Value
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 1.7 |
| P/S | 8.9 |
| EV/EBITDA | 1.3 |
| Fwd P/E | 6.2 |
| PEG | 10.0 |
| Analyst target | 6.0 |
- ▸Forward P/E: 20.6x
- ▸PEG: 0.09
LPX · Why this verdict
Why Louisiana-Pacific (LPX) 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 score5.0/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The business scores 3.4 out of 10 on quality — below the 4.0 minimum threshold — with no competitive moat and thin margins across returns and profitability metrics, disqualifying the stock from new investment consideration. Quality breakdown | Gross margin turns positive and the overall quality score rises above 4.0 and sustains for at least 2 consecutive quarters before the stock meets the minimum investable standard. | →Stable |
| CounterThe Piotroski financial health score of 7 out of 9 is a constructive signal reflecting balance-sheet stability and improving financial conditions even in the absence of a competitive moat; near-term balance-sheet resilience may be understated by the overall quality composite. | ||
Free cash flow is negative — the most recent period shows free cash flow at -80% relative to reported net income — meaning the business is consuming more cash than it generates and reported earnings overstate economic value creation. Quality breakdown | Free cash flow turns positive and remains above zero for 2 consecutive quarters, demonstrating the business can self-fund rather than requiring external capital. | →Stable |
| CounterNegative free cash flow in a building-products business can reflect deliberate inventory build or capital investment ahead of a demand recovery; if volumes recover, operating leverage could normalize cash generation quickly without a change in underlying profitability. | ||
Revenue is declining at 21% year-over-year — a steep contraction that places the business at the floor of its peer group for growth and signals a significant loss of volume or pricing power in the underlying market. Growth breakdown | Revenue growth turns positive and exceeds 0% year-over-year for 2 consecutive quarters, indicating the contraction phase has ended. | →Stable |
| CounterThe two most recent quarterly earnings beats — each with a large positive surprise — suggest that cost discipline or favorable mix is driving earnings recovery even as revenue contracts; if the volume cycle turns, revenue inflection could follow earnings improvement with a one-to-two quarter lag. | ||
With only 3.1% headroom to the analyst take-profit target from the current price and a risk/reward ratio of 0.44 — well below the 1.5-to-1 minimum — the geometric setup is unfavorable and the asymmetry gate fails at current spot. Price targets | The analyst consensus price target rises above $90, restoring at least 16% upside from the current level and creating a viable entry setup. | →Stable |
| CounterThe unfavorable geometry reflects price proximity to the resistance target, not a fundamentally deteriorating business; a pullback to near $68 would restore a more favorable ratio without requiring any improvement in fundamentals. | ||
The momentum dimension scores 6.4 out of 10, with MACD improving, on-balance volume accumulating, and the near-term technical recovery setup in place — suggesting that short-term buying interest is building even as the longer-term trend remains negative. Momentum breakdown | Price crosses and holds above the 200-day moving average for 2 consecutive months, confirming the short-term momentum improvement has translated into a sustained trend reversal. | →Stable |
| CounterRising on-balance volume and improving MACD in a stock carrying a death-cross warning and trading below its 200-day moving average can reflect temporary short-covering rather than genuine accumulation; absent fundamental recovery, the momentum signal may prove transient. | ||
The business scores 3.4 out of 10 on quality — below the 4.0 minimum threshold — with no competitive moat and thin margins across returns and profitability metrics, disqualifying the stock from new investment consideration.
→StableQuality breakdown
- Expectation
- Gross margin turns positive and the overall quality score rises above 4.0 and sustains for at least 2 consecutive quarters before the stock meets the minimum investable standard.
CounterThe Piotroski financial health score of 7 out of 9 is a constructive signal reflecting balance-sheet stability and improving financial conditions even in the absence of a competitive moat; near-term balance-sheet resilience may be understated by the overall quality composite.
Free cash flow is negative — the most recent period shows free cash flow at -80% relative to reported net income — meaning the business is consuming more cash than it generates and reported earnings overstate economic value creation.
→StableQuality breakdown
- Expectation
- Free cash flow turns positive and remains above zero for 2 consecutive quarters, demonstrating the business can self-fund rather than requiring external capital.
CounterNegative free cash flow in a building-products business can reflect deliberate inventory build or capital investment ahead of a demand recovery; if volumes recover, operating leverage could normalize cash generation quickly without a change in underlying profitability.
Revenue is declining at 21% year-over-year — a steep contraction that places the business at the floor of its peer group for growth and signals a significant loss of volume or pricing power in the underlying market.
→StableGrowth breakdown
- Expectation
- Revenue growth turns positive and exceeds 0% year-over-year for 2 consecutive quarters, indicating the contraction phase has ended.
CounterThe two most recent quarterly earnings beats — each with a large positive surprise — suggest that cost discipline or favorable mix is driving earnings recovery even as revenue contracts; if the volume cycle turns, revenue inflection could follow earnings improvement with a one-to-two quarter lag.
With only 3.1% headroom to the analyst take-profit target from the current price and a risk/reward ratio of 0.44 — well below the 1.5-to-1 minimum — the geometric setup is unfavorable and the asymmetry gate fails at current spot.
→StablePrice targets
- Expectation
- The analyst consensus price target rises above $90, restoring at least 16% upside from the current level and creating a viable entry setup.
CounterThe unfavorable geometry reflects price proximity to the resistance target, not a fundamentally deteriorating business; a pullback to near $68 would restore a more favorable ratio without requiring any improvement in fundamentals.
The momentum dimension scores 6.4 out of 10, with MACD improving, on-balance volume accumulating, and the near-term technical recovery setup in place — suggesting that short-term buying interest is building even as the longer-term trend remains negative.
→StableMomentum breakdown
- Expectation
- Price crosses and holds above the 200-day moving average for 2 consecutive months, confirming the short-term momentum improvement has translated into a sustained trend reversal.
CounterRising on-balance volume and improving MACD in a stock carrying a death-cross warning and trading below its 200-day moving average can reflect temporary short-covering rather than genuine accumulation; absent fundamental recovery, the momentum signal may prove transient.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Quality is below the minimum investable threshold, free cash flow is negative, revenue is contracting 21% year-over-year, and the risk/reward geometry is unfavorable with only 3.1% headroom to the analyst target; improving near-term momentum with rising on-balance volume and an improving MACD is the sole constructive signal and is insufficient to offset the fundamental impairment.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
3.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.6 |
| ROA | 2.8 |
| Gross margin | 0.0 |
| Op margin | 2.6 |
| Net margin | 1.6 |
| Current ratio | 9.7 |
| FCF quality | 0.0 |
| Moat | 4.6 |
| Piotroski F | 7.8 |
- ▸Earnings quality RED FLAG: -80% 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: -21%
Momentum
1.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 1.0 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -3.4%/30d — confirmed downtrend
Sentiment
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.2 |
| Price target | 8.6 |
| erm sentiment | 5.6 |
- ▸Analyst upside: 30%
Insider
7.5/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
- ▸Negligible insider selling — $89,238 (0.002% of mkt cap)
- ▸Institutions accumulating
Peer rank
3.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.6 |
| quality rank | 2.4 |
| growth rank | 0.4 |
- ▸Conservative debt levels
Technical
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 10.0 |
| support resistance | 9.9 |
| 52w position | 3.9 |
| gap | 6.0 |
Risk (lower is worse)
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.1 |
| days to cover | 3.9 |
| volatility | 0.0 |
| put call | 9.9 |
| implied vol | 2.9 |
| beta | 4.7 |
| debt equity | 9.1 |
- ▸High IV: 63%
- ▸Concentration risks: 2 MED (10-K Item 1A)
Catalyst
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 6.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 5.5 |
- ▸Earnings concerns: 2B/2M
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (5)
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:28d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:1.1<4.5
- ASYMMETRY:1.3<1.5@spot
- DEATH_CROSS:HARD_BLOCK
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
1.31
Upside
+13.4%
Downside
10.2%
Sizing output
AVOID
SetupFalling Knife — Death cross, below all MAs, RSI 38, MACD bearish
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.59>1.3
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Insider at 7.5 could not lift the engine output above the verdict floor. Failed gate signal: MOMENTUM:1.1<4.5.
The strongest dimensions are Insider at 7.5, Technical at 7.5, and Sentiment at 7.2; the weakest are Momentum at 1.1, Quality at 3.4, and Peer rank at 3.8. The V9 engine flagged 3 failed gates with 1 warning, producing an asymmetric reward-to-risk of 1.31 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Quality Below Minimum Floor
Trip ifGross margin turns positive and quality score rises above 4.0 for 2 consecutive quarters.
- P2Negative Free Cash Flow
Trip ifFree cash flow turns positive and remains above $0 for 2 consecutive quarters.
- P3Sharply Declining Revenue
Trip ifRevenue growth exceeds 0% year-over-year for 2 consecutive quarters.
- P4Unfavorable Risk Reward Geometry
Trip ifAnalyst consensus price target rises above $90, restoring at least 16% upside from the current price of $77.23.
- P5Improving Near Term Momentum
Trip ifRSI falls below 45 for 2 consecutive months without price breaking above the 200-day moving average, invalidating the short-term accumulation signal.