Value
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.4 |
| P/S | 9.2 |
| EV/EBITDA | 3.8 |
| Fwd P/E | 7.2 |
| PEG | 4.7 |
| Analyst target | 6.0 |
- ▸Forward P/E: 17.3x
- ▸PEG: 1.77
RPM · Why this verdict
Why RPM International (RPM) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictBUY WAIT
Overall score5.6/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
RPM International is a specialty coatings and sealants company with superior return on equity relative to peers and strong analyst sentiment, but double concentration risks in both customer and supplier relationships, and the stock has essentially reached its analyst price target with minimal remaining upside at current levels.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Two separate high-priority concentration risks exist simultaneously: key Consumer segment customers represent 65% of that segment's revenue, and sole-source suppliers create input cost and availability vulnerability — a paired risk that is uncommon even within specialty chemicals peers. Bear case | Both concentration metrics improve over 12 months as RPM adds new consumer retail distribution partnerships and qualifies alternative suppliers for its highest-risk inputs, reducing each below 55% and zero sole-source critical inputs respectively. | →Stable |
| CounterSpecialty coatings companies inherently serve concentrated retail distribution channels such as home improvement retailers; the customer concentration reflects industry structure rather than poor commercial strategy. | ||
Earnings results in the last four quarters were mixed — 2 beats, 1 miss, and 1 inline — with a notable 15% miss in January 2026 indicating that the business is more cyclically sensitive to input costs and volume than the steady revenue base implies. Earnings | EPS beats in at least 3 of the next 4 quarters as raw material costs normalize from elevated levels and the consumer-facing segment benefits from household formation and renovation spending recovery. | ↓Deteriorating |
| CounterSpecialty chemicals companies inherently have quarterly earnings variability from raw material timing and seasonal construction patterns; the miss pattern may reflect quarterly noise rather than a structural margin problem. | ||
The current price of $108.85 is within 3% of the analyst consensus target of $112.11, leaving minimal near-term upside from current levels and placing new buyers in a situation where any execution setback or macro headwind could produce a drawdown larger than the remaining upside. Warnings | Analyst consensus price targets are revised upward to above $125 within 12 months following evidence that Construction Products Group margins are recovering and international operations are benefiting from currency normalization. | →Stable |
| CounterRPM's analyst coverage is high-quality and diverse; a near-target price often indicates the market has efficiently priced near-term expectations, and continued operational execution can generate additional earnings-driven target upgrades. | ||
Return on equity and return on assets rank in the top tier of the specialty chemicals peer group with a quality peer rank score of 7.8 out of 10, reflecting RPM's ability to generate above-average returns from its portfolio of branded coatings and sealants businesses. Peer-rank breakdown | Return on equity remains above 18% over the next four quarters as margin improvement initiatives and volume leverage continue to compound shareholder returns. | →Stable |
| CounterFree cash flow conversion of only 57% of net income represents a meaningful quality concern, suggesting that RPM's reported earnings are less cash-generative than the headline return on equity implies. | ||
Two separate high-priority concentration risks exist simultaneously: key Consumer segment customers represent 65% of that segment's revenue, and sole-source suppliers create input cost and availability vulnerability — a paired risk that is uncommon even within specialty chemicals peers.
→StableBear case
- Expectation
- Both concentration metrics improve over 12 months as RPM adds new consumer retail distribution partnerships and qualifies alternative suppliers for its highest-risk inputs, reducing each below 55% and zero sole-source critical inputs respectively.
CounterSpecialty coatings companies inherently serve concentrated retail distribution channels such as home improvement retailers; the customer concentration reflects industry structure rather than poor commercial strategy.
Earnings results in the last four quarters were mixed — 2 beats, 1 miss, and 1 inline — with a notable 15% miss in January 2026 indicating that the business is more cyclically sensitive to input costs and volume than the steady revenue base implies.
↓DeterioratingEarnings
- Expectation
- EPS beats in at least 3 of the next 4 quarters as raw material costs normalize from elevated levels and the consumer-facing segment benefits from household formation and renovation spending recovery.
CounterSpecialty chemicals companies inherently have quarterly earnings variability from raw material timing and seasonal construction patterns; the miss pattern may reflect quarterly noise rather than a structural margin problem.
The current price of $108.85 is within 3% of the analyst consensus target of $112.11, leaving minimal near-term upside from current levels and placing new buyers in a situation where any execution setback or macro headwind could produce a drawdown larger than the remaining upside.
→StableWarnings
- Expectation
- Analyst consensus price targets are revised upward to above $125 within 12 months following evidence that Construction Products Group margins are recovering and international operations are benefiting from currency normalization.
CounterRPM's analyst coverage is high-quality and diverse; a near-target price often indicates the market has efficiently priced near-term expectations, and continued operational execution can generate additional earnings-driven target upgrades.
Return on equity and return on assets rank in the top tier of the specialty chemicals peer group with a quality peer rank score of 7.8 out of 10, reflecting RPM's ability to generate above-average returns from its portfolio of branded coatings and sealants businesses.
→StablePeer-rank breakdown
- Expectation
- Return on equity remains above 18% over the next four quarters as margin improvement initiatives and volume leverage continue to compound shareholder returns.
CounterFree cash flow conversion of only 57% of net income represents a meaningful quality concern, suggesting that RPM's reported earnings are less cash-generative than the headline return on equity implies.
Per-dimension breakdown
Quality
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 7.6 |
| ROA | 5.4 |
| Gross margin | 4.3 |
| Op margin | 2.6 |
| Net margin | 4.3 |
| Current ratio | 7.8 |
| FCF quality | 4.5 |
| Moat | 6.1 |
| Piotroski F | 7.8 |
- ▸Earnings quality warning: 57% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
3.4/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.7 |
| EPS growth | 2.0 |
Momentum
2.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 1.0 |
| Volume | 7.1 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -2.0%/30d — confirmed downtrend
Sentiment
7.7/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.0 |
| Analyst rating | 8.6 |
| Price target | 8.3 |
- ▸Analyst upside: 27%
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.4 |
| quality rank | 8.0 |
| growth rank | 6.8 |
- ▸Superior ROE vs peers
Technical
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.3 |
| support resistance | 8.5 |
| 52w position | 6.0 |
Risk (lower is worse)
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.2 |
| days to cover | 5.6 |
| volatility | 5.0 |
| beta | 6.9 |
| debt equity | 5.5 |
- ▸Concentration risks: 2 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 9.3 |
| dividend safety | 6.5 |
| news activity | 5.0 |
- ▸Earnings in 1 days
How the verdict was assembled
Engine trigger
Earnings in 1 day. Wait until post-earnings.
Engine technical detail
verdict_path:
L3:NEWS_BLOCK|ENTRY_STICKY:PRIOR_STILL_VIABLEPassed (4)
- ASYMMETRY:1.7>=1.5
- INSIDER:OK
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:2.5<4.5
- DEATH_CROSS:HARD_BLOCK
- EARNINGS_PROXIMITY:1d<=7d
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
1.74
Upside
+10.4%
Downside
6.0%
Sizing output
STARTER
SetupFalling Knife — Death cross, below all MAs, RSI 30, MACD bearish
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
A recent news event triggered an L3 news-block on the verdict path. Trigger: Earnings in 1 day. Wait until post-earnings. The 10-dimension scores remain Sentiment at 7.7 (strongest), but MOMENTUM:2.5<4.5 also fails — the news block is the proximate trigger, not the sole driver.
The strongest dimensions are Sentiment at 7.7, Technical at 7.6, and Insider at 7.3; the weakest are Momentum at 2.5, Growth at 3.4, and Quality at 5.6. The V9 engine flagged 3 failed gates with 1 warning, producing an asymmetric reward-to-risk of 1.74 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Dual Concentration Customer Supplier
Trip ifRevenue from any single customer channel grows to represent more than 40% of Consumer segment sales, increasing concentration beyond current levels.
- P2Superior Roe Versus Peers
Trip ifReturn on equity falls below 14% for 2 consecutive quarters, indicating the peer-leading capital efficiency advantage is eroding.
- P3Price At Analyst Target Minimal Upside
Trip ifPrice falls below $98, more than 10% below the current $108.85, while analyst targets remain above $105, indicating the market is applying a discount below even the more conservative analyst fair value estimates.
- P4Earnings Variability Below Expectations
Trip ifEPS surprise falls below 0% in at least 3 of the next 4 quarters, confirming the mixed earnings execution is deteriorating into a sustained miss pattern.