# How each stock gets valued Stock Analyza is an independent research project. Every analysis follows the same framework, so the numbers from one company can be compared with the next. ## The process 1. **Route the company to its sector framework.** A mortgage REIT, a chipmaker and a pipeline company are not valued with the same metrics. 2. **Pick the economic metric that fits.** Free cash flow for most companies, book value and distributable earnings for mortgage REITs, and other sector equivalents where standard metrics mislead. 3. **Value three scenarios.** A bear, base and bull case, each with explicit assumptions, using a primary and a secondary valuation method. 4. **Triangulate.** The methods are weighted into one Bear, Base and Bull Value, plus a probability-weighted expected value. 5. **Apply a margin of safety.** Riskier and harder-to-forecast businesses require a bigger discount to the Base Value. The result is the maximum buy price. 6. **Run an adversarial review.** The arithmetic is recomputed independently, and the strongest bull and bear counter-arguments are tested before the verdict is final. ## Reading the verdict **Buy** means the price is at or below the maximum buy price. **Hold** means the stock may be below fair value, but not by enough to cover the risk. **Sell or avoid** means the price already exceeds what the business is likely worth. Each analysis also lists what would change the view: green, yellow and red signals to watch, and the thesis breakers that would invalidate it. ## The scores **Business quality** (0 to 100) rates moat, returns on capital, balance sheet, earnings quality, growth runway, management and governance. **Valuation** (0 to 100) rates the discount to fair value, downside protection and how well the methods agree. **Confidence** (0 to 25, with a letter grade) rates how reliable the forecast is, which drives the required margin of safety. ## Free and premium Selected analyses are free on this site. The complete set of in-depth analyses, the archive and voting on upcoming analyses are available to members on [Patreon](https://www.patreon.com/stockanalyza). ## Disclaimer All content on this site is provided solely for research and educational purposes. It is not personalized investment, financial, legal or tax advice, and it is not a recommendation to buy or sell any security. Valuations rely on assumptions and third-party data that may prove incorrect. Past results do not predict future returns. Investors can lose part or all of their invested capital. Do your own research and consider consulting a licensed advisor before making investment decisions. Stock Analyza is not affiliated with any company it analyzes and does not receive compensation from them.