Value
7.6/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 10.0 |
| P/S | 9.7 |
| EV/EBITDA | 7.5 |
| Fwd P/E | 9.2 |
| Analyst target | 4.0 |
- ▸Forward P/E: 10.4x
- ▸Attractively valued
RCI · Why this verdict
Why Rogers Communication (RCI) 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 score5.9/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Rogers Communications trades at a forward price-to-earnings of 10.7x with an excellent return on equity of 41% and strong operating margins of 32%, but earnings are expected to decline approximately 61% as the current period likely represents a cyclical peak — making valuation misleading and the near-term downside risk more significant than the headline multiples suggest.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Rogers has an ROE of 41%, operating margins of 32%, a Piotroski F-Score of approximately 6.7 out of 9, and ranks in the top decile among peers on both ROE and quality — indicating the underlying business is well-run and generates strong returns on capital even if near-term earnings face cyclical pressure. Quality breakdown | Return on equity remains above 30% over the next 12 months, confirming that capital allocation quality is not deteriorating alongside the cyclical earnings headwind. | →Stable |
| CounterA debt-to-equity score of only 3.3 out of 10 implies high leverage relative to peers, and high leverage in a cyclical downturn amplifies downside to earnings and equity returns. | ||
Rogers's forward price-to-earnings ratio of 10.7x is 2.6 times higher than its trailing price-to-earnings of approximately 4x, which signals analysts expect earnings to decline sharply — estimated at approximately 61% — as the current period represents a cyclical high rather than a stable run rate. Warnings | Earnings per share stabilize and do not decline more than 30% in the next four quarters, indicating the cyclical earnings peak was less severe than the forward multiple implied. | →Stable |
| CounterCanadian telecoms have historically maintained high earnings stability supported by oligopolistic market structure, and the forward earnings decline may be an analyst-model artifact rather than a business reality. | ||
The current price of $38.86 is already above the analyst price target zone, resulting in a negative upside of 11.5% to the take-profit target and an asymmetry ratio of negative 1.11 — meaning the risk-reward profile does not favor adding or initiating a position at current levels. V9 | Stock price declines to below $35 within 12 months, providing a more favorable entry point with positive upside asymmetry restored. | →Stable |
| CounterStrong momentum with a momentum score of 7.0 and RSI of 68 suggests the stock still has near-term upward momentum that could temporarily push prices even further above analyst targets before any mean reversion. | ||
Rogers has beaten earnings in 2 of the last 4 quarters but also missed in 2, including the most recent quarter where the actual result came in slightly below the estimate of $1.02 — indicating that despite a high average surprise driven by one outsized beat of 1,159%, underlying earnings consistency is not strong. Earnings | Rogers beats earnings estimates in at least 3 of the next 4 quarters with consistent positive surprises above 5%, indicating the cyclical peak concern is overblown. | ↓Deteriorating |
| CounterThe 1,159% earnings beat in one quarter was likely a one-time item that elevated the average surprise well beyond the sustainable trend and should not be treated as evidence of systematic outperformance. | ||
Rogers has an ROE of 41%, operating margins of 32%, a Piotroski F-Score of approximately 6.7 out of 9, and ranks in the top decile among peers on both ROE and quality — indicating the underlying business is well-run and generates strong returns on capital even if near-term earnings face cyclical pressure.
→StableQuality breakdown
- Expectation
- Return on equity remains above 30% over the next 12 months, confirming that capital allocation quality is not deteriorating alongside the cyclical earnings headwind.
CounterA debt-to-equity score of only 3.3 out of 10 implies high leverage relative to peers, and high leverage in a cyclical downturn amplifies downside to earnings and equity returns.
Rogers's forward price-to-earnings ratio of 10.7x is 2.6 times higher than its trailing price-to-earnings of approximately 4x, which signals analysts expect earnings to decline sharply — estimated at approximately 61% — as the current period represents a cyclical high rather than a stable run rate.
→StableWarnings
- Expectation
- Earnings per share stabilize and do not decline more than 30% in the next four quarters, indicating the cyclical earnings peak was less severe than the forward multiple implied.
CounterCanadian telecoms have historically maintained high earnings stability supported by oligopolistic market structure, and the forward earnings decline may be an analyst-model artifact rather than a business reality.
The current price of $38.86 is already above the analyst price target zone, resulting in a negative upside of 11.5% to the take-profit target and an asymmetry ratio of negative 1.11 — meaning the risk-reward profile does not favor adding or initiating a position at current levels.
→StableV9
- Expectation
- Stock price declines to below $35 within 12 months, providing a more favorable entry point with positive upside asymmetry restored.
CounterStrong momentum with a momentum score of 7.0 and RSI of 68 suggests the stock still has near-term upward momentum that could temporarily push prices even further above analyst targets before any mean reversion.
Rogers has beaten earnings in 2 of the last 4 quarters but also missed in 2, including the most recent quarter where the actual result came in slightly below the estimate of $1.02 — indicating that despite a high average surprise driven by one outsized beat of 1,159%, underlying earnings consistency is not strong.
↓DeterioratingEarnings
- Expectation
- Rogers beats earnings estimates in at least 3 of the next 4 quarters with consistent positive surprises above 5%, indicating the cyclical peak concern is overblown.
CounterThe 1,159% earnings beat in one quarter was likely a one-time item that elevated the average surprise well beyond the sustainable trend and should not be treated as evidence of systematic outperformance.
Per-dimension breakdown
Quality
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 2.6 |
| Gross margin | 4.9 |
| Op margin | 8.9 |
| Net margin | 10.0 |
| Current ratio | 2.2 |
| FCF quality | 9.1 |
| Moat | 6.1 |
| Piotroski F | 6.7 |
- ▸Excellent ROE: 31%
- ▸Strong margins: 27%
- ▸Excellent cash conversion: 123% FCF/NI
Growth
4.4/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 4.4 |
Momentum
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.0 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 7.5 |
| Volume | 2.1 |
- ▸Overbought (RSI 80)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat/negative + RSI 80 (late-cycle distribution risk)
Sentiment
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.1 |
| Price target | 7.3 |
| erm sentiment | 5.1 |
- ▸Light analyst coverage (3.0) — signal dampened
Insider
5.0/10data confidence 50%Peer rank
6.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.7 |
| quality rank | 9.6 |
| growth rank | 7.6 |
- ▸Attractive P/E vs peers
- ▸Superior ROE vs peers
Technical
2.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.3 |
| support resistance | 0.5 |
| 52w position | 8.0 |
Risk (lower is worse)
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| days to cover | 1.4 |
| volatility | 7.2 |
| put call | 10.0 |
| implied vol | 1.3 |
| max pain risk | 3.0 |
| beta | 8.2 |
| debt equity | 3.0 |
- ▸High IV: 72%
- ▸Above max pain $25
Catalyst
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 4.8 |
| dividend safety | 7.5 |
- ▸Strong earnings: 3B/1M
- ▸Dividend aristocrat: 3.9% yield
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:6.7>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:67d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.1=NEGATIVE
Warning (1)
- DEATH_CROSS:momentum=6.7>=5.0 recovering
Reward-to-Risk
-0.05
Upside
-0.6%
Downside
11.5%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 80
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 4.9 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 7.6) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.1=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.05 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 7.6, Quality at 6.7, and Momentum at 6.7; the weakest are Technical at 2.9, Growth at 4.4, and Risk (lower is worse) at 4.9. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.05 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Cyclical Earnings Peak Risk
Trip ifEarnings per share falls below $0.50 in any quarter over the next 12 months, confirming the cyclical earnings decline is materializing as the forward multiple implied.
- P2Strong Quality Metrics Telecom
Trip ifReturn on equity drops below 25% in any single reporting period, indicating the high-quality business metrics are deteriorating alongside earnings pressure.
- P3Negative Price Asymmetry
Trip ifStock price rises above $42 without analyst price target upgrades above $45, indicating the negative asymmetry situation is becoming even more unfavorable.
- P4Mixed Earnings Surprise Record
Trip ifEarnings surprise falls below -10% in at least 2 of the next 4 quarters, confirming persistent earnings miss pattern beyond the most recent quarter.