The Rulebook
Our rating engine runs over 100 checks on every standardized filing. Here are the core financial rules that drive the bulk of the "Quality Score."
Measures raw top-line expansion compared to the same quarter last year.
Tech/Fintech: >30% (Bullish), <0% (Bearish)
Industrial: >10% (Bullish), <0% (Bearish)
Tracks whether existing shareholders are being diluted by new issuance or rewarded with buybacks.
Buybacks (-shares): Positive impact
Dilution >5%: Negative impact
Dilution >15%: Severe penalty
Free Cash Flow as a percentage of Revenue. The ultimate truth of profitability.
>20%: Elite Cash Generator
<-20%: Cash Burner
Measures the core markup on products/services sold. Adjusts heavily by sector.
Software: >75%
Retail: >35%
Hardware: >45%
For unprofitable companies (especially Biotech), how many years can they survive at current burn rates?
<1 Year: High Risk (Dilution imminent)
Are operating expenses growing slower than revenue? This indicates scalability.
Valuation check relative to revenue. Adjusted for growth rate (fast growers 'earn' higher multiples).
General: >5x is expensive
Valuation check relative to net income.
>50x: Expensive (unless hyper-growth)
Analyzes Cash Conversion Cycle (CCC). How fast does the company turn inventory/spend into cash?
Rewards companies that return >20% of their Free Cash Flow to shareholders via dividends or buybacks.
Plus 90+ other signals including Auditor status, Debt Covenants, Insider Trading patterns, and more.