Value
7.9/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.3 |
| P/S | 10.0 |
| EV/EBITDA | 10.0 |
| Fwd P/E | 8.4 |
| PEG | 10.0 |
| Analyst target | 6.0 |
- ▸Forward P/E: 13.9x
- ▸PEG: 0.32
- ▸Attractively valued
LOMA · Why this verdict
Why Loma Negra Compania Industrial (LOMA) 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 score5.6/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
This building materials company offers an optically attractive forward valuation, but the investment case is undermined by free cash flow that is deeply negative relative to reported net income, two consecutive significant earnings misses, and a quality profile that falls below the minimum threshold — factors that together support exiting the position.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
At a forward price-to-earnings multiple of 15.0 times and a price-to-earnings-to-growth ratio of 0.34, the stock screens as attractively priced on paper — a discount that could reward investors if the underlying cash generation profile improves. Valuation breakdown | Free cash flow turns positive for 2 consecutive quarters, converting the forward valuation discount into one supported by real cash generation. | Tripped→Stable |
| CounterThe apparent cheapness may be misleading because reported earnings are not converting into cash — free cash flow is deeply negative relative to net income — meaning the business looks better on an earnings multiple basis than on the cash it actually generates. | ||
Free cash flow is deeply negative, running at approximately negative 238% of net income — meaning the business is consuming far more cash than it reports in earnings, which is a significant red flag for earnings quality and financial sustainability. Quality breakdown | Free cash flow turns positive and cash conversion of net income rises above 50% for 2 consecutive quarters. | →Stable |
| CounterThe Piotroski financial health score is 8 out of 9, suggesting that balance sheet health indicators outside of cash conversion remain broadly positive — the negative free cash flow may reflect a temporary investment or working capital cycle rather than structural impairment. | ||
The two most recent reported quarters both missed analyst consensus significantly — the most recent by roughly 83% and the quarter before by approximately 139% — reflecting a pattern of poor delivery against expectations. Earnings | The company beats or meets consensus EPS estimates in each of the next 2 reported quarters, ending the miss streak. | →Stable |
| CounterEarnings variability has been high historically, with large positive surprises recorded in earlier periods — suggesting the business can swing sharply in both directions and a recovery beat in the near term is within the range of historical outcomes. | ||
The overall quality assessment at 3.6 falls below the 4.0 minimum threshold required to justify holding a position, and the business carries no identifiable competitive moat — a combination that makes durable return generation through a downturn unlikely. Warnings | Quality score rises above 4.0 through improvement in cash conversion and returns over the next 2 assessment periods. | ↑Improving |
| CounterMomentum and macro-cycle gate checks are passing, and the stock has recently set up above all moving averages in a technical breakout pattern — if macro conditions improve, operating leverage in a building materials business could lift quality metrics faster than the current assessment suggests. | ||
At a forward price-to-earnings multiple of 15.0 times and a price-to-earnings-to-growth ratio of 0.34, the stock screens as attractively priced on paper — a discount that could reward investors if the underlying cash generation profile improves.
Tripped→StableValuation breakdown
- Expectation
- Free cash flow turns positive for 2 consecutive quarters, converting the forward valuation discount into one supported by real cash generation.
CounterThe apparent cheapness may be misleading because reported earnings are not converting into cash — free cash flow is deeply negative relative to net income — meaning the business looks better on an earnings multiple basis than on the cash it actually generates.
Free cash flow is deeply negative, running at approximately negative 238% of net income — meaning the business is consuming far more cash than it reports in earnings, which is a significant red flag for earnings quality and financial sustainability.
→StableQuality breakdown
- Expectation
- Free cash flow turns positive and cash conversion of net income rises above 50% for 2 consecutive quarters.
CounterThe Piotroski financial health score is 8 out of 9, suggesting that balance sheet health indicators outside of cash conversion remain broadly positive — the negative free cash flow may reflect a temporary investment or working capital cycle rather than structural impairment.
The two most recent reported quarters both missed analyst consensus significantly — the most recent by roughly 83% and the quarter before by approximately 139% — reflecting a pattern of poor delivery against expectations.
→StableEarnings
- Expectation
- The company beats or meets consensus EPS estimates in each of the next 2 reported quarters, ending the miss streak.
CounterEarnings variability has been high historically, with large positive surprises recorded in earlier periods — suggesting the business can swing sharply in both directions and a recovery beat in the near term is within the range of historical outcomes.
The overall quality assessment at 3.6 falls below the 4.0 minimum threshold required to justify holding a position, and the business carries no identifiable competitive moat — a combination that makes durable return generation through a downturn unlikely.
↑ImprovingWarnings
- Expectation
- Quality score rises above 4.0 through improvement in cash conversion and returns over the next 2 assessment periods.
CounterMomentum and macro-cycle gate checks are passing, and the stock has recently set up above all moving averages in a technical breakout pattern — if macro conditions improve, operating leverage in a building materials business could lift quality metrics faster than the current assessment suggests.
Per-dimension breakdown
Quality
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.1 |
| ROA | 2.0 |
| Gross margin | 0.3 |
| Op margin | 5.6 |
| Net margin | 2.1 |
| Current ratio | 7.0 |
| FCF quality | 0.0 |
| Moat | 5.2 |
| Piotroski F | 8.9 |
- ▸Earnings quality RED FLAG: -238% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 8/9
Growth
6.4/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.8 |
| EPS growth | 10.0 |
Momentum
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 3.9 |
| OBV | 4.8 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Above 200-day MA
Sentiment
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 8.4 |
| erm sentiment | 5.0 |
- ▸Analyst upside: 28%
Insider
5.0/10data confidence 50%Peer rank
4.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.0 |
| quality rank | 1.8 |
| growth rank | 0.7 |
- ▸Conservative debt levels
Technical
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.5 |
| support resistance | 5.2 |
| 52w position | 7.5 |
Risk (lower is worse)
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.4 |
| days to cover | 6.9 |
| volatility | 2.4 |
| beta | 8.8 |
| debt equity | 9.0 |
Catalyst
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 1.1 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
- ▸Earnings concerns: 1B/2M
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (7)
- MOMENTUM:4.6>=4.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:16d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:1.4<1.5@spot
Warning (1)
- MOMENTUM:4.6<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
1.36
Upside
+11.0%
Downside
8.1%
Sizing output
AVOID
SetupRange Bound — RSI 51 mid-range, Bollinger mid-band
EdgeInst Constrain — Small cap ($1.3B) below institutional reach
SuitabilityAggressive — MCap $1.3B<$5B
Investment implication
The SELL_IF_HOLDING verdict reflects the ASYMMETRY gate's 1.4<1.5@spot outcome against Value at 7.9 and asymmetric R:R of 1.36.
The strongest dimensions are Value at 7.9, Risk (lower is worse) at 7.1, and Growth at 6.4; the weakest are Quality at 3.6, Peer rank at 4.0, and Momentum at 4.6. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 1.36 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Optically Attractive ValuationTripped
Trip ifForward P/E expands above 22x due to downward earnings estimate revisions.
- P2Deeply Negative Free Cash Flow
Trip ifFree cash flow rises above $0 for 2 consecutive quarters, indicating the approximately negative 238%-of-net-income cash drain has stabilized and the earnings-quality concern has resolved.
- P3Consecutive Earnings Misses
Trip ifEPS surprise exceeds 5% for each of the next 2 consecutive reported quarters.
- P4Quality Below Investment Floor
Trip ifQuality score rises above 4.0 in 2 consecutive assessment periods.