Value
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.0 |
| P/S | 10.0 |
| EV/EBITDA | 5.3 |
| Fwd P/E | 3.8 |
| PEG | 2.7 |
| Analyst target | 9.0 |
- ▸Forward P/E: 30.9x
- ▸PEG: 4.64
MNRO · Why this verdict
Why Monro (MNRO) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score4.2/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Monro shows excellent cash conversion and a 41.3% gap to the analyst target, but revenue is shrinking about 5%, the last two quarters were large earnings misses, and business quality sits below the engine's 4.0 floor.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The top ten vendors account for 88.0% of stocking purchases, a high concentration the company must manage without supply disruption. Bear case | Vendor concentration stays near 88% with no supply interruption to quarterly revenue. | ↑Improving |
| CounterHeavy dependence on a few vendors gives suppliers pricing power over a business already running thin margins, and short interest of 44% shows traders expect trouble. | ||
Revenue is declining about 5%, with $287.1M in the June 2026 quarter against $301.0M a year earlier, and must stabilize for the thesis to work. Growth breakdown | Quarterly revenue should hold at or above the current $287M level and approach the $284M to $294M range of recent quarters. | →Stable |
| CounterRevenue has fallen from $322.1M in September 2023 to $287.1M and the latest quarter is a provisional figure, so the decline could continue. | ||
EPS missed in the last two quarters, at -$0.09 against a $0.02 estimate and -$0.16 against -$0.05, and must return to profit for the thesis to hold. Miss count | EPS should return to positive and meet estimates at or after the 29 October 2026 report. | ↑Improving |
| CounterAverage surprise is -159%, and the last two quarters flipped from profit of $0.16 and $0.21 to losses, so margins appear to be eroding. | ||
Cash conversion is excellent at 415% FCF to net income despite thin profits, suggesting cash generation is stronger than reported earnings. Quality breakdown | Free cash flow should stay well above net income over the next 12 months. | →Stable |
| CounterThe ratio is inflated by near-zero net income, and the business has no competitive moat with quality at 2.8, below the 4.0 floor. | ||
Price of $13.23 sits 41.3% below the $18.70 analyst target, against 9.5% downside to the $12.76 stop, a reward-to-risk of 4.4. Upside pct | Price should move toward the analyst target if earnings stabilize. | ↑Improving |
| CounterAnalyst coverage is light, which dampens the signal, and the stock is in a confirmed downtrend with the 200-day average falling 4.9% over 30 days. | ||
The top ten vendors account for 88.0% of stocking purchases, a high concentration the company must manage without supply disruption.
↑ImprovingBear case
- Expectation
- Vendor concentration stays near 88% with no supply interruption to quarterly revenue.
CounterHeavy dependence on a few vendors gives suppliers pricing power over a business already running thin margins, and short interest of 44% shows traders expect trouble.
Revenue is declining about 5%, with $287.1M in the June 2026 quarter against $301.0M a year earlier, and must stabilize for the thesis to work.
→StableGrowth breakdown
- Expectation
- Quarterly revenue should hold at or above the current $287M level and approach the $284M to $294M range of recent quarters.
CounterRevenue has fallen from $322.1M in September 2023 to $287.1M and the latest quarter is a provisional figure, so the decline could continue.
EPS missed in the last two quarters, at -$0.09 against a $0.02 estimate and -$0.16 against -$0.05, and must return to profit for the thesis to hold.
↑ImprovingMiss count
- Expectation
- EPS should return to positive and meet estimates at or after the 29 October 2026 report.
CounterAverage surprise is -159%, and the last two quarters flipped from profit of $0.16 and $0.21 to losses, so margins appear to be eroding.
Cash conversion is excellent at 415% FCF to net income despite thin profits, suggesting cash generation is stronger than reported earnings.
→StableQuality breakdown
- Expectation
- Free cash flow should stay well above net income over the next 12 months.
CounterThe ratio is inflated by near-zero net income, and the business has no competitive moat with quality at 2.8, below the 4.0 floor.
Price of $13.23 sits 41.3% below the $18.70 analyst target, against 9.5% downside to the $12.76 stop, a reward-to-risk of 4.4.
↑ImprovingUpside pct
- Expectation
- Price should move toward the analyst target if earnings stabilize.
CounterAnalyst coverage is light, which dampens the signal, and the stock is in a confirmed downtrend with the 200-day average falling 4.9% over 30 days.
Per-dimension breakdown
Quality
2.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.5 |
| ROA | 0.6 |
| Gross margin | 3.0 |
| Op margin | 0.3 |
| Net margin | 0.4 |
| Current ratio | 2.0 |
| FCF quality | 10.0 |
| Moat | 3.1 |
| Piotroski F | 5.6 |
- ▸Excellent cash conversion: 415% FCF/NI
- ▸No competitive moat
- ▸Quality concerns
Growth
1.4/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 1.4 |
- ▸Declining revenue: -5%
Momentum
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 3.2 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 5.3 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -4.9%/30d — confirmed downtrend
Sentiment
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 4.2 |
| Analyst rating | 6.3 |
| Price target | 9.6 |
- ▸Light analyst coverage (4.0) — signal dampened
- ▸Analyst upside: 54%
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
2.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.1 |
| quality rank | 2.5 |
| growth rank | 0.3 |
Technical
2.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.6 |
| support resistance | 3.5 |
| 52w position | 2.5 |
Risk (lower is worse)
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 0.0 |
| days to cover | 2.4 |
| volatility | 0.8 |
| put call | 10.0 |
| implied vol | 0.0 |
| max pain risk | 3.0 |
| beta | 6.7 |
| debt equity | 5.6 |
- ▸High short interest: 44%
- ▸High IV: 96%
- ▸Above max pain $2
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| dividend safety | 4.0 |
| news activity | 6.0 |
- ▸Earnings concerns: 2B/2M
- ▸Earnings in 2 days
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (6)
- MOMENTUM:5.8>=5.5
- ASYMMETRY:3.3>=1.5
- INSIDER:OK
- 8K:CLEAN
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- EARNINGS_PROXIMITY:2d<=7d
Warning (1)
- DEATH_CROSS:momentum=5.8>=5.0 recovering
Reward-to-Risk
3.26
Upside
+30.5%
Downside
9.4%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $0.4B<$5B
Investment implication
The SELL_IF_HOLDING verdict reflects the EARNINGS_PROXIMITY gate's 2d<=7d outcome against Insider at 7.3 and asymmetric R:R of 3.26.
The strongest dimensions are Insider at 7.3, Sentiment at 6.6, and Momentum at 5.8; the weakest are Growth at 1.4, Peer rank at 2.6, and Quality at 2.8. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 3.26 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Revenue Decline Stabilizes
Trip ifQuarterly revenue falls below $270M from the current $287M.
- P2Earnings Miss Reversal
Trip ifEPS stays below $0.00 for 2 consecutive quarters.
- P3Strong Cash Conversion
Trip ifFree cash flow to net income falls below 100% from the current 415%.
- P4Analyst Target Upside
Trip ifAnalyst target falls below $15.00 from the current $18.70.
- P5Vendor Concentration Manageable
Trip ifTop ten vendor share of stocking purchases exceeds 90% from the current 88%.