Value
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 8.0 |
| P/S | 9.1 |
| EV/EBITDA | 5.4 |
| Fwd P/E | 8.6 |
| PEG | 7.2 |
| Analyst target | 4.0 |
- ▸Forward P/E: 13.3x
- ▸PEG: 0.97
MATX · Why this verdict
Why Matson (MATX) 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 score5.1/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company's quality profile is below the threshold that would be expected for a core holding, with free cash flow converting only about 56% of reported net income — an earnings quality concern — and no identifiable competitive moat to defend returns as the market cycle evolves. Quality breakdown | FCF relative to net income improves above 80% for 2 consecutive quarters, signaling a meaningful improvement in the quality of reported earnings. | →Stable |
| CounterBelow-average FCF conversion in a capital-intensive marine shipping business may reflect fleet investment cycles rather than structural weakness; the ratio could improve sharply once a capital spending peak has passed. | ||
The company has beaten earnings estimates in each of the past four consecutive quarters, with an average upside surprise of roughly 25% — including a 15% beat in the most recent quarter and beats of 24–30% in the three prior quarters — demonstrating a consistent pattern of out-delivering against expectations. Catalyst breakdown | Beat streak extends to at least 5 consecutive quarters, with average quarterly EPS surprise remaining above 10% over the next 12 months. | →Stable |
| CounterA perfect beat streak built on a declining revenue base may reflect cost discipline and favorable comps rather than genuine growth; any deterioration in shipping volumes or rates could end the run abruptly and trigger sharp downward estimate revisions. | ||
With approximately 2% upside to the near-term price target against about 6% potential downside, the risk/reward ratio stands at roughly 0.34-to-1 — a setup that rewards patience over new commitment and suggests the near-term opportunity has largely been captured. Price targets | A more attractive entry emerges only if the stock pulls back at least 10% from current levels, restoring upside to the target above 12% and producing a risk/reward ratio above 1.5-to-1. | →Stable |
| CounterA continued momentum breakout — golden cross in place, MACD bullish, RSI at a healthy 64 — can carry the stock through its near-term target, rendering the current geometry a conservative floor rather than a ceiling. | ||
Revenue declined approximately 3% in the most recent period, meaning the business is shrinking on the top line even as earnings beats continue — a divergence that typically narrows eventually, either through revenue recovery or downward EPS revisions. Growth breakdown | Revenue returns to positive year-over-year growth above 0% for 2 consecutive quarters within 12 months, confirming the decline was transitory. | →Stable |
| CounterShipping volumes and rates are highly cyclical; a macro recovery or a supply-chain disruption that favors domestic routes could rapidly restore revenue growth, making the current contraction a timing phenomenon rather than a structural one. | ||
The company's quality profile is below the threshold that would be expected for a core holding, with free cash flow converting only about 56% of reported net income — an earnings quality concern — and no identifiable competitive moat to defend returns as the market cycle evolves.
→StableQuality breakdown
- Expectation
- FCF relative to net income improves above 80% for 2 consecutive quarters, signaling a meaningful improvement in the quality of reported earnings.
CounterBelow-average FCF conversion in a capital-intensive marine shipping business may reflect fleet investment cycles rather than structural weakness; the ratio could improve sharply once a capital spending peak has passed.
The company has beaten earnings estimates in each of the past four consecutive quarters, with an average upside surprise of roughly 25% — including a 15% beat in the most recent quarter and beats of 24–30% in the three prior quarters — demonstrating a consistent pattern of out-delivering against expectations.
→StableCatalyst breakdown
- Expectation
- Beat streak extends to at least 5 consecutive quarters, with average quarterly EPS surprise remaining above 10% over the next 12 months.
CounterA perfect beat streak built on a declining revenue base may reflect cost discipline and favorable comps rather than genuine growth; any deterioration in shipping volumes or rates could end the run abruptly and trigger sharp downward estimate revisions.
With approximately 2% upside to the near-term price target against about 6% potential downside, the risk/reward ratio stands at roughly 0.34-to-1 — a setup that rewards patience over new commitment and suggests the near-term opportunity has largely been captured.
→StablePrice targets
- Expectation
- A more attractive entry emerges only if the stock pulls back at least 10% from current levels, restoring upside to the target above 12% and producing a risk/reward ratio above 1.5-to-1.
CounterA continued momentum breakout — golden cross in place, MACD bullish, RSI at a healthy 64 — can carry the stock through its near-term target, rendering the current geometry a conservative floor rather than a ceiling.
Revenue declined approximately 3% in the most recent period, meaning the business is shrinking on the top line even as earnings beats continue — a divergence that typically narrows eventually, either through revenue recovery or downward EPS revisions.
→StableGrowth breakdown
- Expectation
- Revenue returns to positive year-over-year growth above 0% for 2 consecutive quarters within 12 months, confirming the decline was transitory.
CounterShipping volumes and rates are highly cyclical; a macro recovery or a supply-chain disruption that favors domestic routes could rapidly restore revenue growth, making the current contraction a timing phenomenon rather than a structural one.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Matson has delivered four consecutive earnings beats with an average upside surprise of roughly 25%, demonstrating exceptional near-term execution, but the stock has run close to its price target with only about 2% upside remaining against roughly 6% downside — a 0.34-to-1 risk/reward that limits the case for new commitment. Underlying quality is below average with no identifiable competitive moat, and revenue contracted approximately 3% in the most recent period.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.3 |
| ROA | 4.2 |
| Gross margin | 0.5 |
| Op margin | 3.1 |
| Net margin | 6.5 |
| Current ratio | 3.3 |
| FCF quality | 4.4 |
| Moat | 5.1 |
| Piotroski F | 6.7 |
- ▸Earnings quality warning: 56% FCF/NI
- ▸No competitive moat
Growth
3.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 1.7 |
| EPS growth | 4.7 |
- ▸Declining revenue: -3%
Momentum
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 9.7 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 6.2 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.8 |
| Price target | 6.9 |
| erm sentiment | 4.4 |
- ▸Light analyst coverage (3.0) — signal dampened
Insider
3.4/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 2.0 |
| holder change | 5.1 |
- ▸Notable insider selling — $6,550,782 (0.106% of mkt cap)
Peer rank
4.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.8 |
| quality rank | 5.5 |
| growth rank | 2.6 |
Technical
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.3 |
| support resistance | 1.8 |
| 52w position | 9.6 |
Risk (lower is worse)
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.6 |
| days to cover | 6.5 |
| volatility | 5.0 |
| put call | 10.0 |
| implied vol | 5.1 |
| beta | 5.9 |
| debt equity | 9.0 |
Catalyst
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 5.2 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 75.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:6.3>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:26d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.4=NEGATIVE
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.36
Upside
-3.5%
Downside
9.8%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 56, MACD bullish
EdgeCatalyst-Driven — Earnings in 26d with 4/4 beat streak
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.1 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 7.0) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.4=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.36 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 7.0, Risk (lower is worse) at 7.0, and Catalyst at 7.0; the weakest are Growth at 3.2, Insider at 3.4, and Technical at 3.9. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.36 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Earnings Beat Streak
Trip ifEPS misses analyst consensus estimates by more than 5% for 1 quarter, breaking the consecutive beat streak.
- P2Limited Near Term Upside
Trip ifUpside to the near-term price target exceeds 12% (stock retreats below approximately $175), restoring a favorable risk/reward ratio.
- P3Below Average Quality No Moat
Trip ifFCF relative to net income rises above 80% for 2 consecutive quarters.
- P4Revenue Contraction
Trip ifRevenue growth turns positive above 0% year-over-year for 2 consecutive quarters.