Value
7.5/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 8.5 |
| P/S | 9.3 |
| EV/EBITDA | 7.5 |
| Fwd P/E | 3.8 |
| PEG | 10.0 |
- ▸Forward P/E: 30.9x
- ▸PEG: 0.06
- ▸Attractively valued
WEYS · Why this verdict
Why Weyco Group (WEYS) 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 score5.5/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Weyco Group screens as statistically cheap with a strong balance sheet, but an explicit cyclical-trap warning, an expected ~60% earnings decline, three consecutive misses, and negative momentum point to a peak-earnings setup that outweighs the headline valuation.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The V8 warning explicitly flags Weyco Group as a cyclical trap — forward P/E of 30.9x is more than 2.5x the trailing P/E of roughly 12x, consistent with earnings at a cyclical peak about to decline. Warnings | Forward P/E should compress back toward trailing P/E (within 1.5x) over the next 12 months, either through earnings stabilizing or price declining to match. | ↑Improving |
| CounterThe bull case separately flags an attractive valuation, and a PEG of 0.06 suggests the market may not be fully pricing in the cyclical earnings risk, leaving room for the stock to hold up if the decline is milder than the ~60% estimate implies. | ||
The bear case states earnings are expected to decline approximately 60% from a cyclical peak, alongside three consecutive earnings misses. Bear case | Reported EPS should decline by no more than 40% YoY over the next four quarters for the cyclical-decline thesis to be less severe than currently expected. | ↑Improving |
| CounterA strong Piotroski F-Score of 9/9 indicates the underlying balance sheet and operating trends remain fundamentally healthy despite the expected cyclical earnings pullback. | ||
Weyco Group posts a near-perfect Piotroski F-Score of 9/9 and is noted for conservative debt levels relative to peers, indicating fundamental balance-sheet resilience even amid cyclical earnings pressure. Quality breakdown | The Piotroski F-Score should stay at 8/9 or higher over the next 12 months. | →Stable |
| CounterA strong Piotroski score reflects trailing financial statement trends and may lag a forward-looking cyclical earnings decline that hasn't yet shown up in the balance sheet. | ||
The stock has failed the platform's momentum gate (3.3 vs 4.5 threshold) and is technically overbought (RSI 73) with falling on-balance volume, a combination flagged among the key risks as negative price momentum. Key risks | On-balance volume should turn positive and the momentum score should rise above 4.5 over the next 1-2 quarters. | ↑Improving |
| CounterAn overbought reading with a still-above-200-day-MA price position doesn't necessarily confirm a bearish reversal, especially for a historically stable dividend-paying name. | ||
The V8 warning explicitly flags Weyco Group as a cyclical trap — forward P/E of 30.9x is more than 2.5x the trailing P/E of roughly 12x, consistent with earnings at a cyclical peak about to decline.
↑ImprovingWarnings
- Expectation
- Forward P/E should compress back toward trailing P/E (within 1.5x) over the next 12 months, either through earnings stabilizing or price declining to match.
CounterThe bull case separately flags an attractive valuation, and a PEG of 0.06 suggests the market may not be fully pricing in the cyclical earnings risk, leaving room for the stock to hold up if the decline is milder than the ~60% estimate implies.
The bear case states earnings are expected to decline approximately 60% from a cyclical peak, alongside three consecutive earnings misses.
↑ImprovingBear case
- Expectation
- Reported EPS should decline by no more than 40% YoY over the next four quarters for the cyclical-decline thesis to be less severe than currently expected.
CounterA strong Piotroski F-Score of 9/9 indicates the underlying balance sheet and operating trends remain fundamentally healthy despite the expected cyclical earnings pullback.
Weyco Group posts a near-perfect Piotroski F-Score of 9/9 and is noted for conservative debt levels relative to peers, indicating fundamental balance-sheet resilience even amid cyclical earnings pressure.
→StableQuality breakdown
- Expectation
- The Piotroski F-Score should stay at 8/9 or higher over the next 12 months.
CounterA strong Piotroski score reflects trailing financial statement trends and may lag a forward-looking cyclical earnings decline that hasn't yet shown up in the balance sheet.
The stock has failed the platform's momentum gate (3.3 vs 4.5 threshold) and is technically overbought (RSI 73) with falling on-balance volume, a combination flagged among the key risks as negative price momentum.
↑ImprovingKey risks
- Expectation
- On-balance volume should turn positive and the momentum score should rise above 4.5 over the next 1-2 quarters.
CounterAn overbought reading with a still-above-200-day-MA price position doesn't necessarily confirm a bearish reversal, especially for a historically stable dividend-paying name.
Per-dimension breakdown
Quality
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.6 |
| ROA | 5.8 |
| Gross margin | 5.8 |
| Op margin | 10.0 |
| Net margin | 6.2 |
| Current ratio | 5.5 |
| FCF quality | 7.7 |
| Moat | 7.0 |
| Piotroski F | 10.0 |
- ▸Strong Piotroski F-Score: 9/9
Growth
4.2/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 4.2 |
Momentum
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 8.2 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 6.0 |
| Volume | 2.4 |
- ▸Uptrend pullback (RSI 33) - buy opportunity
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
5.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| erm sentiment | 5.0 |
Insider
3.8/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 5.0 |
- ▸Modest insider selling — $423,687 (0.099% of mkt cap)
Peer rank
5.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.6 |
| quality rank | 3.1 |
| growth rank | 5.0 |
- ▸Conservative debt levels
Technical
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.0 |
| support resistance | 5.4 |
| 52w position | 8.3 |
Risk (lower is worse)
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.0 |
| days to cover | 4.9 |
| volatility | 4.7 |
| beta | 7.9 |
| debt equity | 9.9 |
Catalyst
3.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| dividend safety | 6.8 |
- ▸Earnings concerns: 1B/3M
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:63d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- MOMENTUM:3.5<4.5
Warning (2)
- ASYMMETRY:UPSIDE_EXHAUSTED (upside=0.0%)
- 8K_FLAG:1.02
Reward-to-Risk
0.00
Upside
+0.0%
Downside
8.1%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeInst Constrain — Small cap ($0.4B) below institutional reach
SuitabilityAggressive — MCap $0.4B<$5B
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 7.5) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:3.5<4.5) reinforce the read. Current asymmetry R:R is 0.00 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 7.5, Risk (lower is worse) at 7.3, and Technical at 7.2; the weakest are Catalyst at 3.4, Momentum at 3.5, and Insider at 3.8. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of 0.00 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Cyclical Earnings Trap Warning
Trip ifForward-to-trailing P/E multiple gap compresses below 1.5x, down from the current 2.5x.
- P2Expected Earnings Decline
Trip ifReported EPS declines by more than 70% YoY over the next four quarters, exceeding the currently expected ~60% decline.
- P3Strong Fundamental Quality Score
Trip ifPiotroski F-Score falls below 6/9, down from the current 9/9.
- P4Negative Momentum And Overbought Technicals
Trip ifOn-balance volume continues falling for more than 60 additional trading days while the momentum score stays below 4.5.