The Conviction Score is a 0-to-100 rating generated by our proprietary scoring model. Instead of checking dozens of metrics individually, it distills multiple dimensions of a stock's investment profile into a single number that helps you quickly assess its strength.
How It Works
The Conviction Score uses a proprietary weighted model that analyzes five key dimensions. The exact weighting is part of our scoring methodology, but here is what each dimension measures:
1. Valuation
Is the stock fairly priced? This dimension compares the stock's valuation metrics against sector peers and historical norms to determine whether you'd be paying a premium or getting a discount.
Stocks trading below their estimated fair value score higher. Those trading at steep premiums score lower.
2. Growth
Are the fundamentals improving? This dimension evaluates revenue and earnings trajectories, looking for consistent, sustainable growth rather than one-off spikes.
Companies with strong, accelerating growth score higher. Those with stagnating or declining fundamentals score lower.
3. Analyst Consensus
What does professional research say? Wall Street analysts collectively spend millions of hours studying companies each year. While no single analyst is always right, the consensus view carries useful signal.
Stocks with strong buy consensus and price targets above the current price score higher.
4. Momentum
Is the trend working for or against you? This dimension captures recent price behavior and relative strength, helping identify stocks with positive technical trajectories.
Stocks trending upward with strong relative performance score higher.
5. Sentiment
What is the market mood? This dimension analyzes news coverage and broader market perception to gauge whether sentiment is a tailwind or headwind.
Stocks with favorable coverage and positive market perception score higher.
How to Interpret the Score
80 to 100: Very strong across most or all factors. The stock shows solid fundamentals, positive momentum, and favorable analyst views. Still worth researching the details before making any decision.
60 to 79: Above average. The stock is strong in most areas but may have one or two weaker components. Check which factors are pulling the score down.
40 to 59: Mixed signals. Some factors are positive, others are concerning. This range requires careful analysis to understand the full picture.
20 to 39: Below average. Multiple factors are showing weakness. Proceed with extra caution and make sure you understand why the score is low.
0 to 19: Significant concerns across most factors. The stock faces challenges in valuation, growth, momentum, sentiment, or some combination.
What the Score Is Not
The Conviction Score is not a buy or sell recommendation. It's a research tool that helps you prioritize which stocks deserve deeper analysis and which ones have potential red flags.
A high score doesn't guarantee a stock will go up. A low score doesn't mean a stock is a bad investment. Sometimes contrarian opportunities exist precisely because most signals look negative.
Think of it like a health checkup. A good report means things look solid right now, but it's not a guarantee of future health. A concerning report means you should investigate further, not panic.
Using the Score Effectively
The Conviction Score works best as a screening tool. When you're looking at dozens of potential investments, sorting by conviction score helps you focus your limited research time on the strongest candidates.
After the score narrows your list, dig into the individual components. A stock with a score of 72 might have excellent growth and momentum but weak valuation, which tells a very different story than a stock at 72 with strong valuation but declining momentum.
The components behind the score matter as much as the number itself.
This content is for informational purposes only and does not constitute financial advice.