Value
8.6/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 9.2 |
| P/S | 10.0 |
| Fwd P/E | 9.5 |
| PEG | 5.5 |
| Analyst target | 9.0 |
- ▸Forward P/E: 8.4x
- ▸PEG: 1.37
- ▸Attractively valued
TGS · Why this verdict
Why Transportadora de Gas del Sur S (TGS) 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 score6.1/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Transportadora de Gas del Sur offers high quality (9/9 Piotroski, wide moat, 27% margins) at a forward P/E of 8.6x with 50.7% upside to the analyst target, but three straight earnings misses, negative cash conversion and a confirmed downtrend weigh on it.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
TGS shows a wide economic moat, margins of 27% and a Piotroski F-Score of 9/9, giving it a quality score of 7.2. Quality breakdown | Margins should stay above 20% and the Piotroski score at 7 or higher over the next 12 months. | ↓Deteriorating |
| CounterEarnings quality is a red flag at -14% FCF/NI, so reported margins are not converting to free cash flow. | ||
A forward P/E of 8.6x and a PEG of 0.91 make the stock attractively valued, with the $35.67 analyst target 50.7% above the $23.67 price. Valuation breakdown | Price should move toward $35.67 if earnings stabilize. | ↓Deteriorating |
| CounterAnalyst coverage is light, and the price has been falling toward the $21.09 stop level. | ||
EPS missed estimates three times in a row, including $0.48 versus $0.65 expected on 2026-10-29, a 26.7% miss. Bear case | EPS should return to meeting or beating estimates within the next two reports. | ↑Improving |
| CounterEstimates are trending up, which makes it harder to beat, and misses of 20% or more suggest cost or currency pressure. | ||
Momentum is 3.1/10 with RSI at 29, a death cross and price below a 200-day average falling 2.4% over 30 days, with a volume surge of 3.0x on the selloff. Momentum breakdown | RSI should recover above 40 and price should hold above the $21.09 stop. | ↓Deteriorating |
| CounterThe downtrend is confirmed with falling on-balance volume, so oversold readings can persist as the price keeps falling. | ||
Revenue is growing 25% YoY, but free cash flow is negative at -14% of net income, so growth is not yet funding itself. Growth breakdown | FCF/net income should turn positive and rise above 50%. | ↓Deteriorating |
| CounterHeavy infrastructure spending can depress free cash flow for years in a gas pipeline business. | ||
TGS shows a wide economic moat, margins of 27% and a Piotroski F-Score of 9/9, giving it a quality score of 7.2.
↓DeterioratingQuality breakdown
- Expectation
- Margins should stay above 20% and the Piotroski score at 7 or higher over the next 12 months.
CounterEarnings quality is a red flag at -14% FCF/NI, so reported margins are not converting to free cash flow.
A forward P/E of 8.6x and a PEG of 0.91 make the stock attractively valued, with the $35.67 analyst target 50.7% above the $23.67 price.
↓DeterioratingValuation breakdown
- Expectation
- Price should move toward $35.67 if earnings stabilize.
CounterAnalyst coverage is light, and the price has been falling toward the $21.09 stop level.
EPS missed estimates three times in a row, including $0.48 versus $0.65 expected on 2026-10-29, a 26.7% miss.
↑ImprovingBear case
- Expectation
- EPS should return to meeting or beating estimates within the next two reports.
CounterEstimates are trending up, which makes it harder to beat, and misses of 20% or more suggest cost or currency pressure.
Momentum is 3.1/10 with RSI at 29, a death cross and price below a 200-day average falling 2.4% over 30 days, with a volume surge of 3.0x on the selloff.
↓DeterioratingMomentum breakdown
- Expectation
- RSI should recover above 40 and price should hold above the $21.09 stop.
CounterThe downtrend is confirmed with falling on-balance volume, so oversold readings can persist as the price keeps falling.
Revenue is growing 25% YoY, but free cash flow is negative at -14% of net income, so growth is not yet funding itself.
↓DeterioratingGrowth breakdown
- Expectation
- FCF/net income should turn positive and rise above 50%.
CounterHeavy infrastructure spending can depress free cash flow for years in a gas pipeline business.
Per-dimension breakdown
Quality
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.6 |
| ROA | 6.1 |
| Gross margin | 6.8 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 9.9 |
| FCF quality | 0.0 |
| Moat | 7.6 |
| Piotroski F | 10.0 |
- ▸Strong margins: 27%
- ▸Earnings quality RED FLAG: -14% FCF/NI
- ▸Wide economic moat
- ▸Compounder quality: strong returns + growth
Growth
5.9/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 8.7 |
| EPS growth | 3.2 |
- ▸Strong growth: 25% YoY
Momentum
2.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 1.0 |
| Volume | 7.9 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -2.4%/30d — confirmed downtrend
Sentiment
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.8 |
| Price target | 9.9 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (8.0) — signal dampened
- ▸Analyst upside: 72%
Insider
5.0/10data confidence 50%Peer rank
4.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.9 |
| quality rank | 5.1 |
| growth rank | 1.2 |
- ▸Best-in-class margins
Technical
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 9.3 |
| support resistance | 7.0 |
| 52w position | 3.1 |
| gap | 6.0 |
Risk (lower is worse)
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.6 |
| days to cover | 10.0 |
| volatility | 0.9 |
| put call | 10.0 |
| implied vol | 5.3 |
| debt equity | 8.1 |
Catalyst
2.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
- ▸Earnings concerns: 1B/3M
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more. | News modifier -1 (HOLD_IF_HOLDING → SELL_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_F_HOLD|L3:NEWS_MOD=-1Passed (7)
- ASYMMETRY:5.4>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:114d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:2.7<4.5
- DEATH_CROSS:HARD_BLOCK
Warning (0)
none
Reward-to-Risk
5.36
Upside
+49.8%
Downside
9.3%
Sizing output
AVOID
SetupFalling Knife — Death cross, below all MAs, RSI 35, MACD bearish
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $3.4B<$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: ASYMMETRY:5.4>=1.5. Top dim: Value at 8.6; weakest: Catalyst at 2.5. No conviction either direction.
The strongest dimensions are Value at 8.6, Sentiment at 7.3, and Risk (lower is worse) at 7.3; the weakest are Catalyst at 2.5, Momentum at 2.7, and Peer rank at 4.9. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of 5.36 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1High Quality Wide Moat
Trip ifNet margin falls below 15% from the current 27%.
- P2Cheap Valuation Large Upside
Trip ifThe analyst target is cut below $28 from the current $35.67.
- P3Consecutive Earnings Misses
Trip ifEPS surprise stays below 0% for 2 more consecutive quarters.
- P4Confirmed Downtrend Oversold
Trip ifPrice drops to below the $21.09 stop level.
- P5Revenue Growth With Fcf Warning
Trip ifFCF/net income stays below 0% for 4 more quarters.