Value
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.4 |
| P/S | 10.0 |
| EV/EBITDA | 10.0 |
| Fwd P/E | 6.5 |
| PEG | 4.9 |
| Analyst target | 6.0 |
- ▸Forward P/E: 19.8x
- ▸PEG: 1.57
- ▸Attractively valued
SONY · Why this verdict
Why Sony Group (SONY) 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 score5.8/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Sony Group trades in a confirmed death-cross downtrend below all moving averages with RSI at 34 and burning cash at the operating level, but analysts see roughly 44% upside to consensus targets and the stock is near Bollinger lower-band technical support that has historically preceded reversals.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Sony's free cash flow is negative at approximately -2% of revenue, and the overall quality score of 3.3 falls below the minimum investability threshold, primarily because cash-burning operations reduce the margin of safety for equity holders. Quality breakdown | Free cash flow turns positive (above 0% of revenue) within the next 4 reported quarters, demonstrating that the cash burn is cyclical rather than structural. | →Stable |
| CounterWith gross margin scored at only 2.2 out of 10 and operating margin at 3.0 out of 10, the structural margin profile suggests free cash flow improvement requires a fundamental business model shift, not just cyclical recovery. | ||
Despite weak near-term technical conditions, analysts hold a price target consensus implying approximately 44% upside from the current $20.40 price, with an analyst rating score of 7.11 out of 10 and a price target score of 9.3 out of 10. Sentiment breakdown | The stock appreciates at least 20% toward analyst targets over 12 months, reaching $24.50 or higher, as the technical downtrend stabilizes and fundamental re-rating occurs. | ↓Deteriorating |
| CounterOnly 4 analysts cover the ADR, which the model flags as dampening signal reliability, and the quality score of 3.3 falls below the minimum 4.0 threshold, meaning the business may structurally deserve a low valuation. | ||
The short interest and days-to-cover scores are among the highest in the risk model (9.9 and 9.6 out of 10 respectively), and the Bollinger Band and support/resistance technical scores are also very high (10.0 and 9.8), indicating the stock is extremely oversold near meaningful technical support. Risk breakdown | The stock holds above the current support level near $19.72 and begins recovering toward $22 or higher within 6 months as oversold technical conditions resolve. | →Stable |
| CounterA confirmed death cross with the 200-day moving average slope declining at -2.6% per month indicates the trend is well-established, and oversold conditions can persist for extended periods in confirmed downtrends. | ||
Sony is in a confirmed falling-knife technical pattern with a death cross in place, the stock trading below all moving averages, RSI at 34, falling on-balance volume, and a 200-day moving average declining at -2.6% per month. Momentum breakdown | The moving average convergence-divergence indicator crosses above zero and the stock reclaims its 50-day moving average within 6 months, signaling early trend reversal. | ↑Improving |
| CounterDeath cross patterns with confirmed downward-sloping long-term moving averages have historically required 6 to 18 months to fully resolve, and the stock may continue falling even with strong analyst targets in place. | ||
Sony's free cash flow is negative at approximately -2% of revenue, and the overall quality score of 3.3 falls below the minimum investability threshold, primarily because cash-burning operations reduce the margin of safety for equity holders.
→StableQuality breakdown
- Expectation
- Free cash flow turns positive (above 0% of revenue) within the next 4 reported quarters, demonstrating that the cash burn is cyclical rather than structural.
CounterWith gross margin scored at only 2.2 out of 10 and operating margin at 3.0 out of 10, the structural margin profile suggests free cash flow improvement requires a fundamental business model shift, not just cyclical recovery.
Despite weak near-term technical conditions, analysts hold a price target consensus implying approximately 44% upside from the current $20.40 price, with an analyst rating score of 7.11 out of 10 and a price target score of 9.3 out of 10.
↓DeterioratingSentiment breakdown
- Expectation
- The stock appreciates at least 20% toward analyst targets over 12 months, reaching $24.50 or higher, as the technical downtrend stabilizes and fundamental re-rating occurs.
CounterOnly 4 analysts cover the ADR, which the model flags as dampening signal reliability, and the quality score of 3.3 falls below the minimum 4.0 threshold, meaning the business may structurally deserve a low valuation.
The short interest and days-to-cover scores are among the highest in the risk model (9.9 and 9.6 out of 10 respectively), and the Bollinger Band and support/resistance technical scores are also very high (10.0 and 9.8), indicating the stock is extremely oversold near meaningful technical support.
→StableRisk breakdown
- Expectation
- The stock holds above the current support level near $19.72 and begins recovering toward $22 or higher within 6 months as oversold technical conditions resolve.
CounterA confirmed death cross with the 200-day moving average slope declining at -2.6% per month indicates the trend is well-established, and oversold conditions can persist for extended periods in confirmed downtrends.
Sony is in a confirmed falling-knife technical pattern with a death cross in place, the stock trading below all moving averages, RSI at 34, falling on-balance volume, and a 200-day moving average declining at -2.6% per month.
↑ImprovingMomentum breakdown
- Expectation
- The moving average convergence-divergence indicator crosses above zero and the stock reclaims its 50-day moving average within 6 months, signaling early trend reversal.
CounterDeath cross patterns with confirmed downward-sloping long-term moving averages have historically required 6 to 18 months to fully resolve, and the stock may continue falling even with strong analyst targets in place.
Per-dimension breakdown
Quality
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.4 |
| ROA | 2.8 |
| Gross margin | 2.4 |
| Op margin | 6.7 |
| Net margin | 0.0 |
| Current ratio | 4.7 |
| Moat | 6.2 |
| Piotroski F | 8.9 |
- ▸Strong Piotroski F-Score: 8/9
Growth
7.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.5 |
| EPS growth | 10.0 |
Momentum
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.4 |
| MACD | 8.9 |
| OBV | 10.0 |
| MA position | 8.0 |
| Volume | 1.6 |
- ▸Overbought (RSI 73)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.3 |
| Analyst rating | 7.1 |
| Price target | 8.4 |
- ▸Light analyst coverage (4.0) — signal dampened
- ▸Analyst upside: 27%
Insider
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 5.9 |
| notable moves | 7.0 |
- ▸Modest insider selling — $28,830,726 (0.021% of mkt cap)
Peer rank
3.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.8 |
| quality rank | 1.3 |
| growth rank | 2.5 |
Technical
3.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.1 |
| support resistance | 1.3 |
| 52w position | 5.6 |
Risk (lower is worse)
8.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.9 |
| days to cover | 9.0 |
| volatility | 5.7 |
| put call | 9.8 |
| implied vol | 5.5 |
| beta | 8.4 |
| debt equity | 9.1 |
Catalyst
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 7.2 |
| dividend safety | 8.0 |
| news activity | 7.0 |
- ▸Dividend aristocrat: 0.7% yield
How the verdict was assembled
Engine trigger
Mixed signals. Hold existing position. | News modifier -1 (HOLD_IF_HOLDING → SELL_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_F_HOLD_DEFAULT|L3:NEWS_MOD=-1Passed (6)
- MOMENTUM:6.6>=5.5
- INSIDER:OK
- 8K:CLEAN
- EARNINGS_PROXIMITY:85d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.7<1.5@spot
Warning (1)
- DEATH_CROSS:momentum=6.6>=5.0 recovering
Reward-to-Risk
0.66
Upside
+8.3%
Downside
12.6%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 73
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The default F-path HOLD fired without any positive-conviction gate triggering — no momentum acceleration, no quality+value crossover, no setup recognition. Highest-clear gate: MOMENTUM:6.6>=5.5. Top dim: Risk (lower is worse) at 8.2; weakest: Technical at 3.0. The engine's read is one of pattern absence — no directional conviction in either direction at current asymmetry.
The strongest dimensions are Risk (lower is worse) at 8.2, Growth at 7.2, and Value at 7.0; the weakest are Technical at 3.0, Peer rank at 3.2, and Quality at 4.5. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 0.66 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Analyst Consensus Large Upside
Trip ifAnalyst consensus price target falls below $18.00, more than 11% below current price, indicating broad downward revisions that invalidate the upside thesis.
- P2Low Short Interest Technical Support
Trip ifPrice drops below $18.50, more than 9% below the current $20.40, confirming that technical support has failed and the oversold bounce thesis is invalid.
- P3Fcf Negative Quality Concern
Trip ifFree cash flow remains negative for more than 3 consecutive quarters, confirming structural rather than cyclical cash burn.
- P4Momentum Death Cross Headwind
Trip if200-day moving average slope declines by more than 4% per month for 2 consecutive months, indicating the downtrend is accelerating rather than stabilizing.