Far Too Early to Buy the Dip in Triumph Financial

Bearish   

Triumph Financial surged 64% in 2023 and another 13.3% last year, but 2025 is not beginning the way the bulls might have hoped. The stock has already erased all of 2024’s gains and it is only January. In this analysis we’ll show why we think it is far too early to buy this dip by looking at valuation and Elliott Wave analysis.

We cannot help but wonder why would anybody pay over $100 a share as recently as December for a company that earned just 54 cents per share last year. Answering that question is beyond our abilities, but apparently investors who did pay that price are now regretting it and selling. But even below $80 a share now, we think that the stock remains grossly overvalued at a 2026 P/E of 30.

And while an overvalued stock can remain that way for a long time, the Elliott Wave chart below is what the bulls should worry about.

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Triumph Financial daily chart Elliott Wave analysis

It reveals that the 59% selloff Triumph Financial investors had to suffer through in 2022 took the shape of a five-wave impulse. We’ve marked the pattern 1-2-3-4-5 in wave (a), where the five sub-waves of wave 3 are also visible. Every impulse is followed by a correction and that’s precisely what the 2023-2024 recovery stands for. It can be seen as a w-x-y double zigzag in wave (b), whose wave ‘x’ is a triangle. Note how it ended not long after crossing the 61.8% Fibonacci resistance level.

If this count is correct, the current decline is the beginning of wave (c), whose downside targets lie below the bottom of wave (a). In other words, more weakness to sub-$45 and towards $35 a share makes sense going forward. That’ll be a decline of more than 50% from the current level. Now let’s zoom out and see where does this (a)-(b)-(c) correction fit into the bigger picture.

The weekly chart of Triumph Financial shows that the 2022 decline was preceded by an impulsive uptrend lasting roughly seven years. It can easily be labeled (1)-(2)-(3)-(4)-(5) and further strengthens our conviction that another notable drop in wave (c) is now unfolding. Once in the $30s, both the stock’s valuation and Elliott Wave setup would be pointing to the upside. We wouldn’t touch it until then.

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