Rating is calculated from two main components:
1. Profitability Score (55% weight)
Assesses how profitable the company is:
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ROE (Return on Equity) ā How efficiently the company generates profit from its own equity. Benchmark: 25%. Read at
What is ROE.
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NPM (Net Profit Margin) ā What percentage of revenue becomes net profit. Benchmark: 25%. Read at
What is NPM.
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EPS Growth ā Earnings per share growth compared to last year. Read at
What is EPS.
Each is normalized to a 0ā100 scale, then averaged.
2. Valuation Score (45% weight)
Assesses whether the stock price is cheap or expensive:
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Current PER vs Fair PER ā Fair PER is automatically calculated based on ROE, earnings growth, industry sector, and historical PER. If current PER is below Fair PER, the score is high. Read at
What is PER.
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Current PER vs Historical Median PER ā Compared to the 5-year average PER. If currently cheaper than historical average, the score is high.
Final Score = (Profitability Ć 55%) + (Valuation Ć 45%)