Value
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 7.5 |
| P/S | 9.9 |
| EV/EBITDA | 5.9 |
| Fwd P/E | 7.8 |
| PEG | 10.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 15.6x
- ▸PEG: 0.01
- ▸Attractively valued
SPB · Why this verdict
Why Spectrum Brands Holdings (SPB) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.6/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company generates 176% of net income in free cash flow, indicating strong cash conversion far above reported earnings, and the Piotroski financial strength score of 9 out of 9 confirms broad balance sheet and profitability health across all nine fundamental criteria. Quality breakdown | Free cash flow remains above 120% of net income over the next 4 reported quarters, confirming that cash generation quality is structural rather than a one-period benefit. | →Stable |
| CounterDespite strong Piotroski and cash metrics, the return on equity of only 2.2 out of 10 in the component scores and gross margin of 3.3 out of 10 indicate that absolute profitability levels remain modest for a consumer staples operator. | ||
Spectrum Brands has beaten analyst estimates in 3 of the last 4 quarters with an extraordinary average earnings surprise of 72%, including a 186% beat in November 2025 and an 85% beat in February 2026, indicating management's ability to consistently outperform expectations. Earnings | Earnings beats continue in at least 3 of the next 4 quarters with average surprise exceeding 20%, sustaining investor confidence in management execution. | →Stable |
| CounterThe average is inflated by extreme one-period beats; the most recent quarter's 17.5% surprise, while positive, suggests the scale of outperformance is already moderating toward more normal levels. | ||
Home Depot, Lowe's, and Walmart together account for roughly 64% of the Home and Garden segment's revenues, creating significant customer concentration risk that could materially impact results if any of these retailers reduce orders or shift sourcing. Bear case | Revenue from the Home and Garden segment grows at least 3% year-over-year in the next two reported annual periods, demonstrating that the major retail relationships are stable and growing. | →Stable |
| CounterHigh customer concentration in the home improvement retail channel may actually be a competitive moat — these large retailers are unlikely to quickly switch suppliers given shared supply-chain integration and brand recognition. | ||
The stock has already exceeded its analyst price target (with the bull case noting -10% upside remaining) and carries a 19% short interest, indicating that professional investors believe the near-term price appreciation opportunity has been largely captured. Key risks | Short interest falls below 12% within 6 months and the stock consolidates near current levels before setting up for a new leg higher once analysts revise targets upward following continued earnings beats. | →Stable |
| CounterA stock that has surpassed analyst targets with 19% short interest and a negative asymmetry ratio of -0.67 is mathematically unfavorable for new entry; the risk-reward of downside 15% versus upside -10% does not favor adding exposure. | ||
The company generates 176% of net income in free cash flow, indicating strong cash conversion far above reported earnings, and the Piotroski financial strength score of 9 out of 9 confirms broad balance sheet and profitability health across all nine fundamental criteria.
→StableQuality breakdown
- Expectation
- Free cash flow remains above 120% of net income over the next 4 reported quarters, confirming that cash generation quality is structural rather than a one-period benefit.
CounterDespite strong Piotroski and cash metrics, the return on equity of only 2.2 out of 10 in the component scores and gross margin of 3.3 out of 10 indicate that absolute profitability levels remain modest for a consumer staples operator.
Spectrum Brands has beaten analyst estimates in 3 of the last 4 quarters with an extraordinary average earnings surprise of 72%, including a 186% beat in November 2025 and an 85% beat in February 2026, indicating management's ability to consistently outperform expectations.
→StableEarnings
- Expectation
- Earnings beats continue in at least 3 of the next 4 quarters with average surprise exceeding 20%, sustaining investor confidence in management execution.
CounterThe average is inflated by extreme one-period beats; the most recent quarter's 17.5% surprise, while positive, suggests the scale of outperformance is already moderating toward more normal levels.
Home Depot, Lowe's, and Walmart together account for roughly 64% of the Home and Garden segment's revenues, creating significant customer concentration risk that could materially impact results if any of these retailers reduce orders or shift sourcing.
→StableBear case
- Expectation
- Revenue from the Home and Garden segment grows at least 3% year-over-year in the next two reported annual periods, demonstrating that the major retail relationships are stable and growing.
CounterHigh customer concentration in the home improvement retail channel may actually be a competitive moat — these large retailers are unlikely to quickly switch suppliers given shared supply-chain integration and brand recognition.
The stock has already exceeded its analyst price target (with the bull case noting -10% upside remaining) and carries a 19% short interest, indicating that professional investors believe the near-term price appreciation opportunity has been largely captured.
→StableKey risks
- Expectation
- Short interest falls below 12% within 6 months and the stock consolidates near current levels before setting up for a new leg higher once analysts revise targets upward following continued earnings beats.
CounterA stock that has surpassed analyst targets with 19% short interest and a negative asymmetry ratio of -0.67 is mathematically unfavorable for new entry; the risk-reward of downside 15% versus upside -10% does not favor adding exposure.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Spectrum Brands has beaten analyst earnings estimates in 3 of the last 4 quarters with an exceptional average surprise of 72%, free cash flow equal to 176% of net income, and a perfect Piotroski financial strength score of 9 out of 9, but the stock has already surpassed its analyst price target and carries 19% short interest.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.2 |
| ROA | 1.9 |
| Gross margin | 3.3 |
| Op margin | 2.9 |
| Net margin | 2.2 |
| Current ratio | 7.9 |
| FCF quality | 10.0 |
| Moat | 5.2 |
| Piotroski F | 10.0 |
- ▸Excellent cash conversion: 176% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 9/9
Growth
3.7/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 3.7 |
Momentum
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 7.9 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 5.9 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.7 |
| Price target | 5.4 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (7.0) — signal dampened
Insider
5.2/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.5 |
| holder change | 5.0 |
- ▸Insider buying (low materiality) — $182,125 (0.009% of mkt cap)
Peer rank
6.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.4 |
| quality rank | 4.7 |
| growth rank | 7.6 |
- ▸Attractive P/E vs peers
Technical
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.6 |
| support resistance | 3.9 |
| 52w position | 9.3 |
Risk (lower is worse)
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 0.3 |
| days to cover | 1.4 |
| volatility | 4.8 |
| put call | 7.2 |
| implied vol | 4.2 |
| beta | 9.1 |
| debt equity | 8.5 |
- ▸High short interest: 19%
- ▸Concentration risks: 2 HIGH, 2 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 5.2 |
- ▸Strong earnings: 3B/0M
- ▸Dividend: 221.0%
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (7)
- MOMENTUM:5.9>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:34d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.7=NEGATIVE
Warning (0)
none
Reward-to-Risk
-1.72
Upside
-10.6%
Downside
6.2%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 53, MACD bullish
EdgeInst Constrain — Small cap ($2.0B) below institutional reach
SuitabilityAggressive — MCap $2.0B<$5B
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:5.9>=5.5. Top dim: Value at 7.3; weakest: Growth at 3.7. No conviction either direction.
The strongest dimensions are Value at 7.3, Catalyst at 7.0, and Peer rank at 6.2; the weakest are Growth at 3.7, Risk (lower is worse) at 5.1, and Quality at 5.1. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -1.72 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Outstanding Earnings Beat History
Trip ifEarnings surprise falls below 0% in at least 2 of the next 4 quarters, ending the pattern of consistent outperformance.
- P2High Cash Conversion Piotroski
Trip ifFree cash flow falls below 80% of net income for 2 consecutive quarters, indicating the cash conversion advantage is deteriorating.
- P3Customer Concentration Risk
Trip ifAny of the top 3 customers (Home Depot, Lowe's, or Walmart) reduces purchasing commitments by more than 15% year-over-year based on disclosed segment data.
- P4Target Reached High Short Interest
Trip ifShort interest rises above 25%, more than 6 percentage points above the current 19%, signaling increasing professional skepticism about the stock at current price levels.