Value
7.1/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 1.4 |
| P/S | 7.8 |
| EV/EBITDA | 2.4 |
| Fwd P/E | 8.6 |
| PEG | 10.0 |
- ▸Forward P/E: 13.1x
- ▸PEG: 0.19
- ▸Attractively valued
RSVR · Why this verdict
Why Reservoir Media (RSVR) 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 score5.1/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Reservoir Media's cheap valuation and growth profile are undercut by three consecutive earnings misses, a negative free-cash-flow quality flag, and a failed momentum gate, consistent with a call to consider reducing the position.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Reservoir Media trades at a forward P/E of 13.4x with a PEG of 0.20, supporting a strong growth-adjusted valuation profile. Valuation breakdown | The PEG ratio should stay well below 1.0 as revenue growth continues over the next 12 months. | →Stable |
| CounterA cheap PEG paired with consecutive earnings misses often signals the market correctly discounting near-term execution risk rather than a genuine value opportunity. | ||
Reservoir Media has missed consensus EPS in 3 of its last 4 quarters, with an average surprise of about -11%, a clear execution concern. Earnings | The company should return to beating or meeting consensus in the next reported quarter on 2026-08-04. | ↓Deteriorating |
| CounterRepeated misses across multiple quarters more often indicate a structural forecasting or business problem than a one-off issue that reverses quickly. | ||
Free cash flow is running at -812% of net income, an earnings-quality red flag, even as the Piotroski F-Score remains strong at 7 out of 9. Quality breakdown | FCF-to-net-income conversion should turn positive within the next two reported quarters. | ↓Deteriorating |
| CounterA single quarter's deeply negative FCF/NI ratio can reflect one-time working-capital swings, such as music catalog acquisition timing, rather than a persistent quality problem. | ||
Reservoir Media's momentum score of 3.3 falls below the 4.5 threshold, with falling on-balance volume signaling distribution even while price holds above its 200-day moving average. Warnings | The momentum score should climb back above 4.5 as volume trends turn from distribution to accumulation. | ↑Improving |
| CounterMomentum scores below threshold can reverse quickly on a single earnings beat, especially for a name already priced for cheap growth. | ||
Reservoir Media trades at a forward P/E of 13.4x with a PEG of 0.20, supporting a strong growth-adjusted valuation profile.
→StableValuation breakdown
- Expectation
- The PEG ratio should stay well below 1.0 as revenue growth continues over the next 12 months.
CounterA cheap PEG paired with consecutive earnings misses often signals the market correctly discounting near-term execution risk rather than a genuine value opportunity.
Reservoir Media has missed consensus EPS in 3 of its last 4 quarters, with an average surprise of about -11%, a clear execution concern.
↓DeterioratingEarnings
- Expectation
- The company should return to beating or meeting consensus in the next reported quarter on 2026-08-04.
CounterRepeated misses across multiple quarters more often indicate a structural forecasting or business problem than a one-off issue that reverses quickly.
Free cash flow is running at -812% of net income, an earnings-quality red flag, even as the Piotroski F-Score remains strong at 7 out of 9.
↓DeterioratingQuality breakdown
- Expectation
- FCF-to-net-income conversion should turn positive within the next two reported quarters.
CounterA single quarter's deeply negative FCF/NI ratio can reflect one-time working-capital swings, such as music catalog acquisition timing, rather than a persistent quality problem.
Reservoir Media's momentum score of 3.3 falls below the 4.5 threshold, with falling on-balance volume signaling distribution even while price holds above its 200-day moving average.
↑ImprovingWarnings
- Expectation
- The momentum score should climb back above 4.5 as volume trends turn from distribution to accumulation.
CounterMomentum scores below threshold can reverse quickly on a single earnings beat, especially for a name already priced for cheap growth.
Per-dimension breakdown
Quality
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.7 |
| ROA | 1.8 |
| Gross margin | 8.9 |
| Op margin | 5.2 |
| Net margin | 2.4 |
| Current ratio | 4.9 |
| FCF quality | 0.0 |
| Moat | 6.4 |
| Piotroski F | 7.8 |
- ▸Earnings quality RED FLAG: -754% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
5.4/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 5.4 |
Momentum
3.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 7.9 |
| MACD | 2.5 |
| OBV | 1.0 |
| MA position | 4.0 |
| Volume | 1.1 |
- ▸Uptrend pullback (RSI 36) - buy opportunity
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.9 |
| Price target | 8.6 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (2.0) — signal dampened
- ▸Analyst upside: 31%
Insider
4.2/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 4.6 |
| notable moves | 3.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
4.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.8 |
| quality rank | 4.3 |
| growth rank | 5.9 |
Technical
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 7.5 |
| support resistance | 8.8 |
| 52w position | 4.9 |
Risk (lower is worse)
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.8 |
| days to cover | 2.3 |
| volatility | 3.4 |
| put call | 6.7 |
| implied vol | 0.0 |
| beta | 8.5 |
| debt equity | 4.5 |
- ▸High IV: 86%
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
2.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 1.1 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
- ▸Earnings concerns: 1B/2M
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- ASYMMETRY:1.5>=1.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:80d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- MOMENTUM:3.3<4.5
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
1.52
Upside
+11.1%
Downside
7.3%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeInst Constrain — Small cap ($0.7B) below institutional reach
SuitabilityAggressive — MCap $0.7B<$5B
Investment implication
The F-path SELL output reflects an overall score of 4.6 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 7.1) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:3.3<4.5) reinforce the read. Current asymmetry R:R is 1.52 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 7.1, Technical at 7.1, and Sentiment at 6.5; the weakest are Catalyst at 2.8, Momentum at 3.3, and Peer rank at 4.0. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 1.52 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Cheap Valuation With Growth
Trip ifPEG ratio rises above 1.0 without a corresponding slowdown being priced in.
- P2Consecutive Earnings Misses
Trip ifReservoir Media misses consensus EPS in the next reported quarter (surprise below 0%).
- P3Negative Fcf Earnings Quality Flag
Trip ifFCF-to-net-income conversion stays below -100% for 2 consecutive quarters.
- P4Momentum Gate Failure
Trip ifThe momentum score stays below 4.5 for 2 consecutive quarters.