Value
6.2/10data confidence 83%| Component | Sub-score |
|---|---|
| P/S | 10.0 |
| EV/EBITDA | 5.9 |
| Fwd P/E | 4.6 |
| PEG | 3.1 |
| Analyst target | 7.5 |
- ▸Forward P/E: 27.1x
- ▸PEG: 3.92
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.
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VerdictSELL
Overall score4.2/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
MNRO screens with excellent cash conversion and an earnings catalyst backed by a 3-of-4 beat streak, but quality sits below the engine's floor, the asymmetry gate narrowly failed, revenue is declining, and short interest is elevated.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Quality is scored 3.1, below the engine's 4.0 floor, despite excellent cash conversion of 1000% FCF-to-net-income. Quality breakdown | The overall quality score should cross above 4.0 as moat and margin components strengthen alongside the strong cash conversion. | →Stable |
| CounterA cash-conversion ratio this extreme, at 1000%, can reflect one-time working-capital effects rather than a durable, repeatable pattern. | ||
The V9 asymmetry gate failed narrowly at a 1.03 ratio versus the 1.5 threshold, with modeled upside of 15.4% close to the modeled 15% downside. Engine gate (failed) | The asymmetry ratio should rise above 1.5 as the upcoming earnings catalyst resolves favorably. | →Stable |
| CounterA ratio this close to the threshold, at 1.03 versus 1.5, suggests the setup is nearly balanced rather than genuinely unfavorable. | ||
The engine flags an upcoming earnings catalyst in 25 days, building on a 3-of-4 beat streak, as the primary identified trading edge. Edge rationale | The company should extend its beat streak to at least 3 of the next 4 quarters at the upcoming earnings report. | →Stable |
| CounterThe single miss in the streak, at -196.3% surprise, was also the most recent quarter, which could signal the beat pattern is breaking down heading into the catalyst. | ||
Revenue is declining at -7% as flagged in the growth dimension, pressuring the overall growth score to just 0.7. Growth breakdown | Revenue growth should turn positive as store traffic or same-store sales trends recover. | →Stable |
| CounterStrong recent earnings beats suggest cost control and margin management are offsetting the top-line revenue decline. | ||
Short interest is elevated at 28% of float, contributing to the risk profile alongside high implied volatility of 95%. Risk breakdown | Short interest should decline from 28% as the quality and growth concerns are resolved or priced in. | ↑Improving |
| CounterHigh short interest combined with rising OBV volume accumulation and an approaching earnings catalyst could set up a short-covering rally. | ||
Quality is scored 3.1, below the engine's 4.0 floor, despite excellent cash conversion of 1000% FCF-to-net-income.
→StableQuality breakdown
- Expectation
- The overall quality score should cross above 4.0 as moat and margin components strengthen alongside the strong cash conversion.
CounterA cash-conversion ratio this extreme, at 1000%, can reflect one-time working-capital effects rather than a durable, repeatable pattern.
The V9 asymmetry gate failed narrowly at a 1.03 ratio versus the 1.5 threshold, with modeled upside of 15.4% close to the modeled 15% downside.
→StableEngine gate (failed)
- Expectation
- The asymmetry ratio should rise above 1.5 as the upcoming earnings catalyst resolves favorably.
CounterA ratio this close to the threshold, at 1.03 versus 1.5, suggests the setup is nearly balanced rather than genuinely unfavorable.
The engine flags an upcoming earnings catalyst in 25 days, building on a 3-of-4 beat streak, as the primary identified trading edge.
→StableEdge rationale
- Expectation
- The company should extend its beat streak to at least 3 of the next 4 quarters at the upcoming earnings report.
CounterThe single miss in the streak, at -196.3% surprise, was also the most recent quarter, which could signal the beat pattern is breaking down heading into the catalyst.
Revenue is declining at -7% as flagged in the growth dimension, pressuring the overall growth score to just 0.7.
→StableGrowth breakdown
- Expectation
- Revenue growth should turn positive as store traffic or same-store sales trends recover.
CounterStrong recent earnings beats suggest cost control and margin management are offsetting the top-line revenue decline.
Short interest is elevated at 28% of float, contributing to the risk profile alongside high implied volatility of 95%.
↑ImprovingRisk breakdown
- Expectation
- Short interest should decline from 28% as the quality and growth concerns are resolved or priced in.
CounterHigh short interest combined with rising OBV volume accumulation and an approaching earnings catalyst could set up a short-covering rally.
Per-dimension breakdown
Quality
3.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.1 |
| ROA | 0.9 |
| Gross margin | 3.0 |
| Op margin | 2.2 |
| Net margin | 0.1 |
| Current ratio | 1.8 |
| FCF quality | 10.0 |
| Moat | 3.9 |
| Piotroski F | 5.6 |
- ▸Excellent cash conversion: 1000% FCF/NI
- ▸No competitive moat
Growth
0.7/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 0.7 |
- ▸Declining revenue: -7%
Momentum
2.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 3.2 |
| OBV | 1.0 |
| MA position | 3.5 |
| Volume | 0.7 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope flat
Sentiment
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.3 |
| Price target | 9.1 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (4.0) — signal dampened
- ▸Analyst upside: 39%
Insider
6.8/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 8.4 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
3.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.1 |
| quality rank | 2.1 |
| growth rank | 1.1 |
Technical
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 5.5 |
| support resistance | 4.9 |
| 52w position | 4.5 |
Risk (lower is worse)
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 0.0 |
| days to cover | 6.3 |
| volatility | 1.7 |
| put call | 10.0 |
| implied vol | 0.9 |
| max pain risk | 3.0 |
| beta | 6.9 |
| debt equity | 6.1 |
- ▸High short interest: 35%
- ▸High IV: 75%
- ▸Above max pain $12
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| dividend safety | 5.8 |
- ▸Strong earnings: 3B/1M
- ▸Earnings in 5 days
- ▸Dividend: 6.6%
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (6)
- ASYMMETRY:2.1>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:2.6<4.5
- DEATH_CROSS:HARD_BLOCK
- EARNINGS_PROXIMITY:5d<=7d
Warning (0)
none
Reward-to-Risk
2.08
Upside
+18.1%
Downside
8.7%
Sizing output
AVOID
SetupRange Bound — RSI 46 mid-range, Bollinger mid-band
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $0.5B<$5B
Investment implication
The SELL_IF_HOLDING verdict reflects the MOMENTUM gate's 2.6<4.5 outcome against Sentiment at 6.9 and asymmetric R:R of 2.08.
The strongest dimensions are Sentiment at 6.9, Insider at 6.8, and Value at 6.2; the weakest are Growth at 0.7, Momentum at 2.6, and Quality at 3.1. The V9 engine flagged 3 failed gates, producing an asymmetric reward-to-risk of 2.08 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 Floor Despite Cash Conversion
Trip ifQuality score rises above 4.0, clearing the engine's quality floor.
- P2Asymmetry Gate Near Miss
Trip ifAsymmetry ratio exceeds 1.5, clearing the V9 gate that currently fails at 1.03.
- P3Earnings Catalyst With Beat Streak
Trip ifEarnings beat rate falls below 2 of the next 4 reported quarters, including the upcoming report.
- P4Declining Revenue Growth
Trip ifRevenue growth turns positive and exceeds 0% YoY for 2 consecutive quarters.
- P5Elevated Short Interest
Trip ifShort interest falls below 15% of float, well off the current 28% reading.