Value
8.1/10data confidence 83%| Component | Sub-score |
|---|---|
| P/S | 9.8 |
| EV/EBITDA | 7.9 |
| Fwd P/E | 9.6 |
| PEG | 10.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 7.6x
- ▸PEG: 0.04
- ▸Attractively valued
SMPL · Why this verdict
Why The Simply Good Foods (SMPL) 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 score5.2/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Simply Good Foods trades at a forward P/E of 7.1x with a PEG of 0.03, offering deep value ahead of an imminent earnings event where the company has beaten estimates in 3 of the last 4 quarters, though a confirmed price downtrend and high short interest of 12% present meaningful near-term risk.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
With a forward P/E of 7.1x and a PEG ratio of 0.03, the stock is attractively priced relative to its earnings power, offering significant upside if sentiment recovers. Valuation breakdown | Price closes the gap toward analyst targets around $15 over the next 12 months as the valuation discount compresses. | ↓Deteriorating |
| CounterA forward P/E this low may reflect structural margin pressure given declining revenue of -9%, making value a trap rather than an opportunity. | ||
The company has beaten earnings estimates in 3 of the last 4 quarters with an average positive surprise of about 5%, and the next earnings report is only 9 days away, creating a near-term catalyst window. Earnings | A fourth consecutive beat in the upcoming report lifts the stock toward the $15 analyst target over the following quarter. | →Stable |
| CounterThe stock is in an overbought bear-rally condition (RSI 70) heading into earnings, meaning even a beat may already be priced in at current levels. | ||
The stock is trading below its 200-day moving average with a 30-day slope of -13.2%, indicating a confirmed price downtrend that limits the probability of sustained recovery without a fundamental catalyst. Momentum breakdown | Price must reclaim the 200-day moving average and sustain positive momentum for the recovery thesis to hold. | ↑Improving |
| CounterMACD is improving and RSI has reached 70, suggesting the downtrend may be breaking and near-term momentum is shifting upward. | ||
Short interest of 12% creates a bilateral risk: a strong earnings catalyst could trigger a short squeeze amplifying any upside, while continued weakness could signal fundamentally justified short pressure. Key risks | Short interest falls below 8% over 12 months as positive earnings surprises force short covering. | →Stable |
| CounterHigh short interest of 12% often signals informed sellers who have done deeper due diligence, and the declining revenue trend supports the bear case. | ||
With a forward P/E of 7.1x and a PEG ratio of 0.03, the stock is attractively priced relative to its earnings power, offering significant upside if sentiment recovers.
↓DeterioratingValuation breakdown
- Expectation
- Price closes the gap toward analyst targets around $15 over the next 12 months as the valuation discount compresses.
CounterA forward P/E this low may reflect structural margin pressure given declining revenue of -9%, making value a trap rather than an opportunity.
The company has beaten earnings estimates in 3 of the last 4 quarters with an average positive surprise of about 5%, and the next earnings report is only 9 days away, creating a near-term catalyst window.
→StableEarnings
- Expectation
- A fourth consecutive beat in the upcoming report lifts the stock toward the $15 analyst target over the following quarter.
CounterThe stock is in an overbought bear-rally condition (RSI 70) heading into earnings, meaning even a beat may already be priced in at current levels.
The stock is trading below its 200-day moving average with a 30-day slope of -13.2%, indicating a confirmed price downtrend that limits the probability of sustained recovery without a fundamental catalyst.
↑ImprovingMomentum breakdown
- Expectation
- Price must reclaim the 200-day moving average and sustain positive momentum for the recovery thesis to hold.
CounterMACD is improving and RSI has reached 70, suggesting the downtrend may be breaking and near-term momentum is shifting upward.
Short interest of 12% creates a bilateral risk: a strong earnings catalyst could trigger a short squeeze amplifying any upside, while continued weakness could signal fundamentally justified short pressure.
→StableKey risks
- Expectation
- Short interest falls below 8% over 12 months as positive earnings surprises force short covering.
CounterHigh short interest of 12% often signals informed sellers who have done deeper due diligence, and the declining revenue trend supports the bear case.
Per-dimension breakdown
Quality
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 3.4 |
| Gross margin | 2.6 |
| Op margin | 5.7 |
| Net margin | 0.0 |
| Current ratio | 7.4 |
| Moat | 4.0 |
| Piotroski F | 8.9 |
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 8/9
Growth
5.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 0.1 |
| EPS growth | 10.0 |
- ▸Declining revenue: -10%
Momentum
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.4 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 0.5 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -9.8%/30d — confirmed downtrend
Sentiment
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 4.2 |
| erm sentiment | 3.7 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
3.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.6 |
| quality rank | 1.3 |
| growth rank | 0.0 |
- ▸Conservative debt levels
Technical
1.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.1 |
| 52w position | 0.0 |
| gap | 6.0 |
Risk (lower is worse)
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 2.0 |
| days to cover | 6.8 |
| volatility | 0.0 |
| put call | 10.0 |
| implied vol | 2.6 |
| beta | 10.0 |
| debt equity | 8.9 |
- ▸High short interest justified: 15%
- ▸High IV: 65%
- ▸Concentration risks: 1 HIGH, 2 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 3.5 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 9.0 |
- ▸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:6.0>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:64d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.2=NEGATIVE
Warning (1)
- DEATH_CROSS:momentum=6.0>=5.0 recovering
Reward-to-Risk
-1.18
Upside
-17.7%
Downside
15.0%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 66
EdgeInst Constrain — Small cap ($1.1B) below institutional reach
SuitabilitySpeculative — Drawdown -51% (>40% off 52w high)
Investment implication
The F-path SELL output reflects an overall score of 5.5 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 8.1) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-1.2=NEGATIVE) reinforce the read. Current asymmetry R:R is -1.18 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 8.1, Catalyst at 6.9, and Momentum at 6.0; the weakest are Technical at 1.5, Peer rank at 3.8, and Quality at 4.0. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -1.18 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Deep Value At 7x Forward Earnings
Trip ifForward P/E rises above 15x or revenue growth declines to below -15% in any reported quarter, indicating the value thesis has either been realized or fundamentally deteriorated.
- P2Earnings Beat Streak Near Catalyst
Trip ifEPS surprise falls below 0% in at least 2 of the next 3 quarters, signaling the earnings beat streak has broken.
- P3Price Downtrend Technical Headwind
Trip ifPrice drops below $11.00, more than 12% below the current $12.51, confirming the downtrend has accelerated rather than reversed.
- P4High Short Interest Squeeze Risk
Trip ifShort interest rises above 15% or exceeds 3x the current days-to-cover ratio, indicating growing conviction among short sellers.