No target price is issued: the company falls outside the profile this method looks for.
Financial comments8
Interest coverage below 4×.
Anomalous cash conversion — review capex and non-cash charges.
The share count grows: net dilution.
Stagnation: 3-year earnings CAGR at or below zero. It is scored, not cut: the penalty is charged by the Impairment modifier, where it is continuous and capped.
Expected stagnation: consensus points to no growth.
ROIC below the required return: growth destroys value.
Median payout of 238 % of FCF: the dividend yield only counts half in the shareholder-returns modifier.
Impairment of fcf: 29 % of the window, weighted by recency → 3.5 points. It is the only place in the model where a bad year subtracts.
Calculation comments3
No consensus candidate passed the plausibility contract: nothing is rewritten and the path falls to the next rung of the cascade.
The estimated net income does not sit plausibly against the base (10.38 the base in the first year, 10.38 annualised at the end): the consensus is discarded rather than trimmed, and the cascade drops a rung.
Anomalous financial year(s) in FCF (M4 payout) (2021, 2022): out of this component's estimators; they still count in the counters and hard cuts.
Quality factors
Each factor scores 0–100 on its own scale; the score is their weighted average.
Score
Weight → points
Growth consistency37
Earnings · fit to the log-linear line · σ_resid = 0.27522 %0
Earnings · hit rate · 47 %16 %2
Earnings · volatility · σ = 0.51211 %0
Revenue · fit to the log-linear line · σ_resid = 0.03614 %93
3-year earnings CAGR at or below zero (-10.7 %): the engine has slowed. It is scored on the acceleration scale, not cut — a binary cut turned a continuous fact into a cliff, and fired on 36 % of the universe.
Stagnation: 3-year earnings CAGR at or below zero. It is scored, not cut: the penalty is charged by the Impairment modifier, where it is continuous and capped.
Expected stagnation: consensus points to no growth.
·15 → 3,00
FCF quality100
FCF / net income conversion · 2.32×100 %100
Window chosen: last 3 years (the best of those evaluated).
Alternative · last 5 years: conversion 1.38× → 100 points.
Positive FCF in 3 of the 3 years in the window.
Anomalous cash conversion — review capex and non-cash charges.
·15 → 15,00
Debt5
Net debt / EBITDA · 5.69×100 %5
Interest coverage (EBIT / |interest|) = 1.9×.
Interest coverage below 4×.
·15 → 0,74
Return on invested capital (ROIC)4
Level (recency-weighted mean) · 2.1 %50 %0
Spread over the required return · −0.1 pp over the 10 % required30 %0
Trend · −3.8 pp over 5 years20 %18
Average ROIC (2.1 %) below the required return (10 %): growth destroys value.
ROIC below the required return: growth destroys value.
·15 → 0,55
Weighted base
·100 → 35,42
Modifiers and penalties
The factors build the score; the modifiers correct it, within +23 / −28. Same 0–100 bar, 100 is always good.
Score
Range
Points
Gross margin trend · +1.2 pp accumulated over 4 years62
±8
+1,9
Altman Z'' · Z'' = 3.25100
0/−15
0,0
Shareholder returns · dilutes 0.1 % a year0
Effective buyback (net share count) · 0.1 % of dilution0
Dividend yield (last DPS / price today) · 2.9 % · does not count: the active branch is dilution—
