Value
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.2 |
| P/S | 8.4 |
| EV/EBITDA | 3.4 |
| Fwd P/E | 7.6 |
| PEG | 5.1 |
| Analyst target | 6.0 |
- ▸Forward P/E: 16.2x
- ▸PEG: 1.47
MMSI · Why this verdict
Why Merit Medical Systems (MMSI) 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 score5.8/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company has beaten consensus earnings estimates in all four most recent quarters by an average of nearly 13%, while free cash flow converts at 128% of net income — a combination of delivery reliability and cash quality that is rare and supports confidence in the reported earnings. Earnings | The beat streak should continue, with EPS beating consensus in at least 3 of the next 4 quarters and average surprise remaining above 8%. | →Stable |
| CounterA four-quarter beat streak with strong averages can set a high market expectation baseline, making any single miss disproportionately punitive; cash conversion above 100% may also reflect favorable working-capital timing rather than a structural outperformance that will persist. | ||
A confirmed death cross is in place, the 200-day moving average is declining at roughly 4% per month, and a hard technical block has been triggered — conditions that typically require resolution before new buyers can achieve reliable entry timing. Engine gate (failed) | The 200-day moving average should stop declining and price should reclaim that level within 12 months for the technical obstruction to resolve. | →Stable |
| CounterRSI stands at 58 and MACD is improving — early recovery signals consistent with the setup; the longer-term moving average may be lagging a genuine momentum inflection that is already underway in shorter-term data. | ||
A Piotroski financial strength score of 9 out of 9 — the highest possible reading — signals that the business clears every standard financial health criterion simultaneously, reducing the risk of distress or forced dilution at inopportune times. Quality breakdown | The Piotroski score should sustain above 7 for at least the next 4 quarters, confirming that financial health is structural rather than a point-in-time reading. | →Stable |
| CounterPiotroski scores reflect past financial statements and may not anticipate forward balance-sheet pressures from growth investment, potential acquisitions, or rising debt service if the company increases leverage. | ||
A strong growth profile across both revenue and earnings, at a forward P/E of 15.2 times and a PEG of 1.42, suggests the current multiple is reasonable relative to the growth trajectory — and analyst consensus implies approximately 34% upside to the target price. Bull case | Revenue growth should sustain above 5% year-over-year for the next 4 quarters, and forward earnings estimates should hold or rise, preserving the multiple-support argument. | →Stable |
| CounterVolume distribution (falling OBV) indicates institutional selling into the current price level, which can suppress the multiple even when underlying fundamentals are sound — suggesting the market may not yet accept the growth premium embedded in analyst targets. | ||
The company has beaten consensus earnings estimates in all four most recent quarters by an average of nearly 13%, while free cash flow converts at 128% of net income — a combination of delivery reliability and cash quality that is rare and supports confidence in the reported earnings.
→StableEarnings
- Expectation
- The beat streak should continue, with EPS beating consensus in at least 3 of the next 4 quarters and average surprise remaining above 8%.
CounterA four-quarter beat streak with strong averages can set a high market expectation baseline, making any single miss disproportionately punitive; cash conversion above 100% may also reflect favorable working-capital timing rather than a structural outperformance that will persist.
A confirmed death cross is in place, the 200-day moving average is declining at roughly 4% per month, and a hard technical block has been triggered — conditions that typically require resolution before new buyers can achieve reliable entry timing.
→StableEngine gate (failed)
- Expectation
- The 200-day moving average should stop declining and price should reclaim that level within 12 months for the technical obstruction to resolve.
CounterRSI stands at 58 and MACD is improving — early recovery signals consistent with the setup; the longer-term moving average may be lagging a genuine momentum inflection that is already underway in shorter-term data.
A Piotroski financial strength score of 9 out of 9 — the highest possible reading — signals that the business clears every standard financial health criterion simultaneously, reducing the risk of distress or forced dilution at inopportune times.
→StableQuality breakdown
- Expectation
- The Piotroski score should sustain above 7 for at least the next 4 quarters, confirming that financial health is structural rather than a point-in-time reading.
CounterPiotroski scores reflect past financial statements and may not anticipate forward balance-sheet pressures from growth investment, potential acquisitions, or rising debt service if the company increases leverage.
A strong growth profile across both revenue and earnings, at a forward P/E of 15.2 times and a PEG of 1.42, suggests the current multiple is reasonable relative to the growth trajectory — and analyst consensus implies approximately 34% upside to the target price.
→StableBull case
- Expectation
- Revenue growth should sustain above 5% year-over-year for the next 4 quarters, and forward earnings estimates should hold or rise, preserving the multiple-support argument.
CounterVolume distribution (falling OBV) indicates institutional selling into the current price level, which can suppress the multiple even when underlying fundamentals are sound — suggesting the market may not yet accept the growth premium embedded in analyst targets.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Merit Medical Systems combines a perfect four-quarter earnings beat streak averaging nearly 13% upside, a maximum Piotroski financial health score of 9 out of 9, and free-cash-flow conversion at 128% of net income — but a confirmed death cross with the 200-day moving average declining at roughly 4% per month represents a hard technical block that makes the setup best suited to patient holders rather than new buyers.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.0 |
| ROA | 3.1 |
| Gross margin | 5.7 |
| Op margin | 4.6 |
| Net margin | 4.5 |
| Current ratio | 7.9 |
| FCF quality | 9.3 |
| Moat | 5.8 |
| Piotroski F | 10.0 |
- ▸Excellent cash conversion: 128% FCF/NI
- ▸Strong Piotroski F-Score: 9/9
Growth
7.1/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.4 |
| EPS growth | 9.8 |
Momentum
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.7 |
| MACD | 10.0 |
| OBV | 9.5 |
| MA position | 6.0 |
| Volume | 1.5 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -4.1%/30d — confirmed downtrend
Sentiment
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 8.3 |
| erm sentiment | 4.6 |
- ▸Analyst upside: 26%
Insider
5.3/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.5 |
| holder change | 5.1 |
- ▸Insider buying (low materiality) — $260,258 (0.006% of mkt cap)
Peer rank
4.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.2 |
| quality rank | 6.7 |
| growth rank | 3.0 |
Technical
2.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.3 |
| support resistance | 1.6 |
| 52w position | 4.7 |
Risk (lower is worse)
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.6 |
| days to cover | 6.5 |
| volatility | 4.9 |
| put call | 3.1 |
| implied vol | 3.2 |
| beta | 9.9 |
| debt equity | 8.0 |
- ▸Elevated put/call: 1.54
- ▸High IV: 61%
Catalyst
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 8.9 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (7)
- MOMENTUM:6.1>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:27d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.7<1.5@spot
Warning (1)
- DEATH_CROSS:momentum=6.1>=5.0 recovering
Reward-to-Risk
0.74
Upside
+9.6%
Downside
13.0%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 63
EdgeCatalyst-Driven — Earnings in 27d with 4/4 beat streak
SuitabilityAggressive — MCap $4.2B<$5B
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:6.1>=5.5. Top dim: Catalyst at 7.2; weakest: Technical at 2.5. No conviction either direction.
The strongest dimensions are Catalyst at 7.2, Growth at 7.1, and Momentum at 6.1; the weakest are Technical at 2.5, Peer rank at 4.0, and Insider at 5.3. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 0.74 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 Execution Strong Cash Conversion
Trip ifEPS surprise falls below 0% in 2 consecutive quarters, ending the perfect beat streak.
- P2Confirmed Downtrend Blocks Near Term Entry
Trip ifThe 200-day moving-average slope rises above 0% and price holds above the 200-day moving average for 4 consecutive weeks, confirming the downtrend has reversed.
- P3Maximum Financial Health Score
Trip ifPiotroski financial strength score falls below 7 for 2 consecutive reporting periods, indicating meaningful deterioration in balance-sheet health.
- P4Growth Profile Supports Current Multiple
Trip ifRevenue growth falls below 5% year-over-year for 2 consecutive quarters, compressing the growth-to-multiple justification.