Value
7.1/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 2.5 |
| P/S | 9.6 |
| EV/EBITDA | 3.1 |
| Fwd P/E | 6.9 |
| PEG | 10.0 |
- ▸Forward P/E: 18.4x
- ▸PEG: 0.11
- ▸Attractively valued
RGR · Why this verdict
Why Sturm, Ruger & Company (RGR) 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 score6.0/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Sturm, Ruger screens as growth-adjusted cheap and conservatively financed with recent insider buying, but sub-floor quality, a failed momentum gate, and a persistent earnings-miss streak suggest the market's caution may be well founded.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Ruger trades at a forward P/E of 19.0x but an unusually low PEG ratio of 0.05, suggesting that relative to its modest earnings growth trajectory, the market may be underpricing the stock's growth-adjusted value. Valuation breakdown | The PEG ratio should stay well below 0.5 as earnings growth is realized, or the forward P/E should compress if growth disappoints. | →Stable |
| CounterA PEG this low on a mature firearms manufacturer with only 3.5% revenue growth likely reflects a temporarily depressed earnings base rather than genuine undervaluation. | ||
Business quality sits below the engine's minimum floor (2.6 versus 4.0), reflecting no competitive moat and weak overall quality metrics for what is otherwise a conservatively financed manufacturer. Bear case | The quality score should recover above the 4.0 floor as margins stabilize or improve. | ↑Improving |
| CounterFirearms is a mature, cyclical industry where moat-based quality scoring may understate the value of Ruger's brand recognition and distribution network, both of which are hard to quantify in these metrics. | ||
The stock is below its 200-day moving average, but that average is still rising (+1.8% over 30 days), which the engine reads as a pullback within an uptrend rather than a confirmed trend reversal. Momentum breakdown | The stock should reclaim its 200-day moving average within a few months if the pullback thesis is correct, without the moving average itself turning negative. | ↓Deteriorating |
| CounterFalling on-balance volume during the pullback could instead be an early warning that the uptrend is losing conviction and about to roll over into a genuine downtrend. | ||
Ruger has missed consensus estimates in 3 of its last 4 quarters with an average surprise of -24.8%, indicating persistent earnings underperformance versus analyst expectations. Avg surprise pct | The company should meet or beat consensus at its next report, breaking the miss streak. | ↓Deteriorating |
| CounterConsistent misses in a cyclical, promotion-sensitive business like firearms may simply reflect analysts overestimating demand each quarter, a pattern that could easily continue. | ||
Insiders have been net buyers recently (signal: bullish, $288,615 across 3 purchases over 90 days), a modest positive signal that stands in contrast to the otherwise weak quality and momentum picture. Insider transaction read | Insider buying should continue or at minimum not reverse into net selling over the next quarter. | ↓Deteriorating |
| CounterAt only 0.048% of market cap, this buying is too small to carry strong signal value and may reflect routine compensation-related purchases rather than a conviction bet. | ||
Ruger trades at a forward P/E of 19.0x but an unusually low PEG ratio of 0.05, suggesting that relative to its modest earnings growth trajectory, the market may be underpricing the stock's growth-adjusted value.
→StableValuation breakdown
- Expectation
- The PEG ratio should stay well below 0.5 as earnings growth is realized, or the forward P/E should compress if growth disappoints.
CounterA PEG this low on a mature firearms manufacturer with only 3.5% revenue growth likely reflects a temporarily depressed earnings base rather than genuine undervaluation.
Business quality sits below the engine's minimum floor (2.6 versus 4.0), reflecting no competitive moat and weak overall quality metrics for what is otherwise a conservatively financed manufacturer.
↑ImprovingBear case
- Expectation
- The quality score should recover above the 4.0 floor as margins stabilize or improve.
CounterFirearms is a mature, cyclical industry where moat-based quality scoring may understate the value of Ruger's brand recognition and distribution network, both of which are hard to quantify in these metrics.
The stock is below its 200-day moving average, but that average is still rising (+1.8% over 30 days), which the engine reads as a pullback within an uptrend rather than a confirmed trend reversal.
↓DeterioratingMomentum breakdown
- Expectation
- The stock should reclaim its 200-day moving average within a few months if the pullback thesis is correct, without the moving average itself turning negative.
CounterFalling on-balance volume during the pullback could instead be an early warning that the uptrend is losing conviction and about to roll over into a genuine downtrend.
Ruger has missed consensus estimates in 3 of its last 4 quarters with an average surprise of -24.8%, indicating persistent earnings underperformance versus analyst expectations.
↓DeterioratingAvg surprise pct
- Expectation
- The company should meet or beat consensus at its next report, breaking the miss streak.
CounterConsistent misses in a cyclical, promotion-sensitive business like firearms may simply reflect analysts overestimating demand each quarter, a pattern that could easily continue.
Insiders have been net buyers recently (signal: bullish, $288,615 across 3 purchases over 90 days), a modest positive signal that stands in contrast to the otherwise weak quality and momentum picture.
↓DeterioratingInsider transaction read
- Expectation
- Insider buying should continue or at minimum not reverse into net selling over the next quarter.
CounterAt only 0.048% of market cap, this buying is too small to carry strong signal value and may reflect routine compensation-related purchases rather than a conviction bet.
Per-dimension breakdown
Quality
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.4 |
| ROA | 1.0 |
| Gross margin | 0.0 |
| Op margin | 2.1 |
| Net margin | 1.1 |
| Current ratio | 9.7 |
| FCF quality | 10.0 |
| Moat | 6.4 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 309% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
8.7/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 7.3 |
| EPS growth | 10.0 |
Momentum
1.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 2.0 |
| OBV | 1.0 |
| MA position | 1.0 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -1.8%/30d — confirmed downtrend
Sentiment
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.9 |
| Price target | 7.1 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (2.0) — signal dampened
Insider
7.5/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.5 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Insider buying (low materiality) — $98,615 (0.017% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.4 |
| quality rank | 2.6 |
| growth rank | 4.7 |
- ▸Conservative debt levels
Technical
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.0 |
| support resistance | 8.2 |
| 52w position | 5.6 |
Risk (lower is worse)
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.2 |
| days to cover | 6.9 |
| volatility | 4.8 |
| put call | 7.2 |
| implied vol | 5.1 |
| beta | 10.0 |
| debt equity | 10.0 |
Catalyst
3.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| dividend safety | 5.8 |
- ▸Earnings concerns: 1B/3M
How the verdict was assembled
Engine trigger
Mixed signals. Hold existing position. | News modifier -1 (HOLD_IF_HOLDING → SELL_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_F_HOLD_DEFAULT|L3:NEWS_MOD=-1Passed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:78d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:1.7<4.5
- ASYMMETRY:-0.4=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.37
Upside
-2.3%
Downside
6.2%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeInst Constrain — Small cap ($0.6B) below institutional reach
SuitabilityAggressive — MCap $0.6B<$5B
Investment implication
The default F-path HOLD fired without any positive-conviction gate triggering — no momentum acceleration, no quality+value crossover, no setup recognition. Highest-clear gate: INSIDER:OK. Top dim: Growth at 8.7; weakest: Momentum at 1.7. The engine's read is one of pattern absence — no directional conviction in either direction at current asymmetry.
The strongest dimensions are Growth at 8.7, Insider at 7.5, and Risk (lower is worse) at 7.5; the weakest are Momentum at 1.7, Catalyst at 3.2, and Quality at 4.5. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -0.37 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Growth Adjusted Cheap Valuation
Trip ifForward P/E rises above 25x without a corresponding increase in earnings growth above 5%.
- P2Quality Below Floor
Trip ifQuality score stays below 3.0 out of 10 for 2 consecutive quarterly refreshes.
- P3Pullback Not Confirmed Weakness
Trip ifThe 200-day moving average slope turns negative (falls below 0%) over the next 30 days.
- P4Earnings Miss Pattern
Trip ifThe company misses consensus EPS by more than 15% for a 4th consecutive quarter.
- P5Recent Insider Buying
Trip ifInsiders become net sellers, with sell value that exceeds $500,000 over a rolling 90-day period.