Value
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.6 |
| P/S | 9.5 |
| EV/EBITDA | 4.8 |
| Fwd P/E | 8.1 |
| PEG | 7.3 |
| Analyst target | 4.0 |
- ▸Forward P/E: 14.7x
- ▸PEG: 0.95
SMG · Why this verdict
Why Scotts Miracle-Gro Company (The (SMG) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score5.3/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The current price of $63.17 has reached the analyst consensus take-profit target of $63.22, with only 0.1% upside remaining, meaning the stock is priced at fair value with no margin of safety for new buyers entering at current levels. Targets | Analyst price targets are revised upward to at least $72 over 12 months, reflecting continued earnings growth, to reopen meaningful upside headroom. | →Stable |
| CounterA stock in a breakout pattern with golden cross technical structure and positive momentum can trade above analyst targets for extended periods when the underlying operational momentum is strong; analysts may simply be slow to update targets. | ||
Scotts is in a golden cross breakout pattern with an RSI of 64 and MACD bullish, above all major moving averages, with volume accumulation confirming institutional buying, suggesting the technical picture favors continued price strength if the fundamental earnings trend holds. Momentum breakdown | The golden cross pattern holds and the stock closes above $65 within 3 months, confirming the breakout is genuine rather than a false signal. | →Stable |
| CounterA breakout at exactly the analyst price target is a common distribution point; institutions that drove the rally may use the target-price milestone as a sell signal, capping further upside and potentially reversing the breakout. | ||
Scotts Miracle-Gro beat analyst earnings estimates in all 4 of the last 4 quarters including a 12.9% beat in the most recent quarter and a 23.3% beat the quarter before, demonstrating consistent ability to meet or exceed market expectations across seasonal agricultural cycles. Earnings | The earnings beat streak extends to at least 6 consecutive quarters with average surprise remaining above 8% over the next 12 months. | →Stable |
| CounterConsumer lawn and garden spending is highly weather-dependent and sensitive to housing market activity; a cool spring or construction slowdown could easily interrupt the beat streak as consumers delay outdoor spending. | ||
Free cash flow is 372% of net income and Scotts holds a Piotroski F-Score of 8 out of 9, indicating the company's accounting income substantially understates the real cash the business generates, which supports dividend sustainability and debt reduction. Quality breakdown | Free cash flow conversion remains above 200% of net income over the next 12 months, confirming the earnings quality advantage is structural rather than temporary. | →Stable |
| CounterThe elevated free cash flow relative to net income may reflect depreciation-heavy accounting rather than superior cash generation; the operating margin advantage dissipates if raw material costs increase in a commodity inflation cycle. | ||
The current price of $63.17 has reached the analyst consensus take-profit target of $63.22, with only 0.1% upside remaining, meaning the stock is priced at fair value with no margin of safety for new buyers entering at current levels.
→StableTargets
- Expectation
- Analyst price targets are revised upward to at least $72 over 12 months, reflecting continued earnings growth, to reopen meaningful upside headroom.
CounterA stock in a breakout pattern with golden cross technical structure and positive momentum can trade above analyst targets for extended periods when the underlying operational momentum is strong; analysts may simply be slow to update targets.
Scotts is in a golden cross breakout pattern with an RSI of 64 and MACD bullish, above all major moving averages, with volume accumulation confirming institutional buying, suggesting the technical picture favors continued price strength if the fundamental earnings trend holds.
→StableMomentum breakdown
- Expectation
- The golden cross pattern holds and the stock closes above $65 within 3 months, confirming the breakout is genuine rather than a false signal.
CounterA breakout at exactly the analyst price target is a common distribution point; institutions that drove the rally may use the target-price milestone as a sell signal, capping further upside and potentially reversing the breakout.
Scotts Miracle-Gro beat analyst earnings estimates in all 4 of the last 4 quarters including a 12.9% beat in the most recent quarter and a 23.3% beat the quarter before, demonstrating consistent ability to meet or exceed market expectations across seasonal agricultural cycles.
→StableEarnings
- Expectation
- The earnings beat streak extends to at least 6 consecutive quarters with average surprise remaining above 8% over the next 12 months.
CounterConsumer lawn and garden spending is highly weather-dependent and sensitive to housing market activity; a cool spring or construction slowdown could easily interrupt the beat streak as consumers delay outdoor spending.
Free cash flow is 372% of net income and Scotts holds a Piotroski F-Score of 8 out of 9, indicating the company's accounting income substantially understates the real cash the business generates, which supports dividend sustainability and debt reduction.
→StableQuality breakdown
- Expectation
- Free cash flow conversion remains above 200% of net income over the next 12 months, confirming the earnings quality advantage is structural rather than temporary.
CounterThe elevated free cash flow relative to net income may reflect depreciation-heavy accounting rather than superior cash generation; the operating margin advantage dissipates if raw material costs increase in a commodity inflation cycle.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Scotts Miracle-Gro beat earnings in all 4 of the last 4 quarters with an average surprise of 12.9% and converts 372% of net income to free cash flow, but the stock has reached analyst price targets with essentially zero upside remaining, making the entry timing poor despite sound operational performance.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROA | 5.9 |
| Gross margin | 2.5 |
| Op margin | 10.0 |
| Net margin | 1.6 |
| Current ratio | 4.8 |
| FCF quality | 10.0 |
| Moat | 4.4 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 372% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 8/9
Growth
3.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.8 |
| EPS growth | 3.7 |
Momentum
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 1.5 |
- ▸Overbought (RSI 71)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 4.5 |
| Analyst rating | 6.6 |
| Price target | 5.8 |
- ▸Light analyst coverage (6.0) — signal dampened
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
3.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.3 |
| quality rank | 2.2 |
| growth rank | 1.1 |
Technical
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.0 |
| support resistance | 1.6 |
| 52w position | 9.2 |
Risk (lower is worse)
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 3.6 |
| days to cover | 4.2 |
| volatility | 2.7 |
| put call | 5.4 |
| implied vol | 4.0 |
| beta | 4.0 |
Catalyst
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 8.9 |
| dividend safety | 5.0 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 383.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:7.0>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:25d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.6=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.55
Upside
-8.2%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeCatalyst-Driven — Earnings in 25d with 4/4 beat streak
SuitabilityAggressive — Beta 1.80>1.3, MCap $4.0B<$5B
Investment implication
The F-path SELL output reflects an overall score of 5.3 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Momentum at 7.0) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.6=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.55 — supplementary context, not the trigger for this path.
The strongest dimensions are Momentum at 7.0, Catalyst at 7.0, and Value at 6.7; the weakest are Peer rank at 3.4, Growth at 3.8, and Risk (lower is worse) at 4.0. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -0.55 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Four Quarter Beat Streak
Trip ifEPS surprise falls below 0% in at least 2 of the next 4 quarters.
- P2Exceptional Cash Conversion
Trip ifFree cash flow conversion falls below 100% of net income in any reported annual period.
- P3Price At Analyst Target Zero Upside
Trip ifAnalyst consensus price target remains below $65 for more than 6 months while price holds above $60, indicating the valuation gap has closed permanently.
- P4Positive Momentum Breakout
Trip ifStock price drops below $55, more than 13% below the current price of $63.17, indicating the breakout has failed.