry that supports reentry. | →Stable |
| CounterThe company has beaten estimates in 3 of the last 4 quarters, with the two most recent quarters delivering beats of 10% and 22%; sustained outperformance could prompt upward target revisions that restore upside geometry without a price pullback. | ||
With the momentum score at the floor of the minimum gate threshold, on-balance volume declining, and the price action range-bound with no clear catalyst, the weight of technical evidence leans toward distribution rather than accumulation. Momentum breakdown | RSI rises above 60 from the current level of 53 and on-balance volume turns positive for more than 30 consecutive days. | →Stable |
| CounterRSI near 53 is technically neutral — neither overbought nor oversold — and the stock's position above the 200-day moving average means the trend has not broken down; a modest positive catalyst could shift the balance quickly. | ||
Revenue has declined roughly 10% year-over-year alongside a debt-to-equity of 1.6, a combination that compresses financial flexibility and raises the probability that the low valuation multiple reflects structural rather than cyclical headwinds.
→StableBear case
- Expectation
- Revenue growth turns positive and exceeds 3% year-over-year for 2 consecutive quarters while debt-to-equity falls below 1.4.
CounterEarnings growth has still managed to outpace revenue trends, suggesting efficiency improvements or favorable mix-shift are partially offsetting top-line pressure — if that margin dynamic holds, the leverage concern may not crystallize.
The company's quality metrics sit exactly at the minimum acceptable floor, with no identified competitive moat and an overall financial profile that leaves little buffer if operating conditions deteriorate further.
→StableQuality breakdown
- Expectation
- Piotroski F-Score improves above 8 out of 9 and operating margins expand for 2 consecutive quarters, signaling a meaningful quality recovery.
CounterA Piotroski F-Score of 7 out of 9 indicates balance sheet mechanics are healthier than the moat assessment alone implies, suggesting the quality picture is mixed rather than uniformly weak.
With just 1.5% headroom to the price target and a reward-to-risk ratio of 0.23-to-1, the current geometry places far more expected loss than gain — removing the margin of safety that new commitment requires.
→StableWarnings
- Expectation
- Consensus analyst price targets are revised upward to more than 10% above the current price of $144.44 — specifically above $159 — restoring a geometry that supports reentry.
CounterThe company has beaten estimates in 3 of the last 4 quarters, with the two most recent quarters delivering beats of 10% and 22%; sustained outperformance could prompt upward target revisions that restore upside geometry without a price pullback.
With the momentum score at the floor of the minimum gate threshold, on-balance volume declining, and the price action range-bound with no clear catalyst, the weight of technical evidence leans toward distribution rather than accumulation.
→StableMomentum breakdown
- Expectation
- RSI rises above 60 from the current level of 53 and on-balance volume turns positive for more than 30 consecutive days.
CounterRSI near 53 is technically neutral — neither overbought nor oversold — and the stock's position above the 200-day moving average means the trend has not broken down; a modest positive catalyst could shift the balance quickly.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Lear Corporation's stock has reached and nearly exhausted its calculated price target — leaving the reward-to-risk geometry at 0.23-to-1 — while declining revenue, elevated leverage, and quality metrics sitting exactly at the minimum acceptable floor combine to limit the investment case for new commitment.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.1 |
| ROA | 3.0 |
| Gross margin | 0.0 |
| Op margin | 2.0 |
| Net margin | 1.1 |
| Current ratio | 5.0 |
| FCF quality | 7.8 |
| Moat | 5.0 |
| Piotroski F | 7.8 |
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
Growth
6.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.7 |
| EPS growth | 10.0 |
Momentum
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 8.4 |
| MACD | 0.0 |
| OBV | 6.2 |
| MA position | 4.0 |
| Volume | 1.6 |
- ▸Oversold in uptrend (RSI 24)
- ▸Above 200-day MA
Sentiment
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.2 |
| Price target | 6.9 |
| erm sentiment | 5.5 |
Insider
3.4/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 2.0 |
| holder change | 5.1 |
- ▸Notable insider selling — $9,240,688 (0.141% of mkt cap)
Peer rank
4.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 8.5 |
| quality rank | 5.4 |
| growth rank | 3.4 |
- ▸Attractive P/E vs peers
Technical
7.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 9.5 |
| support resistance | 9.1 |
| 52w position | 7.5 |
| gap | 5.0 |
Risk (lower is worse)
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.1 |
| days to cover | 7.7 |
| volatility | 5.2 |
| put call | 0.0 |
| implied vol | 3.9 |
| beta | 6.0 |
| debt equity | 7.0 |
- ▸Elevated put/call: 2.00
- ▸Concentration risks: 2 MED (10-K Item 1A)
Catalyst
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 7.1 |
| dividend safety | 6.0 |
- ▸Strong earnings: 3B/0M
- ▸Dividend: 235.0%
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:28d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:4.0<4.5
- ASYMMETRY:-0.2=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.25
Upside
-1.5%
Downside
5.8%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeCatalyst-Driven — Earnings in 28d with 3/4 beat streak
SuitabilityModerate — Balanced profile
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Value at 8.3 could not lift the engine output above the verdict floor. Failed gate signal: MOMENTUM:4.0<4.5.
The strongest dimensions are Value at 8.3, Technical at 7.8, and Growth at 6.8; the weakest are Insider at 3.4, Momentum at 4.0, and Quality at 4.0. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -0.25 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Price At Target Negative Geometry
Trip ifConsensus analyst price target is revised above $159 — more than 10% above the current price of $144.44 — within 2 quarters.
- P2Revenue Decline High Leverage
Trip ifRevenue growth turns positive and exceeds 3% year-over-year for 2 consecutive quarters.
- P3Quality At Minimum Threshold
Trip ifPiotroski F-Score rises above 8 out of 9 for 2 consecutive quarters.
- P4Momentum At Gate Floor
Trip ifRSI rises above 60 from the current level of 53 and on-balance volume turns positive for more than 30 consecutive days.