Value
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 1.0 |
| P/S | 6.5 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 2.7 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 40.6x
- ▸PEG: 0.42
VSEC · Why this verdict
Why VSE (VSEC) 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 score5.8/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
VSE Corporation has beaten earnings estimates in all 4 of the last 4 quarters with an average positive surprise of 29.3%, including a 38.24% beat in Q2 2025 and a 31.41% beat in the most recent quarter — consistently delivering roughly one-third more earnings than consensus expectations. Catalyst breakdown | Earnings per share should continue to beat consensus estimates in at least 3 of the next 4 quarters, with the positive surprise percentage remaining above 15% on average. | →Stable |
| CounterA 29.3% average beat suggests systematic under-modeling by analysts rather than genuine outperformance; when consensus models are reset to reflect actual performance, the beat magnitude will narrow and could reverse. | ||
Revenue is growing at 27% year-over-year with a growth score of 9.6/10, placing VSE in the top tier of aerospace and defense services companies, supported by U.S. defense spending tailwinds and MRO (maintenance, repair, and overhaul) demand. Growth breakdown | Revenue growth should remain above 15% annually over the next 12 months, and the PEG ratio of 0.35 should compress toward 0.5 as earnings catch up with growth. | →Stable |
| CounterFree cash flow is only 222% of net income due to elevated working capital investment in a growth phase, and the low gross margin implies VSE is a services business with thin pricing power rather than a technology-enabled defense company. | ||
The stock is in a breakout pattern with a golden cross confirmed, trading above all moving averages with RSI at 65, bullish MACD, and rising OBV — all three momentum signals aligned positively at the same time. Chart pattern detection | The stock should remain above its 200-day moving average and sustain a price above $190 over the next 3 months, confirming the breakout is real rather than a false signal. | →Stable |
| CounterThe Bollinger band score of 0.0/10 indicates the stock is near or at the upper Bollinger band, which historically precedes a mean-reversion pullback rather than continued acceleration in a breakout. | ||
The put/call ratio of 1.70 combined with 88% implied volatility signals elevated options market uncertainty despite the positive momentum and earnings trajectory, suggesting sophisticated investors are hedging against downside even as the breakout pattern appears bullish. Key risks | The put/call ratio should decline below 1.20 within 6 months as earnings beats continue and options market uncertainty resolves in favor of the fundamental thesis. | →Stable |
| CounterAn elevated put/call ratio in a defense services stock undergoing a momentum breakout may reflect smart money hedging the run-up rather than directional bearishness, and options market activity alone is insufficient to invalidate strong fundamental momentum. | ||
VSE Corporation has beaten earnings estimates in all 4 of the last 4 quarters with an average positive surprise of 29.3%, including a 38.24% beat in Q2 2025 and a 31.41% beat in the most recent quarter — consistently delivering roughly one-third more earnings than consensus expectations.
→StableCatalyst breakdown
- Expectation
- Earnings per share should continue to beat consensus estimates in at least 3 of the next 4 quarters, with the positive surprise percentage remaining above 15% on average.
CounterA 29.3% average beat suggests systematic under-modeling by analysts rather than genuine outperformance; when consensus models are reset to reflect actual performance, the beat magnitude will narrow and could reverse.
Revenue is growing at 27% year-over-year with a growth score of 9.6/10, placing VSE in the top tier of aerospace and defense services companies, supported by U.S. defense spending tailwinds and MRO (maintenance, repair, and overhaul) demand.
→StableGrowth breakdown
- Expectation
- Revenue growth should remain above 15% annually over the next 12 months, and the PEG ratio of 0.35 should compress toward 0.5 as earnings catch up with growth.
CounterFree cash flow is only 222% of net income due to elevated working capital investment in a growth phase, and the low gross margin implies VSE is a services business with thin pricing power rather than a technology-enabled defense company.
The stock is in a breakout pattern with a golden cross confirmed, trading above all moving averages with RSI at 65, bullish MACD, and rising OBV — all three momentum signals aligned positively at the same time.
→StableChart pattern detection
- Expectation
- The stock should remain above its 200-day moving average and sustain a price above $190 over the next 3 months, confirming the breakout is real rather than a false signal.
CounterThe Bollinger band score of 0.0/10 indicates the stock is near or at the upper Bollinger band, which historically precedes a mean-reversion pullback rather than continued acceleration in a breakout.
The put/call ratio of 1.70 combined with 88% implied volatility signals elevated options market uncertainty despite the positive momentum and earnings trajectory, suggesting sophisticated investors are hedging against downside even as the breakout pattern appears bullish.
→StableKey risks
- Expectation
- The put/call ratio should decline below 1.20 within 6 months as earnings beats continue and options market uncertainty resolves in favor of the fundamental thesis.
CounterAn elevated put/call ratio in a defense services stock undergoing a momentum breakout may reflect smart money hedging the run-up rather than directional bearishness, and options market activity alone is insufficient to invalidate strong fundamental momentum.
TrendMatrix Research · core thesis
Engine thesis — one sentence
VSE Corporation is an aerospace and defense services company with a perfect 4-quarter earnings beat streak averaging 29.3% positive surprise, 27% revenue growth, and a breakout technical pattern with a golden cross — but the stock has only 10.8% upside to analyst targets and below-threshold near-term asymmetry, making it a hold rather than a new buy at current levels.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.3 |
| ROA | 2.3 |
| Gross margin | 0.0 |
| Op margin | 4.6 |
| Net margin | 2.1 |
| Current ratio | 5.0 |
| FCF quality | 10.0 |
| Moat | 6.4 |
| Piotroski F | 7.8 |
- ▸Excellent cash conversion: 222% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
9.6/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 9.2 |
| EPS growth | 10.0 |
- ▸Strong growth: 27% YoY
Momentum
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.8 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 2.9 |
- ▸Overbought (RSI 84)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 8.0 |
| Price target | 6.5 |
| erm sentiment | 5.6 |
- ▸Light analyst coverage (9.0) — signal dampened
Insider
5.1/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.2 |
- ▸Insider selling (low materiality) — $1,279,330 (0.020% of mkt cap)
Peer rank
3.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.9 |
| quality rank | 3.3 |
| growth rank | 7.4 |
Technical
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.6 |
| support resistance | 0.8 |
| 52w position | 9.5 |
| gap | 5.0 |
Risk (lower is worse)
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.8 |
| days to cover | 5.4 |
| volatility | 0.9 |
| put call | 0.0 |
| implied vol | 3.5 |
| beta | 6.2 |
| debt equity | 9.4 |
- ▸Elevated put/call: 3.83
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 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 17.0%
How the verdict was assembled
Engine trigger
Mixed signals. Hold existing position.
Engine technical detail
verdict_path:
L4:PATH_F_HOLD_DEFAULTPassed (7)
- MOMENTUM:7.1>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:26d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.3=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.28
Upside
-4.3%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeCatalyst-Driven — Earnings in 26d with 4/4 beat streak
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:7.1>=5.5. Top dim: Growth at 9.6; weakest: Peer rank at 3.4. The engine's read is one of pattern absence — no directional conviction in either direction at current asymmetry.
The strongest dimensions are Growth at 9.6, Momentum at 7.1, and Catalyst at 7.0; the weakest are Peer rank at 3.4, Technical at 4.2, and Value at 4.3. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -0.28 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Consistent Large Earnings Beats
Trip ifEPS surprise falls below 0% in at least 3 of the next 4 quarters.
- P2Strong Revenue Growth 27pct
Trip ifRevenue growth falls below 10% year-over-year for 2 consecutive quarters, more than 17 percentage points below the current 27% growth rate.
- P3Golden Cross Breakout Momentum
Trip ifStock price falls below $180, more than 9% below the current $198.55, closing below the 200-day moving average and invalidating the breakout.
- P4Elevated Put Call Caution
Trip ifPut/call ratio rises above 2.5 and implied volatility rises above 120%, indicating the options market is pricing a materially higher probability of near-term downside.