Value
3.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.5 |
| P/S | 6.0 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 2.8 |
| PEG | 3.9 |
| Analyst target | 4.0 |
- ▸Forward P/E: 38.8x
- ▸PEG: 2.67
WWD · Why this verdict
Why Woodward (WWD) 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 score5.3/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Woodward's return on equity and operating margins are classified as best-in-class versus peers, and the Piotroski F-Score of 8 out of 9 confirms broad-based financial health across profitability, leverage, and efficiency metrics. Peer-rank breakdown | Return on equity and operating margins remain above peer medians and the Piotroski F-Score stays at 7 or above over the next 12 months. | →Stable |
| CounterAerospace component suppliers face cyclical demand from commercial aviation which can compress margins significantly during downturns, making best-in-class metrics vulnerable to demand cycle turns. | ||
Woodward has beaten analyst earnings estimates in each of the last four quarters with an average surprise of 14.4%, including a 31.2% beat and an 8.6% beat in the two most recent quarters, demonstrating durable above-consensus execution. Earnings | The beat streak continues for at least 3 of the next 4 quarters with average surprise remaining above 8%. | →Stable |
| CounterSingle-source supply dependencies flagged as a high concentration risk could cause production disruptions that interrupt the beat streak if a key supplier fails. | ||
Revenue growth of 23% year-over-year and earnings growth classified as strong place Woodward among the faster-growing companies in its peer group within the aerospace and defense supply chain. Growth breakdown | Revenue growth stays above 12% annually over the next 12 months as aerospace cycle tailwinds continue. | →Stable |
| Counter23% revenue growth in aerospace components is likely partly cyclical recovery from post-pandemic supply chain disruption; the underlying secular growth rate is materially lower. | ||
At a forward price-to-earnings of 37.4x with a PEG ratio of 2.55 and the stock within 1.1% of its 52-week high, the valuation prices in a high level of execution certainty and leaves minimal room for any operational disappointment. Valuation breakdown | Earnings growth sustains above 20% annually to justify the current multiple without multiple compression over the next 12 months. | →Stable |
| CounterPremium aerospace suppliers with durable moats, best-in-class margins, and consistent earnings beats often maintain high multiples for extended periods as growth compounds the earnings base. | ||
Woodward's return on equity and operating margins are classified as best-in-class versus peers, and the Piotroski F-Score of 8 out of 9 confirms broad-based financial health across profitability, leverage, and efficiency metrics.
→StablePeer-rank breakdown
- Expectation
- Return on equity and operating margins remain above peer medians and the Piotroski F-Score stays at 7 or above over the next 12 months.
CounterAerospace component suppliers face cyclical demand from commercial aviation which can compress margins significantly during downturns, making best-in-class metrics vulnerable to demand cycle turns.
Woodward has beaten analyst earnings estimates in each of the last four quarters with an average surprise of 14.4%, including a 31.2% beat and an 8.6% beat in the two most recent quarters, demonstrating durable above-consensus execution.
→StableEarnings
- Expectation
- The beat streak continues for at least 3 of the next 4 quarters with average surprise remaining above 8%.
CounterSingle-source supply dependencies flagged as a high concentration risk could cause production disruptions that interrupt the beat streak if a key supplier fails.
Revenue growth of 23% year-over-year and earnings growth classified as strong place Woodward among the faster-growing companies in its peer group within the aerospace and defense supply chain.
→StableGrowth breakdown
- Expectation
- Revenue growth stays above 12% annually over the next 12 months as aerospace cycle tailwinds continue.
Counter23% revenue growth in aerospace components is likely partly cyclical recovery from post-pandemic supply chain disruption; the underlying secular growth rate is materially lower.
At a forward price-to-earnings of 37.4x with a PEG ratio of 2.55 and the stock within 1.1% of its 52-week high, the valuation prices in a high level of execution certainty and leaves minimal room for any operational disappointment.
→StableValuation breakdown
- Expectation
- Earnings growth sustains above 20% annually to justify the current multiple without multiple compression over the next 12 months.
CounterPremium aerospace suppliers with durable moats, best-in-class margins, and consistent earnings beats often maintain high multiples for extended periods as growth compounds the earnings base.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Woodward is an aerospace and defense components manufacturer with four consecutive earnings beats averaging 14.4% above estimates, 23% year-over-year earnings growth, and best-in-class margins and return on equity relative to peers — though a forward price-to-earnings of 37.4x and a price within 1.1% of its 52-week high leave virtually no margin of safety at current levels.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 7.0 |
| ROA | 5.3 |
| Gross margin | 1.7 |
| Op margin | 6.2 |
| Net margin | 6.4 |
| Current ratio | 6.2 |
| FCF quality | 3.0 |
| Moat | 6.8 |
| Piotroski F | 8.9 |
- ▸Earnings quality RED FLAG: 37% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
7.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 8.3 |
| EPS growth | 6.6 |
- ▸Strong growth: 23% YoY
Momentum
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 2.4 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 8.3 |
| Price target | 5.9 |
| erm sentiment | 5.0 |
Insider
3.9/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 5.1 |
- ▸Modest insider selling — $5,569,981 (0.022% of mkt cap)
Peer rank
4.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.2 |
| quality rank | 8.3 |
| growth rank | 5.9 |
- ▸Superior ROE vs peers
- ▸Best-in-class margins
Technical
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.0 |
| support resistance | 3.3 |
| 52w position | 8.5 |
| gap | 5.0 |
Risk (lower is worse)
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.5 |
| days to cover | 8.8 |
| volatility | 3.4 |
| put call | 7.5 |
| implied vol | 5.2 |
| beta | 7.9 |
| debt equity | 8.2 |
- ▸Concentration risks: 1 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 | 9.7 |
| dividend safety | 5.2 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 31.0%
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:24d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:3.5<4.5
- ASYMMETRY:-0.5=NEGATIVE
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.50
Upside
-7.5%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeCatalyst-Driven — Earnings in 24d with 4/4 beat streak
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.3 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Growth at 7.5) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:3.5<4.5, ASYMMETRY:-0.5=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.50 — supplementary context, not the trigger for this path.
The strongest dimensions are Growth at 7.5, Risk (lower is worse) at 7.1, and Catalyst at 7.0; the weakest are Value at 3.3, Momentum at 3.5, and Insider at 3.9. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of -0.50 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Consistent Earnings Beat Streak
Trip ifAverage earnings surprise falls below 0% in at least 2 of the next 4 reported quarters.
- P2Best In Class Margins Roe
Trip ifPiotroski F-Score falls below 6, declining more than 2 points from the current 8 out of 9.
- P3Strong Growth Trajectory
Trip ifRevenue growth falls below 8% year-over-year, declining more than 15 percentage points from the current 23%.
- P4Rich Valuation Near High
Trip ifPrice drops below $377.32, reaching the stop-loss level and falling more than 6% below the current $402.50.