Stock metrics explained simply
Every metric DecodeStocks shows is explained here: what it measures, how we calculate it and where its limits are. These are the same explanations as behind the info icons in the app, ordered by the areas of the metrics score.
Valuation
Places selected valuation multiples such as P/E, P/FCF, P/S and PEG relative to a suitable peer group. The narrower industry group is used by preference. Where its data is too thin, the parent sector takes over. Where there is no sufficient comparison basis there either, the metric is left unrated. Lower valuation multiples lead to higher scores within this analysis area. No fair share price and no expected return is derived from it.
Growth
Places the historical development of revenue and earnings using several growth metrics. Both the level and the consistency of that development are taken into account. The score describes historical company data and is not a forecast of future growth.
Profitability
Places margins and capital returns. These metrics relate results achieved to revenue, assets or invested capital, among other bases. The score describes the financial data available and is not a forecast of future profits.
Stability
Places how strongly selected company metrics vary across several periods and how the share price has behaved: its fluctuations, its largest loss and its performance in market crises. The stability score describes the past and says nothing about the future price stability of a stock.
Debt
Places debt levels and interest burden using selected balance-sheet and earnings metrics. Sectors and business models differ structurally here, which is why the metrics are read in their own context.
Cashflow
Places selected cashflow metrics that show the cash generated by the operating business and how it relates to other financial figures.
Dividends
The dividend score places a company's payouts using several metrics, among them dividend yield, payout ratio, dividend growth and the consistency of the dividend. The area enters the metrics score only where the company profile in question takes dividends into account and a reliable assessment is possible.
How the metrics become a score
How a metric is placed within its comparison group, and how the area scores and the metrics score are formed from it, is described in the methodology.