Value
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 8.0 |
| P/S | 10.0 |
| EV/EBITDA | 5.6 |
| Fwd P/E | 8.5 |
| PEG | 3.2 |
| Analyst target | 9.0 |
- ▸Forward P/E: 13.5x
- ▸PEG: 3.76
- ▸Attractively valued
NGVC · Why this verdict
Why Natural Grocers by Vitamin Cott (NGVC) 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 score5.2/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Natural Grocers combines a perfect earnings beat streak and best-in-class margins with weak growth at an elevated PEG multiple, a leverage penalty, and low-materiality insider selling — a mixed picture supporting a more cautious position size.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company ranks best-in-class on margins versus peers, with a strong Piotroski F-Score of 7 out of 9. Peer-rank breakdown | Margin ranking should remain top-tier versus peers over the next 12 months. | →Stable |
| CounterAn earnings-quality flag on FCF-to-net-income (33%) suggests reported margins may not be fully converting into free cash flow. | ||
Natural Grocers has beaten earnings estimates in all of its last 4 reported quarters, with an average surprise of 54.8%. Catalyst breakdown | The perfect beat streak should continue over the next 4 reported quarters. | →Stable |
| CounterOne of those beats included an unusually large 185.7% surprise that skews the average; excluding that outlier, the beat magnitude may be more modest going forward. | ||
The bear case flags weak growth alongside a high PEG ratio of 3.92, suggesting the stock's forward P/E of 14.1x is expensive relative to its growth rate. Bear case | Revenue growth should reaccelerate, bringing the PEG ratio down below 2.0, over the next 12 months. | ↓Deteriorating |
| CounterA grocery retailer's growth is inherently modest and steady; judging it against a growth-stock PEG framework may understate its defensive value. | ||
A debt-to-equity ratio of 1.4 triggers a leverage penalty of -0.5 points, and insiders have been net sellers of $87,120, though at low materiality. Insider | Leverage should improve and insider transactions should turn neutral-to-buying over the next 12 months. | →Stable |
| CounterThe insider sale is explicitly flagged as low materiality, and 1.4x leverage is not unusual for a grocery retailer with real estate and inventory financing needs. | ||
The company ranks best-in-class on margins versus peers, with a strong Piotroski F-Score of 7 out of 9.
→StablePeer-rank breakdown
- Expectation
- Margin ranking should remain top-tier versus peers over the next 12 months.
CounterAn earnings-quality flag on FCF-to-net-income (33%) suggests reported margins may not be fully converting into free cash flow.
Natural Grocers has beaten earnings estimates in all of its last 4 reported quarters, with an average surprise of 54.8%.
→StableCatalyst breakdown
- Expectation
- The perfect beat streak should continue over the next 4 reported quarters.
CounterOne of those beats included an unusually large 185.7% surprise that skews the average; excluding that outlier, the beat magnitude may be more modest going forward.
The bear case flags weak growth alongside a high PEG ratio of 3.92, suggesting the stock's forward P/E of 14.1x is expensive relative to its growth rate.
↓DeterioratingBear case
- Expectation
- Revenue growth should reaccelerate, bringing the PEG ratio down below 2.0, over the next 12 months.
CounterA grocery retailer's growth is inherently modest and steady; judging it against a growth-stock PEG framework may understate its defensive value.
A debt-to-equity ratio of 1.4 triggers a leverage penalty of -0.5 points, and insiders have been net sellers of $87,120, though at low materiality.
→StableInsider
- Expectation
- Leverage should improve and insider transactions should turn neutral-to-buying over the next 12 months.
CounterThe insider sale is explicitly flagged as low materiality, and 1.4x leverage is not unusual for a grocery retailer with real estate and inventory financing needs.
Per-dimension breakdown
Quality
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 7.6 |
| ROA | 3.9 |
| Gross margin | 2.7 |
| Op margin | 2.1 |
| Net margin | 1.8 |
| Current ratio | 4.2 |
| FCF quality | 2.7 |
| Moat | 4.9 |
| Piotroski F | 7.8 |
- ▸Earnings quality RED FLAG: 33% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
Growth
2.7/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.6 |
| EPS growth | 2.7 |
Momentum
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 8.5 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 3.0 |
| Volume | 5.3 |
- ▸Uptrend pullback (RSI 30) - buy opportunity
- ▸Volume distribution (falling OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 9.7 |
| erm sentiment | 5.0 |
- ▸Analyst upside: 58%
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Insider selling (low materiality) — $87,120 (0.012% of mkt cap)
- ▸Institutions accumulating
Peer rank
4.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.6 |
| quality rank | 8.1 |
| growth rank | 0.9 |
- ▸Best-in-class margins
Technical
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 10.0 |
| support resistance | 9.1 |
| 52w position | 3.0 |
| gap | 6.0 |
Risk (lower is worse)
3.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.7 |
| days to cover | 6.2 |
| volatility | 1.8 |
| put call | 0.0 |
| implied vol | 0.8 |
| beta | 5.9 |
| debt equity | 4.2 |
- ▸Elevated put/call: 12.00
- ▸High IV: 75%
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
- ▸Earnings in 14 days
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- ASYMMETRY:4.0>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- MOMENTUM:3.6<4.5
Warning (1)
- EARNINGS_PROXIMITY:14d<=14d (soft)
Reward-to-Risk
3.99
Upside
+34.2%
Downside
8.6%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeCatalyst-Driven — Earnings in 14d with 4/4 beat streak
SuitabilityAggressive — MCap $0.7B<$5B
Investment implication
The F-path SELL output reflects an overall score of 4.7 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 7.3) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:3.6<4.5) reinforce the read. Current asymmetry R:R is 3.99 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 7.3, Insider at 7.3, and Technical at 7.0; the weakest are Growth at 2.7, Momentum at 3.6, and Risk (lower is worse) at 3.7. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 3.99 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 ifEarnings beat rate falls below 75% over the next 4 reported quarters, breaking the current perfect streak.
- P2Weak Growth At Elevated Peg
Trip ifPEG ratio falls below 2.0 from the current 3.92, confirming reaccelerating growth.
- P3Best In Class Margins
Trip ifQuality peer-rank margin score falls below 5.0 out of 10, losing the current best-in-class ranking.
- P4Leverage Penalty And Insider Selling
Trip ifInsider selling exceeds $500,000 over the next 90 days, well above the current low-materiality $87,120 sale.