Value
9.2/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 9.0 |
| P/S | 9.6 |
| EV/EBITDA | 8.0 |
| Fwd P/E | 8.7 |
| PEG | 10.0 |
- ▸Forward P/E: 12.9x
- ▸PEG: 0.21
- ▸Attractively valued
ORI · Why this verdict
Why Old Republic International (ORI) 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 score6.6/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Old Republic International offers exceptional valuation at a forward price-to-earnings of 11.6x with 210% free cash flow conversion and a wide economic moat, but two consecutive earnings misses, an inverted risk-reward, and a news-driven negative sentiment signal suggest caution.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
A negative news modifier has shifted the hold rating toward a sell signal, reflecting recent news flow that could create further downward price pressure in the near term. Warnings | News sentiment turns neutral or positive, reverting the news modifier to zero within 3 months. | ↓Deteriorating |
| CounterShort-term news sentiment modifiers are often noisy and can reverse rapidly after a single positive corporate announcement or earnings report. | ||
A wide economic moat score of 8.4 combined with a PEG ratio of 0.33 and forward price-to-earnings of 11.6x suggests the market is undervaluing a high-quality compounder. Valuation breakdown | The stock re-rates to at least 14x forward earnings as the market recognizes the moat's durability over the next 12 months. | Tripped→Stable |
| CounterProperty and casualty insurance is deeply commoditized in many lines, and moat scores for multi-line insurers can be inflated by size rather than genuine pricing power. | ||
Free cash flow is 210% of net income, meaning cash generation is more than double reported earnings, which indicates very high earnings quality for this insurance holding company. Quality breakdown | Free cash flow conversion remains above 150% of net income for at least 3 of the next 4 reported quarters. | ↓Deteriorating |
| CounterThe 210% ratio may reflect timing differences in claims reserves rather than durable structural cash generation, and insurance company cash flows can swing significantly with catastrophe loss years. | ||
Two consecutive earnings misses of negative 14% and negative 16% in January and April 2026 signal that the business is underperforming expectations at a time when the stock is already near analyst targets. Earnings | Earnings beats return in at least 2 of the next 4 quarters with positive surprise above 5%. | ↓Deteriorating |
| CounterPrior to the two recent misses, the company beat estimates twice in Q3 and Q4 2025, suggesting the misses may be temporary rather than a structural deterioration. | ||
A negative news modifier has shifted the hold rating toward a sell signal, reflecting recent news flow that could create further downward price pressure in the near term.
↓DeterioratingWarnings
- Expectation
- News sentiment turns neutral or positive, reverting the news modifier to zero within 3 months.
CounterShort-term news sentiment modifiers are often noisy and can reverse rapidly after a single positive corporate announcement or earnings report.
A wide economic moat score of 8.4 combined with a PEG ratio of 0.33 and forward price-to-earnings of 11.6x suggests the market is undervaluing a high-quality compounder.
Tripped→StableValuation breakdown
- Expectation
- The stock re-rates to at least 14x forward earnings as the market recognizes the moat's durability over the next 12 months.
CounterProperty and casualty insurance is deeply commoditized in many lines, and moat scores for multi-line insurers can be inflated by size rather than genuine pricing power.
Free cash flow is 210% of net income, meaning cash generation is more than double reported earnings, which indicates very high earnings quality for this insurance holding company.
↓DeterioratingQuality breakdown
- Expectation
- Free cash flow conversion remains above 150% of net income for at least 3 of the next 4 reported quarters.
CounterThe 210% ratio may reflect timing differences in claims reserves rather than durable structural cash generation, and insurance company cash flows can swing significantly with catastrophe loss years.
Two consecutive earnings misses of negative 14% and negative 16% in January and April 2026 signal that the business is underperforming expectations at a time when the stock is already near analyst targets.
↓DeterioratingEarnings
- Expectation
- Earnings beats return in at least 2 of the next 4 quarters with positive surprise above 5%.
CounterPrior to the two recent misses, the company beat estimates twice in Q3 and Q4 2025, suggesting the misses may be temporary rather than a structural deterioration.
Per-dimension breakdown
Quality
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 6.2 |
| ROA | 2.1 |
| Gross margin | 8.8 |
| Op margin | 7.0 |
| Net margin | 5.9 |
| Current ratio | 2.7 |
| Moat | 7.6 |
| Piotroski F | 8.9 |
- ▸Wide economic moat
- ▸Compounder quality: strong returns + growth
- ▸Strong Piotroski F-Score: 8/9
Growth
7.9/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.8 |
| EPS growth | 10.0 |
Momentum
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 3.0 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 2.5 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 4.9 |
| Analyst rating | 5.9 |
| Price target | 4.9 |
- ▸Light analyst coverage (2.0) — signal dampened
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Negligible insider selling — $504,701 (0.005% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.6 |
| quality rank | 5.4 |
| growth rank | 7.2 |
Technical
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.2 |
| support resistance | 1.3 |
| 52w position | 9.4 |
| gap | 6.0 |
Risk (lower is worse)
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.5 |
| days to cover | 5.3 |
| volatility | 7.0 |
| put call | 4.0 |
| implied vol | 8.1 |
| debt equity | 8.5 |
| news risk | 6.0 |
- ▸Concentration risks: 2 MED (10-K Item 1A)
Catalyst
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 9.8 |
| dividend safety | 5.5 |
| news activity | 8.0 |
- ▸Earnings concerns: 2B/2M
- ▸Dividend: 3.0%
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more. | News modifier -1 (HOLD_IF_HOLDING → SELL_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_F_HOLD|L3:NEWS_MOD=-1Passed (5)
- INSIDER:OK
- 8K:CLEAN
- EARNINGS_PROXIMITY:89d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:4.2<4.5
- ASYMMETRY:-2.7=NEGATIVE
Warning (0)
none
Reward-to-Risk
-2.69
Upside
-15.6%
Downside
5.8%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Binary industry: Insurance - Property & Casualty
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: INSIDER:OK. Top dim: Value at 9.2; weakest: Momentum at 4.2. No conviction either direction.
The strongest dimensions are Value at 9.2, Growth at 7.9, and Insider at 7.3; the weakest are Momentum at 4.2, Technical at 4.5, and Sentiment at 5.3. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -2.69 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Exceptional Cash Conversion
Trip ifFree cash flow falls below 100% of net income for 2 consecutive quarters.
- P2Wide Moat ValuationTripped
Trip ifForward price-to-earnings rises above 15x without a corresponding increase in earnings estimates.
- P3Consecutive Earnings Misses
Trip ifEarnings miss occurs in 3 of the next 4 quarters with average negative surprise exceeding 10%.
- P4News Sentiment Negative Signal
Trip ifNews sentiment score remains below negative 0.5 for more than 60 days.