Value
8.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 8.7 |
| P/S | 10.0 |
| EV/EBITDA | 8.2 |
| Fwd P/E | 9.4 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 9.3x
- ▸PEG: 0.43
- ▸Attractively valued
SMP · Why this verdict
Why Standard Motor Products (SMP) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score5.9/10
ConfidenceHIGH
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Standard Motor Products is a cheap (7.6x forward P/E), cash-generative dividend payer with a perfect four-quarter beat streak, but it has no moat, slow growth and earnings due in 6 days.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Cash conversion is excellent at 255% of net income and the Piotroski F-Score is 8/9, though the company has no competitive moat. Quality breakdown | Free cash flow stays above net income and the F-Score stays at 7/9 or better over 12 months. | →Stable |
| CounterA 255% FCF/NI ratio can come from a working-capital release that reverses, and growth scores only 4.3/10. | ||
The company is a dividend aristocrat with a 3.5% yield and a dividend safety score of 8.5/10. Catalyst breakdown | The dividend is maintained or raised over the next 12 months. | ↓Deteriorating |
| CounterNotable insider selling of $918,156 and slow revenue growth could signal weaker confidence in sustaining payout growth. | ||
The stock is attractively valued at a forward P/E of 7.6x and a PEG of 0.41, with a margin of safety of 46%. Valuation breakdown | The forward P/E stays below 12x as earnings hold up over the next 12 months. | ↓Deteriorating |
| CounterAuto-parts earnings are cyclical, and the Consumer Cyclical sector modifier of -1.5 reflects macro risk that could compress earnings and make low multiples look deceptive. | ||
SMP has beaten EPS estimates in all 4 recent quarters, averaging a +10.4% surprise. Earnings | EPS meets or beats consensus in the report due 2026-10-30 and the following quarters. | ↓Deteriorating |
| CounterThe latest beat was only +0.5%, so the streak is thinning, and a miss in the 6-day window before earnings would end it. | ||
The $42.50 analyst target sits 14.0% above the $37.27 price, a reward-to-risk of 2.0 against 7.0% downside to the stop. Estimated upside | The price moves toward the analyst target after the earnings report. | →Stable |
| CounterCoverage is light (3 analysts) and the price is below its 200-day average, so the target may not be reached. | ||
Cash conversion is excellent at 255% of net income and the Piotroski F-Score is 8/9, though the company has no competitive moat.
→StableQuality breakdown
- Expectation
- Free cash flow stays above net income and the F-Score stays at 7/9 or better over 12 months.
CounterA 255% FCF/NI ratio can come from a working-capital release that reverses, and growth scores only 4.3/10.
The company is a dividend aristocrat with a 3.5% yield and a dividend safety score of 8.5/10.
↓DeterioratingCatalyst breakdown
- Expectation
- The dividend is maintained or raised over the next 12 months.
CounterNotable insider selling of $918,156 and slow revenue growth could signal weaker confidence in sustaining payout growth.
The stock is attractively valued at a forward P/E of 7.6x and a PEG of 0.41, with a margin of safety of 46%.
↓DeterioratingValuation breakdown
- Expectation
- The forward P/E stays below 12x as earnings hold up over the next 12 months.
CounterAuto-parts earnings are cyclical, and the Consumer Cyclical sector modifier of -1.5 reflects macro risk that could compress earnings and make low multiples look deceptive.
SMP has beaten EPS estimates in all 4 recent quarters, averaging a +10.4% surprise.
↓DeterioratingEarnings
- Expectation
- EPS meets or beats consensus in the report due 2026-10-30 and the following quarters.
CounterThe latest beat was only +0.5%, so the streak is thinning, and a miss in the 6-day window before earnings would end it.
The $42.50 analyst target sits 14.0% above the $37.27 price, a reward-to-risk of 2.0 against 7.0% downside to the stop.
→StableEstimated upside
- Expectation
- The price moves toward the analyst target after the earnings report.
CounterCoverage is light (3 analysts) and the price is below its 200-day average, so the target may not be reached.
Per-dimension breakdown
Quality
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.3 |
| ROA | 4.2 |
| Gross margin | 2.4 |
| Op margin | 5.1 |
| Net margin | 1.9 |
| Current ratio | 6.4 |
| FCF quality | 10.0 |
| Moat | 4.2 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 261% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 8/9
Growth
4.6/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.9 |
| EPS growth | 6.3 |
Momentum
8.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.7 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 8.0 |
- ▸Overbought (RSI 86)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.1 |
| Analyst rating | 6.8 |
| Price target | 6.7 |
- ▸Light analyst coverage (3.0) — signal dampened
Insider
4.0/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 5.5 |
- ▸Modest insider selling — $918,156 (0.090% of mkt cap)
Peer rank
5.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.8 |
| quality rank | 5.8 |
| growth rank | 3.7 |
Technical
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 1.4 |
| 52w position | 9.3 |
Risk (lower is worse)
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.1 |
| days to cover | 3.4 |
| volatility | 4.0 |
| put call | 10.0 |
| implied vol | 3.7 |
| max pain risk | 3.0 |
| beta | 8.2 |
| debt equity | 6.2 |
- ▸Above max pain $18
Catalyst
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 6.4 |
| dividend safety | 6.8 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:8.1>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_BOOST:ANALYST:0.60
- EARNINGS_PROXIMITY:113d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.3=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.35
Upside
-5.3%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeInst Constrain — Small cap ($1.0B) below institutional reach
SuitabilityAggressive — MCap $1.0B<$5B
Investment implication
The F-path SELL output reflects an overall score of 3.9 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 8.3) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.3=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.35 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 8.3, Momentum at 8.1, and Catalyst at 6.9; the weakest are Technical at 3.6, Insider at 4.0, and Growth at 4.6. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -0.35 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Earnings Beat Streak
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P2Excellent Cash Conversion
Trip ifFree cash flow to net income falls below 80% from the current 255%.
- P3Low Multiple Valuation
Trip ifForward P/E rises above 12x from the current 7.6x.
- P4Dividend Aristocrat Income
Trip ifThe dividend safety score falls below 6.0 from the current 8.5.
- P5Analyst Target Upside
Trip ifPrice falls below the $35.35 stop level from the current $37.27.