Value
8.1/10data confidence 83%| Component | Sub-score |
|---|---|
| P/S | 9.6 |
| EV/EBITDA | 6.8 |
| Fwd P/E | 9.0 |
| PEG | 10.0 |
| Analyst target | 5.0 |
- ▸Forward P/E: 11.9x
- ▸PEG: 0.03
- ▸Attractively valued
OC · Why this verdict
Why Owens Corning (OC) 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 score4.5/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Owens Corning trades at a very attractive forward P/E of 10.4x with a PEG of 0.03, and has recovered its technical momentum with a golden cross and rising on-balance volume, but quality fundamentals fall well below the investment floor with a low moat score and declining revenue of minus 10% year-over-year.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Revenue declining 10% year-over-year combined with a quality score of 2.5 — well below the 4.0 investment floor — and no competitive moat means the business lacks the structural protection needed to sustain margins when volumes contract. Warnings | Revenue decline narrows to better than minus 5% year-over-year within the next 2 quarters, demonstrating that the volume trough is past. | ↑Improving |
| CounterBuilding products revenue declines are highly correlated with housing activity cycles; a recovery in housing starts or repair-and-remodel spending could rapidly reverse the revenue trend without any company-specific action. | ||
A forward P/E of 10.4x and a PEG of 0.03 represent one of the most deeply discounted valuations in the building products sector, implying that earnings growth expectations are severely underpriced relative to the current multiple. Valuation breakdown | Forward P/E expands above 13x over the next 12 months as earnings recover from the trough and investor sentiment improves toward building products. | ↑Improving |
| CounterBuilding products companies routinely trade at very low PEG ratios during cyclical downturns because consensus growth estimates are unreliable; the apparent discount may reflect structurally lower growth once housing activity normalizes. | ||
Despite a recovering death-cross warning, the stock is above its 200-day moving average with a strongly bullish MACD and rising on-balance volume, indicating that institutional buyers have returned even before quality fundamentals have confirmed a recovery. Momentum breakdown | Stock remains above the 200-day moving average and MACD stays positive for at least 6 months, confirming sustained momentum continuation. | ↓Deteriorating |
| CounterTechnical recoveries in building materials stocks often stall or reverse when housing starts data disappoints, and the incomplete resolution of the death cross means the reversal is not yet confirmed. | ||
Two beats and two misses in the last four quarters with an average surprise of only 4.2% indicates that earnings visibility is limited and the company is not yet delivering the consistent outperformance that would justify multiple expansion. Earnings | Earnings beat rate improves to 3 or more out of the next 4 quarters and average positive surprise rises above 8%. | ↓Deteriorating |
| CounterA 4.2% average surprise in cyclical industrials is actually reasonable; the mixed record may simply reflect the genuine difficulty of forecasting demand in building materials rather than management execution failure. | ||
Revenue declining 10% year-over-year combined with a quality score of 2.5 — well below the 4.0 investment floor — and no competitive moat means the business lacks the structural protection needed to sustain margins when volumes contract.
↑ImprovingWarnings
- Expectation
- Revenue decline narrows to better than minus 5% year-over-year within the next 2 quarters, demonstrating that the volume trough is past.
CounterBuilding products revenue declines are highly correlated with housing activity cycles; a recovery in housing starts or repair-and-remodel spending could rapidly reverse the revenue trend without any company-specific action.
A forward P/E of 10.4x and a PEG of 0.03 represent one of the most deeply discounted valuations in the building products sector, implying that earnings growth expectations are severely underpriced relative to the current multiple.
↑ImprovingValuation breakdown
- Expectation
- Forward P/E expands above 13x over the next 12 months as earnings recover from the trough and investor sentiment improves toward building products.
CounterBuilding products companies routinely trade at very low PEG ratios during cyclical downturns because consensus growth estimates are unreliable; the apparent discount may reflect structurally lower growth once housing activity normalizes.
Despite a recovering death-cross warning, the stock is above its 200-day moving average with a strongly bullish MACD and rising on-balance volume, indicating that institutional buyers have returned even before quality fundamentals have confirmed a recovery.
↓DeterioratingMomentum breakdown
- Expectation
- Stock remains above the 200-day moving average and MACD stays positive for at least 6 months, confirming sustained momentum continuation.
CounterTechnical recoveries in building materials stocks often stall or reverse when housing starts data disappoints, and the incomplete resolution of the death cross means the reversal is not yet confirmed.
Two beats and two misses in the last four quarters with an average surprise of only 4.2% indicates that earnings visibility is limited and the company is not yet delivering the consistent outperformance that would justify multiple expansion.
↓DeterioratingEarnings
- Expectation
- Earnings beat rate improves to 3 or more out of the next 4 quarters and average positive surprise rises above 8%.
CounterA 4.2% average surprise in cyclical industrials is actually reasonable; the mixed record may simply reflect the genuine difficulty of forecasting demand in building materials rather than management execution failure.
Per-dimension breakdown
Quality
2.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 4.2 |
| Gross margin | 1.4 |
| Op margin | 2.9 |
| Net margin | 0.0 |
| Current ratio | 4.7 |
| Moat | 2.5 |
| Piotroski F | 4.4 |
- ▸No competitive moat
- ▸Quality concerns
Growth
0.0/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 0.0 |
- ▸Declining revenue: -10%
Momentum
2.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 8.0 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 5.0 |
| Volume | 0.0 |
- ▸Oversold in uptrend (RSI 30)
- ▸Volume distribution (falling OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.8 |
| Analyst rating | 7.2 |
| Price target | 7.6 |
- ▸LLM news sentiment: +0.55 (n=1)
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Negligible insider selling — $317,381 (0.003% of mkt cap)
- ▸Institutions accumulating
Peer rank
2.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.7 |
| quality rank | 1.0 |
| growth rank | 0.8 |
Technical
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 7.3 |
| support resistance | 7.8 |
| 52w position | 7.3 |
| gap | 6.0 |
Risk (lower is worse)
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.9 |
| days to cover | 7.6 |
| volatility | 4.4 |
| put call | 8.4 |
| implied vol | 4.1 |
| max pain risk | 3.0 |
| beta | 5.8 |
| debt equity | 3.7 |
- ▸Above max pain $50
Catalyst
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 4.6 |
| dividend safety | 8.5 |
| news activity | 5.0 |
- ▸Earnings concerns: 2B/2M
- ▸Earnings in 13 days
- ▸Dividend aristocrat: 2.2% yield
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (5)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:2.8<4.5
- ASYMMETRY:0.6<1.5@spot
Warning (1)
- EARNINGS_PROXIMITY:13d<=14d (soft)
Reward-to-Risk
0.62
Upside
+4.0%
Downside
6.5%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.30>1.3
Investment implication
The SELL_IF_HOLDING verdict reflects the MOMENTUM gate's 2.8<4.5 outcome against Value at 8.1 and asymmetric R:R of 0.62.
The strongest dimensions are Value at 8.1, Sentiment at 7.5, and Insider at 7.3; the weakest are Growth at 0.0, Quality at 2.5, and Peer rank at 2.6. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of 0.62 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Deep Valuation Discount
Trip ifForward P/E compresses below 8x without a corresponding positive revision in earnings growth above 10%.
- P2Technical Momentum Recovery
Trip ifPrice drops below the 200-day moving average and MACD crosses below zero for more than 4 consecutive weeks.
- P3Revenue Decline Quality Floor
Trip ifRevenue declines by more than 15% year-over-year for 2 consecutive quarters.
- P4Mixed Earnings Consistency
Trip ifEarnings surprise falls below minus 15% in at least 2 of the next 4 quarters.