Scoring Methodology

Measures how efficiently a business generates profits and allocates capital. Uses 6 metrics, each sector-calibrated. When a metric is unavailable (e.g. ROIC for banks), it is excluded and its weight is redistributed equally among the remaining metrics.

• ROIC — Return on invested capital. Measures how efficiently capital is deployed to generate returns. Null for financials (ROE used instead).
• ROE — Return on equity. Profitability relative to shareholder equity. Primary metric for financial sector.
• Operating Margin — Operating income as a percentage of revenue. Higher margins indicate pricing power and operational efficiency.
• Net Profit Margin — Bottom-line profitability after all expenses, taxes, and interest.
• Gross Profit / Total Assets — Novy-Marx profitability factor. Measures asset productivity — how much gross profit each dollar of assets generates. Null for financials.
• FCF Yield — Free cash flow relative to market capitalization. Measures actual cash generation available to shareholders.

Assesses the durability of a company's competitive position. AI-scored by default across 5 dimensions (0-20 each), with all ~6,400 tickers pre-scored. Users can override with manual sliders. Learn more about economic moats.

• Switching Costs — How difficult or costly it is for customers to switch to a competitor.
• Network Effects — Whether the product becomes more valuable as more people use it.
• Cost Advantage — Structural cost advantages through scale, process, or resource access.
• Intangibles / IP — Brand value, patents, regulatory licenses, and other intangible assets.
• Scale & Ecosystem — Market dominance, ecosystem lock-in, and distribution advantages.

Evaluates both historical growth and forward-looking analyst expectations. Uses a sector-aware scoring curve. Forward estimates carry 50% of total Growth weight. 5 metrics with fixed weights:

• TTM Revenue Growth (20%) — Trailing twelve-month revenue growth rate.
• 3-Year Revenue CAGR (15%) — Compound annual growth rate over 3 years. Smooths out quarterly volatility.
• TTM EPS Growth (15%) — Year-over-year earnings per share growth.
• Forward Revenue Growth (30%) — Analyst consensus estimate for next-year revenue growth.
• Forward EPS Growth (20%) — Expected earnings growth from analyst estimates.

Inversely scored — lower risk produces higher scores. Evaluates balance sheet health, leverage, and solvency. For financial companies (banks, insurance, REITs), leverage metrics are automatically excluded. 5 metrics with fixed weights:

• Net Debt/EBITDA (30%) — Total debt minus cash, relative to earnings. Net cash (negative) scores maximum. Null for financials.
• Debt/Equity (20%) — Total debt relative to shareholder equity. Lower is better. Null for financials.
• Current Ratio (20%) — Current assets divided by current liabilities. Measures short-term liquidity.
• Interest Coverage (15%) — Operating income relative to interest expense. Higher means more ability to service debt.
• Altman Z / Piotroski F (15%) — Composite of two academic distress-prediction models. Falls back to Piotroski F-Score when Z-Score is unavailable.

Learn about Altman Z-Score · Learn about Piotroski F-Score

Measures whether a stock is fairly priced relative to its earnings, cash flows, and growth. Three of the four metrics use absolute thresholds (a 6% earnings yield is equally attractive regardless of sector). Only EV/EBITDA is scored relative to the sector median, because multiples vary widely by industry. Null-weight redistribution applies when data is unavailable.

• Earnings Yield (30%) — Inverse of forward P/E. Scored on absolute scale: 10%+ yield = 100, 0% = 0. Not sector-calibrated — yield is a universal measure.
• Price-to-FCF (25%) — Market cap divided by free cash flow. Absolute thresholds: ≤10x = 100, ≥60x = 0. Not sector-calibrated.
• PEG Ratio (25%) — Forward P/E divided by forward EPS growth. Absolute thresholds: ≤0.5 = 100, ≥3.0 = 0. Implicitly adjusts for growth differences.
• EV/EBITDA vs Sector Median (20%) — Enterprise value multiple compared to the sector median. The only sector-relative valuation metric — scored at ≤0.5x median = 100, ≥2.0x median = 0.

Optional 6th pillar for Pro users. When enabled, Momentum receives 10% weight and the other 5 pillars scale proportionally to 90%. 4 metrics:

• 50/200-day MA Ratio (30%) — Ratio of 50-day to 200-day simple moving average. Above 1.0 indicates uptrend.
• 52-Week Range Position (25%) — Where the current price sits between the 52-week low and high.
• Relative Strength vs S&P 500 (25%) — Stock's 6-month return compared to the S&P 500 benchmark.
• EPS Estimate Revision (20%) — Change in forward EPS consensus estimate over 3 months.

Stocks are mapped to 4 sector categories, each with tailored scoring thresholds. Learn how sector calibration works.

Example: An operating margin of 15% scores ~33/100 for Technology (where 45% is the threshold) but ~60/100 for Industrials (where 25% is the threshold). Financial companies skip ROIC, GP/Assets, and leverage metrics entirely — ROE is used as the primary profitability metric instead.

Six pre-configured weight distributions inspired by famous investment philosophies. Explore all presets.

When Momentum is enabled (Pro), it receives a fixed 10% weight and all other pillar weights scale to 90% of their preset values.

When a metric is unavailable for a stock (e.g. ROIC for financial companies, or Altman Z-Score for certain firms), its weight is proportionally redistributed among the remaining available metrics within the same pillar. This ensures no stock is penalized for missing data — it's simply scored on fewer, but proportionally weighted, metrics. Learn more.

All financial data is sourced from professional-grade financial data providers, including income statements, balance sheets, cash flow statements, key ratios, analyst estimates, and historical stock prices. Data is refreshed daily via automated processes covering 6,400+ stocks across NYSE, NASDAQ, AMEX, and TSX. The UQS Score algorithm and all scoring logic are proprietary and calculated independently.