Methodology
How we value a company
The models behind every fair value, what the TickerWorth Score measures, and the point at which we decline to publish a number.
What we do
We estimate what a business is worth from the cash it can produce, and then we show you the arithmetic. The base year is read out of the company’s own annual filing through SEC EDGAR wherever one exists, and each figure on a company page cites the filing it came from. Of the companies we cover, 130 are modelled by hand instead, line by line, with the modeller’s own reservations published beside the result.
One discounted cash flow is not enough on its own. We first decide what kind of business it is and name the model that suits it, then run every model whose inputs exist: a discounted cash flow, peer multiples, asset and book value, dividend models and, for banks and insurers, a bank model built on book value instead of a DCF. The published fair value blends them, weighted toward the model that suits the business, and the company page says which model leads. When the models disagree too widely to name a single number we publish the range and decline to call the company cheap or expensive. When no model fits at all, we publish that instead of a figure.
Nothing here is a forecast, a price target or advice. It is a model and it can be wrong. Every input is printed so you can find the place where you think it is.
What the score measures
Each metric is ranked against companies in the same sector and region rather than against a fixed rule, and the cohort is published beside the result.
- Value
- Weight 25%
- How cheap it looks on earnings, cash flow, sales and book value — measured against companies in the same industry and market, not a one-size-fits-all rule.
- Price vs worth
- Weight 15%
- How today's price compares with our estimate of what the business is worth — every valuation model we can run, weighted toward the one that suits this kind of business.
- Quality
- Weight 20%
- How good the business itself is — the profit it keeps from each sale and the return it earns on shareholders' money.
- Financial health
- Weight 15%
- Whether it could survive a bad year — how much it owes, whether it can cover short-term bills, and how its cash compares with its debt.
- Growth
- Weight 15%
- How fast sales and profits are actually growing, and whether the market expects earnings to rise from here.
- Momentum
- Weight 10%
- What the price has been doing lately — its one-year return, where it sits in its yearly range, its trend, and the tone of recent headlines.
What a grade means
- A
- 62 and above
- in the top ~10% of our scores
- B
- 56 and above
- in the top ~25% of our scores
- C
- 46 and above
- around the middle of our scores
- D
- 39 and above
- in the bottom ~30% of our scores
- F
- 0 and above
- in the bottom ~10% of our scores
How sure we are, and when we refuse
The confidence tier says how much of what we look for we could check. Below a coverage floor we decline to publish a score at all rather than grading a company on a handful of inputs.
- High confidence
- We could check everything we look for on this company.
- Medium confidence
- Good data, with some gaps — treat the number as a guide, not a verdict.
- Low confidence
- Thin data. We're showing a range instead of a single number, and we won't award a top grade on this little information.
- Not enough data
- We can't score this company honestly with the data we can see, so we're not going to guess.