Since January 2026, Matthews has been in a holding pattern, posting a small loss of 3.4% while floating around $26.99. The stock also fell short of the S&P 500’s 9% gain during that period.
Is now the time to buy Matthews, or should you be careful about including it in your portfolio? See what our analysts have to say in our full research report, it’s free.
Why Do We Think Matthews Will Underperform?
We’re cautious about Matthews. Here are three reasons we avoid MATW, plus one stock we’d rather own.
1. Revenue Spiraling Downwards
Examining a company’s long-term performance can provide clues about its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Matthews’s demand was weak over the last five years as its sales fell at a 5% annual rate. This wasn’t a great result and signals it’s a low quality business.
2. Cash Burn Ignites Concerns
If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.
Over the last two years, Matthews’s demanding reinvestments to stay relevant have drained its resources, putting it in a pinch and limiting its ability to return capital to investors. Its free cash flow margin averaged negative 3.7%, meaning it lit $3.70 of cash on fire for every $100 in revenue.
3. New Investments Fail to Bear Fruit as ROIC Declines
A company’s ROIC, or return on invested capital, shows how much operating profit it makes compared to the money it has raised (debt and equity).
Unfortunately, Matthews’s ROIC averaged 4.4 percentage point decreases each year over the last few years. Paired with its already low returns, these declines suggest its profitable growth opportunities are few and far between.
Final Judgment
We cheer for all companies serving everyday consumers, but in the case of Matthews, we’ll be cheering from the sidelines. With its shares underperforming the market lately, the stock trades at $26.99 per share (or a trailing 12-month price-to-sales ratio of 0.7×). The market typically values companies like Matthews based on their anticipated profits for the next 12 months, but there aren’t enough published estimates to arrive at a reliable number. You should avoid this stock for now - better opportunities lie elsewhere. We’d recommend looking at the most entrenched endpoint security platform on the market.
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