Value
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.8 |
| P/S | 6.9 |
| EV/EBITDA | 2.7 |
| Fwd P/E | 8.4 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 13.8x
- ▸PEG: 0.06
WT · Why this verdict
Why WisdomTree (WT) 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 score6.1/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
With 19% of shares sold short, a significant portion of the market is betting against WisdomTree, creating ongoing selling pressure and indicating meaningful bearish conviction despite the strong growth profile. Key risks | Short interest declines below 12% as the growth narrative becomes more widely accepted and short sellers cover their positions. | →Stable |
| CounterHigh short interest in a fast-growing small-cap with strong fundamentals is a classic setup for a short squeeze if earnings momentum continues, potentially accelerating price gains. | ||
Concentration of counterparty relationships in HSBC, JP Morgan, and BNY Mellon creates systemic risk — any single relationship failure or pricing renegotiation could significantly impact revenue or operations. Bear case | No material revenue impact from counterparty relationship changes is reported, and the company maintains diversified counterparty arrangements over the next 12 months. | →Stable |
| CounterMajor financial institutions like HSBC, JP Morgan, and BNY Mellon are highly stable counterparties, making disruption risk remote under normal market conditions. | ||
WisdomTree's 48% year-over-year earnings growth and a PEG ratio of only 0.06 indicate the market is significantly underpricing the growth trajectory relative to the current forward price-to-earnings of 14.0x. Growth breakdown | Earnings growth remains above 25% annually and revenue growth stays above 15% over the next 12 months. | →Stable |
| CounterAsset manager earnings are highly cyclical and closely tied to market performance; a market correction or outflows from ETF products could rapidly deflate the apparent growth rate. | ||
Free cash flow relative to net income stands at 209%, indicating that reported earnings understate true cash generation — a hallmark of high-quality, capital-light business models. Quality breakdown | Free cash flow conversion remains above 150% of net income over the next 12 months, confirming the structural cash-generative quality of the business. | →Stable |
| Counter209% free cash flow conversion may partially reflect timing differences or working capital releases rather than sustainable structural cash superiority. | ||
With 19% of shares sold short, a significant portion of the market is betting against WisdomTree, creating ongoing selling pressure and indicating meaningful bearish conviction despite the strong growth profile.
→StableKey risks
- Expectation
- Short interest declines below 12% as the growth narrative becomes more widely accepted and short sellers cover their positions.
CounterHigh short interest in a fast-growing small-cap with strong fundamentals is a classic setup for a short squeeze if earnings momentum continues, potentially accelerating price gains.
Concentration of counterparty relationships in HSBC, JP Morgan, and BNY Mellon creates systemic risk — any single relationship failure or pricing renegotiation could significantly impact revenue or operations.
→StableBear case
- Expectation
- No material revenue impact from counterparty relationship changes is reported, and the company maintains diversified counterparty arrangements over the next 12 months.
CounterMajor financial institutions like HSBC, JP Morgan, and BNY Mellon are highly stable counterparties, making disruption risk remote under normal market conditions.
WisdomTree's 48% year-over-year earnings growth and a PEG ratio of only 0.06 indicate the market is significantly underpricing the growth trajectory relative to the current forward price-to-earnings of 14.0x.
→StableGrowth breakdown
- Expectation
- Earnings growth remains above 25% annually and revenue growth stays above 15% over the next 12 months.
CounterAsset manager earnings are highly cyclical and closely tied to market performance; a market correction or outflows from ETF products could rapidly deflate the apparent growth rate.
Free cash flow relative to net income stands at 209%, indicating that reported earnings understate true cash generation — a hallmark of high-quality, capital-light business models.
→StableQuality breakdown
- Expectation
- Free cash flow conversion remains above 150% of net income over the next 12 months, confirming the structural cash-generative quality of the business.
Counter209% free cash flow conversion may partially reflect timing differences or working capital releases rather than sustainable structural cash superiority.
TrendMatrix Research · core thesis
Engine thesis — one sentence
WisdomTree is a fast-growing asset manager posting 48% year-over-year earnings growth with excellent free cash flow conversion of 209% relative to net income, a Piotroski F-Score of 8/9, and a PEG ratio of 0.06 — significantly discounted relative to its growth rate — though high short interest of 19% and counterparty concentration risks present meaningful headwinds.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.6 |
| ROA | 6.1 |
| Gross margin | 6.3 |
| Op margin | 10.0 |
| Net margin | 5.6 |
| Current ratio | 8.4 |
| FCF quality | 10.0 |
| Moat | 6.9 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 209% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
10.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 10.0 |
- ▸Strong growth: 48% YoY
Momentum
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 3.1 |
| OBV | 1.0 |
| MA position | 7.0 |
| Volume | 1.3 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.7 |
| Price target | 7.0 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (7.0) — signal dampened
Insider
3.4/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 2.0 |
| holder change | 5.1 |
- ▸Notable insider selling — $2,771,600 (0.100% of mkt cap)
Peer rank
4.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.7 |
| quality rank | 4.4 |
| growth rank | 9.4 |
- ▸Industry growth leader
Technical
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.1 |
| support resistance | 3.8 |
| 52w position | 8.2 |
| gap | 5.0 |
Risk (lower is worse)
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 0.9 |
| days to cover | 4.9 |
| volatility | 2.0 |
| put call | 10.0 |
| implied vol | 3.6 |
| beta | 6.3 |
| debt equity | 2.5 |
- ▸High short interest: 18%
- ▸Concentration risks: 2 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 8.1 |
| dividend safety | 5.2 |
- ▸Strong earnings: 3B/0M
- ▸Dividend: 67.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:27d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:3.6<4.5
- ASYMMETRY:-0.0=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.04
Upside
-0.4%
Downside
10.1%
Sizing output
AVOID
SetupRange Bound — RSI 58 mid-range, Bollinger mid-band
EdgeCatalyst-Driven — Earnings in 27d with 3/4 beat streak
SuitabilityAggressive — MCap $2.8B<$5B
Investment implication
The F-path SELL output reflects an overall score of 4.6 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Growth at 10.0) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:3.6<4.5, ASYMMETRY:-0.0=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.04 — supplementary context, not the trigger for this path.
The strongest dimensions are Growth at 10.0, Quality at 7.4, and Catalyst at 6.7; the weakest are Insider at 3.4, Momentum at 3.6, and Risk (lower is worse) at 4.3. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -0.04 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Exceptional Growth Low Peg
Trip ifEarnings growth falls below 10% year-over-year, declining more than 38 percentage points from the current 48%.
- P2Superior Cash Conversion
Trip ifFree cash flow conversion falls below 100% of net income, dropping more than 109 percentage points from the current 209%.
- P3High Short Interest Overhang
Trip ifShort interest rises above 25%, exceeding the current 19% level by more than 6 percentage points.
- P4Counterparty Concentration Exposure
Trip ifPrice drops below $17.04, reaching the stop-loss level and falling more than 7% below the current $18.32.