Every stock is evaluated across five core dimensions. Each pillar receives a sub-score, and those sub-scores are combined using a weighted formula to produce the final Strong Buy Score.
1. Fundamental Health
25% Weight
Evaluates the company's financial foundation: revenue growth consistency, earnings quality, gross and net margin stability, return on equity, free cash flow generation, and balance sheet strength (debt-to-equity ratio, current ratio). Companies with strong, consistent fundamentals score higher.
2. Valuation Metrics
25% Weight
Compares the stock's current valuation against sector peers and its own historical averages. Factors include trailing and forward P/E ratio, price-to-sales, PEG ratio, EV/EBITDA, and discounted cash flow analysis. Stocks trading below fair value relative to peers receive higher marks.
3. Growth Trajectory
20% Weight
Measures both historical and projected growth: revenue growth rate, earnings growth acceleration, analyst consensus estimates for forward earnings, and revenue expansion trends. Accelerating growth trajectories receive higher scores than decelerating ones, even if absolute numbers are high.
4. Technical Momentum
15% Weight
Analyzes price action and trend strength: relative strength vs. the broader market, proximity to key demand zones, moving average alignment, and volume trends. This pillar helps identify whether the stock has buying momentum or is in distribution.
5. Risk Assessment
15% Weight
Evaluates downside risk: historical and implied volatility, debt burden and interest coverage, earnings consistency (beat/miss patterns), sector-specific risks, and overall market conditions. Lower risk profiles contribute positively to the total score.
Score Ranges & Interpretation
The final score falls on a 0–100 scale. Here is how to interpret each range:
80–100
Strong Buy
Exceptional fundamentals, attractive valuation, strong growth, and manageable risk. The stock meets most or all scoring criteria at a high level.
60–79
Buy / Favorable
Solid overall profile with minor weaknesses in one or two pillars. Generally favorable risk-reward setup.
40–59
Neutral / Hold
Mixed signals across pillars. The stock may have strong fundamentals but poor valuation, or good growth but elevated risk.
20–39
Weak / Caution
Significant concerns in multiple pillars. Elevated risk, poor valuation, or deteriorating fundamentals require caution.
0–19
Avoid
Major red flags across most dimensions. High risk of capital loss based on current data.
What the Score Does NOT Tell You
The Strong Buy Score is a quantitative snapshot based on available data at the time of analysis. It has important limitations:
Not a prediction
Does not predict future price movements or guarantee returns
Not forward-looking
Does not account for breaking news, geopolitical events, or sudden market shocks
Not advice
Does not replace your own due diligence or a professional financial advisor
Not a signal
Is not a buy/sell signal — it is a research tool to help organize your analysis
Educational Disclaimer: The Strong Buy Score is an educational tool, not financial advice. Past scoring accuracy does not guarantee future results. Always conduct your own research and consult a qualified financial advisor before making any investment decisions.
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