FRGT

We rate Freight Technologies, Inc. (FRGT) as Avoid with a composite score of 37.1/100 at a current price of $1.48. The stock falls in the bottom quintile of our universe across key quantitative factors, and the multi-factor weakness suggests a high probability of continued underperformance.

The rating is primarily driven by strength in momentum (72th percentile) and value (42th percentile), which together account for the majority of the composite score. Offsetting weakness in stability (11th percentile) and quality (15th percentile) tempers our overall conviction. We assign a No Moat rating (9/100), Very High uncertainty, and Standard capital allocation.

Key items to watch: whether strong momentum is fundamentally supported by revenue trends. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

Freight Technologies, Inc. holds a top-quartile position (#0 of 50) within the Services sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 37.1/100 places it at rank #3897 in our full 7,333-stock universe. At $4M in market capitalization, Freight Technologies, Inc. is a small-cap player in the Services space, which limits certain scale advantages but may allow for more agile strategic execution.

Despite positive momentum (72th percentile), revenue contraction of -22% creates a divergence between price action and fundamental trajectory. This divergence suggests either that the market is looking through near-term weakness or that technical factors are temporarily inflating the stock. Investors should assess whether the revenue decline reflects cyclical weakness or structural challenges.

The margin cascade tells an important story: gross margins of 15% (-44.6pp vs sector) narrow to operating margins of -49% (-52.7pp vs sector) and net margins of 21.7%, yielding a gross-to-net conversion rate of 145%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $1.48, Freight Technologies, Inc. is trading near fair value based on current fundamentals. Our value factor score of 42/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at a P/E of 3.0x (a 87% discount to the sector median of 23.7x), EV/EBITDA of 1.0x (discounted to peers), P/B of 0.2x, P/S of 0.1x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.

We assign a Very High uncertainty rating to Freight Technologies, Inc.. The stock exhibits multiple compounding risk factors: elevated market sensitivity (beta of 2.65), below-average price stability (11th percentile), weak quality scores (15th percentile). The extreme uncertainty around future cash flows makes precise valuation difficult, and the range of outcomes is exceptionally wide. Only investors with high risk tolerance and extended time horizons should consider this name.

Specific risk factors that inform our assessment include: elevated market sensitivity (beta of 2.65); below-average price stability (11th percentile); weak quality scores (15th percentile). Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 11th percentile and quality factor at the 15th percentile provide a quantitative summary of the overall risk landscape.

We identify limited risk mitigants at this time, which contributes to our very high uncertainty assessment. Investors should monitor for improvement in balance sheet metrics, margin stability, and business predictability that could warrant a downgrade in our risk assessment over time.

We rate Freight Technologies, Inc.'s capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 29.6%, and the balance sheet is managed within acceptable parameters (D/E: 94%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; Freight Technologies, Inc. falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. Absent a dividend, the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.

In summary, Freight Technologies, Inc. receives a Avoid rating with a composite score of 37.1/100 (rank #3897 of 7,333). Our quantitative framework assigns a No Moat (9/100, trend: stable), Very High uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 34/100.

Our analysis does not support a constructive view on Freight Technologies, Inc. at this time. The combination of limited competitive advantages, very high uncertainty, and standard capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.