Value
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.0 |
| P/S | 6.6 |
| EV/EBITDA | 1.4 |
| Fwd P/E | 5.3 |
| PEG | 4.5 |
| Analyst target | 7.5 |
- ▸Forward P/E: 24.0x
- ▸PEG: 1.98
MLM · Why this verdict
Why Martin Marietta Materials (MLM) 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 score5.0/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Martin Marietta is an industry growth leader with best-in-class margins, but the stock trades at a stretched valuation (25.7x forward earnings, PEG 2.86) with only 4.4% upside to the analyst price target and a failed asymmetry gate — the setup favors patience over new capital deployment.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The business holds the strongest growth position and best-in-class margins in its industry peer group — characteristics that justify a premium multiple; at a forward earnings multiple of 25.7x and PEG of 2.86, however, the current price may already fully reflect the growth advantage. Peer-rank breakdown | Earnings beat consensus in 3 of the next 4 quarterly reports, justifying the sustained premium multiple. | →Stable |
| CounterAt 25.7x forward earnings, any growth deceleration would compress multiples significantly; a free cash flow conversion rate of 33% of net income suggests the business absorbs considerable capital to sustain its growth rate. | ||
With only 4.4% headroom to the analyst-derived price target against approximately 5.9% downside, the asymmetry gate has failed with a ratio of only 0.4-to-1 — the setup does not support new capital at current levels. Engine gate (failed) | Price retreats to at least 12% below the current analyst target, restoring a more favorable risk/reward before new deployment is considered. | →Stable |
| CounterMomentum has recovered (MACD improving, RSI at 60), and a strong earnings beat could push the stock above the current target and prompt analyst target upgrades that reset the geometry. | ||
Free cash flow represents only 33% of net income — the company reports strong margins on paper but converts less than a third of earnings into cash, suggesting significant capital absorption that constrains returns to shareholders relative to headline earnings. Quality breakdown | FCF/NI ratio improves above 60% for 2 consecutive quarters, demonstrating better cash conversion. | →Stable |
| CounterNet margins are noted as strong and best-in-class among peers; the FCF gap may reflect capital investments supporting future growth rather than a structural inefficiency. | ||
Three of the last four quarters produced positive earnings surprises — beats in August 2025, November 2025, and most recently April 2026 — demonstrating that management tends to over-deliver relative to consensus expectations. Earnings | The next quarterly report (August 6, 2026) delivers a positive earnings surprise, extending the overall beat pattern. | ↑Improving |
| CounterThe average surprise across all four periods is less than 1%, and the miss in February 2026 (-7.2%) was more material than any single beat; the pattern reflects marginal outperformance rather than a structural tendency to exceed estimates. | ||
The business holds the strongest growth position and best-in-class margins in its industry peer group — characteristics that justify a premium multiple; at a forward earnings multiple of 25.7x and PEG of 2.86, however, the current price may already fully reflect the growth advantage.
→StablePeer-rank breakdown
- Expectation
- Earnings beat consensus in 3 of the next 4 quarterly reports, justifying the sustained premium multiple.
CounterAt 25.7x forward earnings, any growth deceleration would compress multiples significantly; a free cash flow conversion rate of 33% of net income suggests the business absorbs considerable capital to sustain its growth rate.
With only 4.4% headroom to the analyst-derived price target against approximately 5.9% downside, the asymmetry gate has failed with a ratio of only 0.4-to-1 — the setup does not support new capital at current levels.
→StableEngine gate (failed)
- Expectation
- Price retreats to at least 12% below the current analyst target, restoring a more favorable risk/reward before new deployment is considered.
CounterMomentum has recovered (MACD improving, RSI at 60), and a strong earnings beat could push the stock above the current target and prompt analyst target upgrades that reset the geometry.
Free cash flow represents only 33% of net income — the company reports strong margins on paper but converts less than a third of earnings into cash, suggesting significant capital absorption that constrains returns to shareholders relative to headline earnings.
→StableQuality breakdown
- Expectation
- FCF/NI ratio improves above 60% for 2 consecutive quarters, demonstrating better cash conversion.
CounterNet margins are noted as strong and best-in-class among peers; the FCF gap may reflect capital investments supporting future growth rather than a structural inefficiency.
Three of the last four quarters produced positive earnings surprises — beats in August 2025, November 2025, and most recently April 2026 — demonstrating that management tends to over-deliver relative to consensus expectations.
↑ImprovingEarnings
- Expectation
- The next quarterly report (August 6, 2026) delivers a positive earnings surprise, extending the overall beat pattern.
CounterThe average surprise across all four periods is less than 1%, and the miss in February 2026 (-7.2%) was more material than any single beat; the pattern reflects marginal outperformance rather than a structural tendency to exceed estimates.
Per-dimension breakdown
Quality
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.0 |
| ROA | 3.0 |
| Gross margin | 1.6 |
| Op margin | 8.1 |
| Net margin | 10.0 |
| Current ratio | 5.2 |
| FCF quality | 1.9 |
| Moat | 5.6 |
| Piotroski F | 4.4 |
- ▸Strong margins: 37%
- ▸Earnings quality RED FLAG: 24% FCF/NI
Growth
3.9/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 7.7 |
| EPS growth | 0.0 |
- ▸Strong growth: 21% YoY
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 -2.0%/30d — confirmed downtrend
Sentiment
7.9/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.8 |
| Analyst rating | 7.5 |
| Price target | 8.5 |
- ▸LLM news sentiment: +0.56 (n=2)
- ▸Analyst upside: 29%
Insider
5.3/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.7 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
5.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.8 |
| quality rank | 6.1 |
| growth rank | 7.1 |
- ▸Best-in-class margins
Technical
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.7 |
| support resistance | 8.1 |
| 52w position | 4.5 |
| gap | 5.0 |
Risk (lower is worse)
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.9 |
| days to cover | 6.6 |
| volatility | 6.2 |
| put call | 6.4 |
| implied vol | 7.1 |
| max pain risk | 7.0 |
| beta | 6.6 |
| debt equity | 7.7 |
| news risk | 6.0 |
Catalyst
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 3.5 |
| dividend safety | 8.5 |
| news activity | 6.0 |
- ▸Strong earnings: 3B/1M
- ▸Dividend aristocrat: 0.7% yield
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 (6)
- ASYMMETRY:3.2>=1.5
- INSIDER:OK
- NEWS_BOOST:ANALYST:0.70
- EARNINGS_PROXIMITY:60d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:1.1<4.5
- DEATH_CROSS:HARD_BLOCK
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
3.21
Upside
+16.0%
Downside
5.0%
Sizing output
AVOID
SetupFalling Knife — Death cross, below all MAs, RSI 34, MACD bearish
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 4.4 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Sentiment at 7.9) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:1.1<4.5, DEATH_CROSS:HARD_BLOCK) reinforce the read. Current asymmetry R:R is 3.21 — supplementary context, not the trigger for this path.
The strongest dimensions are Sentiment at 7.9, Risk (lower is worse) at 6.8, and Technical at 6.6; the weakest are Momentum at 1.1, Growth at 3.9, and Quality at 4.8. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of 3.21 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Growth Leader At Premium Valuation
Trip ifEPS falls more than 15% year-over-year for 2 consecutive quarters, undermining the growth-premium valuation basis.
- P2Thin Upside Unfavorable Geometry
Trip ifPrice breaks above $640 for 10 consecutive trading days, implying analysts have raised targets and the geometry has fundamentally reset.
- P3Fcf Quality Gap Earnings Vs Cash
Trip ifFCF/NI ratio rises above 70% for 2 consecutive quarters, demonstrating improved cash conversion.
- P4Consistent Earnings Beat Execution
Trip ifEPS surprise falls below -5% for 2 consecutive quarters.