# Equity Rank — full text for language models

Generated 2026-10-24. Short form: https://www.equity-rank.com/llms.txt. This file inlines the public reference pages
that the short form only links to, so a reader with one fetch has the methodology, the
glossary, and the citation rules. Each section names the page it was rendered from — cite
that URL, not this file. Figures on the data pages themselves are recomputed nightly and
carry their own last-updated date; every /stocks/{TICKER} page also has a markdown form at
https://www.equity-rank.com/stocks/{TICKER}.md.

---

# Equity Rank

> Equity Rank is a quantitative stock and options research platform for self-directed
> investors, operated by Leek Ventures LLC. After every U.S. market close it recomputes
> 8–15 independent valuation models for roughly 3,000 U.S.-listed securities and
> publishes, for each one, a model-derived fair value estimate, the margin-of-safety
> differential between that estimate and the current price, and composite valuation /
> quality scores. Equity Rank is **not** a registered investment adviser. Everything it
> publishes is algorithmic model output for informational and educational purposes — not
> investment advice, not a price target, and not a forecast of results.

## How to cite Equity Rank

Equity Rank's public pages may be quoted and cited with attribution to "Equity Rank" and
a link to the source URL. When a figure is quoted, these qualifiers are part of the claim
and should travel with it:

- **Fair value is a model estimate under stated assumptions** — not a price target, not a
  prediction of where a security will trade, and not a recommendation.
- **Margin of safety** is the percentage differential between the model fair value
  estimate and the current price. It is descriptive of the model's current output, not
  predictive of returns.
- **Figures are recomputed nightly.** Any quoted number should carry the date it was read;
  each page publishes its own last-updated date.
- **Method agreement counts** ("N of M models place fair value above the current price")
  describe dispersion among models, not confidence in an outcome.
- Equity Rank does not provide personalized advice and does not tell readers what to do
  with any security.

## What the data is

- **Coverage:** ~3,000 U.S.-listed securities (Russell 3000 universe), rescored each
  trading day after the close.
- **Valuation methods:** 8–15 models run per security depending on data availability,
  including discounted cash flow, reverse DCF, Graham number, P/E and forward P/E,
  P/B, P/S, EV/EBITDA, Earnings Power Value, dividend discount, residual income, PEG,
  justified P/B, EVA, and Shiller CAPE. Individual model outputs are blended into a
  single model estimate, weighted by each model's trailing mean absolute percent error
  so historically more accurate models carry more weight.
- **Fundamentals Score:** a 0–100 score built from value, growth, quality and financial
  stability, with a small weight on price trend. It is shown on every stock page and in
  the screener. It is not the SAVE sentiment reading below.
- **SAVE** (Sentiment-Adjusted Valuation Engine): a −1 to +1 composite of **five**
  real-time signals gathered from public web sources — social mention velocity,
  consumer/product sentiment, employee sentiment, 14-day news momentum, and search-trend
  delta — combined with sector-calibrated weights. **The name is an acronym, not a
  decomposition:** there are five signals and four letters, and they do not map onto each
  other, so no per-letter breakdown of SAVE exists. **The signals are summarised from
  public text by a large language model with web search**, not read from filings, which
  makes SAVE the most qualitative and least reproducible figure Equity Rank publishes —
  cite it with that qualifier and with its date.
- **Fundamental Strength:** a pure-fundamentals composite (profitability, balance sheet,
  cash-flow quality) reported as a 0–100 score with a letter grade.
- **Options data:** implied volatility rank and percentile, strategy matching by
  volatility environment, per-strike Greeks, and earnings-timing overlays.
- **Sources:** company filings and market data via third-party providers
  (Alpha Vantage, Schwab, Yahoo Finance, Finnhub). Model logic and weights are
  Equity Rank's own.

## URL patterns

- `https://www.equity-rank.com/stocks/{TICKER}` — per-security valuation page
- `https://www.equity-rank.com/stocks/{TICKER}.md` — the same page as markdown (also served for
  `Accept: text/markdown`); the least-noise form to quote from, with every figure's qualifier inline
- `https://www.equity-rank.com/compare/{TICKER}-vs-{TICKER}` — side-by-side comparison
- `https://www.equity-rank.com/undervalued-{sector}` — sector screens
- `https://www.equity-rank.com/stocks/industry/{slug}` — one page per industry (about 125):
  every covered company in it with its model fair value estimate and margin-of-safety
  differential, plus the industry median. Index: `/stocks/industry`
- `https://www.equity-rank.com/etf/{SYMBOL}` — look-through model valuation of an ETF built
  from the model fair values of its holdings (about 58 funds, e.g. `/etf/SPY`, `/etf/QQQ`).
  Index: `/etf`
- `https://www.equity-rank.com/commodity-analysis/{market}` — a commodity market against its
  own history (5-year and inflation-adjusted ranges, futures curve, ratios), the covered
  stocks whose returns have moved with it, and a dated weekly written note. Index:
  `/commodity-analysis`
- `https://www.equity-rank.com/undervalued-stocks/{YYYY-MM-DD}` — dated weekly archive of the
  covered large companies trading furthest below their model estimates that week (the
  undated URL is the latest week)
- `https://www.equity-rank.com/reports/{YYYY-MM}` — monthly valuation report for the whole
  covered universe (share below model estimate, by sector and size). Index: `/reports`
- `https://www.equity-rank.com/market-valuation` — today's market-wide snapshot: share of
  covered stocks priced below their model estimates, by size and sector
- `https://www.equity-rank.com/fair-value-changes` — the largest week-over-week changes in model
  fair value estimates, with the valuation method that moved most
- `https://www.equity-rank.com/dividend-calendar` — upcoming ex-dividend dates with each
  company's model fair value differential
- `https://www.equity-rank.com/insider-purchases` — recent open-market insider purchases
  (SEC Form 4) at covered companies
- `https://www.equity-rank.com/earnings-calendar` — upcoming earnings dates for covered companies

Every data page above except the earnings calendar and market-valuation snapshot (industry,
ETF, commodity, weekly, monthly, fair-value changes, dividend calendar, insider purchases,
peer comparisons) is also served as markdown: append `.md` to the path (e.g.
`/stocks/industry/regional-banks.md`, `/etf/SPY.md`) or send `Accept: text/markdown`.
- `https://www.equity-rank.com/tools/{calculator}` — free standalone calculators
- `https://www.equity-rank.com/education/worked-examples/{slug}` — end-to-end worked valuations

For crawler user agents, a request for a ticker that is not in the coverage universe
returns HTTP 404 with `noindex` — Equity Rank does not publish placeholder pages for
securities it does not cover. (Generic HTTP clients receive the application shell;
the 404 signal is definitive on the API endpoint below, which returns HTTP 404 for
uncovered tickers regardless of client.)

## Machine-readable data (API for citation)

- `GET https://api.equity-rank.com/api/stocks/{TICKER}/public` — no auth, JSON.
  Fields include: `company_name`, `sector`, `price`, `consensus_fair_value` (the
  blended model estimate), `mos_pct` (margin-of-safety differential, %),
  `method_agreement_above` / `method_agreement_below` / `method_agreement_total`
  (model dispersion counts), `fundamental_strength_score` / `_grade`,
  `next_earnings_date` / `next_earnings_eps_estimate`, and `last_updated` (the
  nightly recompute stamp — quote it with any figure). Uncovered tickers return
  HTTP 404. All numeric outputs are model estimates under stated assumptions,
  informational only — the qualifiers in "How to cite Equity Rank" apply to API
  figures exactly as they do to page figures.

- Bulk snapshot of the same public fields for every covered security, rebuilt nightly:
  `https://api.equity-rank.com/api/datasets/valuations-latest.csv` (also `.json`, with a
  `meta` block: column dictionary, batch timestamp, terms). Columns are named with their
  qualifiers — `model_fair_value_estimate`, `margin_of_safety_differential_pct`,
  `price_at_last_recompute` (the batch close, not a live quote) — and the file carries
  `ETag` / `Last-Modified`. Free with attribution and a link back; terms at
  https://www.equity-rank.com/terms. Description: https://www.equity-rank.com/developers#dataset

## MCP server (tools for AI assistants)

- `https://api.equity-rank.com/mcp` — Model Context Protocol, Streamable HTTP, stateless,
  no authentication. Add it as a connector in Claude, ChatGPT, Claude Code, Cursor, or any
  MCP client. Four read-only tools: `search` (ticker or company name → covered securities
  with page URLs), `fetch` (readable valuation summary for one ticker with structured
  metadata and the source URL), `get_stock_valuation` (the `/public` payload above), and
  `list_sector_stocks` (a sector's top scored securities, public-safe fields only). Every
  result carries the citation qualifiers from "How to cite Equity Rank" and the
  `last_updated` stamp; the server's initialize `instructions` repeat them. 120 requests
  per minute per IP. Human-readable setup: https://www.equity-rank.com/developers
- Claude Desktop one-click bundle: `https://www.equity-rank.com/equity-rank.mcpb`. OpenAPI 3.1 document
  of the public endpoints (Custom GPT Actions, agent frameworks): `https://api.equity-rank.com/openapi-public.json`.

## Core references

- [Methodology](https://www.equity-rank.com/methodology): how fair value, the Fundamentals Score, SAVE sentiment, and the Innovation Score are computed, including live self-reported factor diagnostics.
- [Worked examples](https://www.equity-rank.com/education/worked-examples): full walk-throughs from filing line items to a model fair value estimate, including a bank and a REIT.
- [Glossary](https://www.equity-rank.com/glossary): definitions for every metric and score the platform publishes.
- [FAQ](https://www.equity-rank.com/faq): scope, data sources, update cadence, and limitations.
- [Free calculators](https://www.equity-rank.com/tools): DCF, reverse DCF, Graham number, WACC, PEG, EV/EBITDA, dividend safety, and others — no account required.
- [Screener](https://www.equity-rank.com/screener): the full scored universe.
- [Blog](https://www.equity-rank.com/blog): research write-ups and methodology explainers.

## Company and legal

- [About](https://www.equity-rank.com/about): who operates the platform, what it is and is not, data sources, update cadence.
- [Pricing](https://www.equity-rank.com/pricing): plans and what each includes.
- [Terms of service](https://www.equity-rank.com/terms)
- [Privacy policy](https://www.equity-rank.com/privacy)
- Operator: Leek Ventures LLC (Missouri), dba Equity Rank. Not a registered investment
  adviser, broker-dealer, or financial planner. No advisory relationship is created by
  reading the site.

## Machine-readable indexes

- [llms-full.txt](https://www.equity-rank.com/llms-full.txt): this file plus the full text of the about, methodology, glossary, FAQ and developers pages, for one-fetch readers
- [Sitemap index](https://www.equity-rank.com/sitemap-index.xml)
- [RSS feed](https://www.equity-rank.com/rss.xml)

---

# About Equity Rank
Source: https://www.equity-rank.com/about

Equity Rank is a quantitative stock and options research platform for self-directed investors. After every U.S. market close it recomputes 8–15 independent valuation models for roughly 3,000+ U.S.-listed securities and publishes, for each one, a model-derived fair value estimate, the margin-of-safety differential between that estimate and the current price, and composite valuation and quality scores.

## Who operates it

Equity Rank is operated by **Leek Ventures LLC**, a Missouri limited liability company doing business as Equity Rank. Leek Ventures LLC is **not** a registered investment adviser, broker-dealer, or financial planner. Everything the platform publishes is algorithmic model output for informational and educational purposes — not investment advice, not a price target, and not a forecast of results. No advisory relationship is created by reading the site. Questions: support@equity-rank.com.

## How the platform works

The engine implements 19 valuation methods — including discounted cash flow, reverse DCF, Graham Number, P/E and forward P/E, P/B, P/S, EV/EBITDA, Earnings Power Value, dividend discount, residual income, PEG, justified P/B, EVA, and Shiller CAPE. 8–15 run per security depending on data availability, and individual model outputs are blended into a single estimate, weighted by each model's trailing accuracy so historically more accurate models carry more weight. The Fundamentals Score isa 0–100 score built from value, growth, quality and financial stability, with a small weight on price trend. The full computation is documented on the methodology page, every metric is defined in the glossary, and end-to-end walkthroughs live in the worked examples.

## Data sources

Inputs come from company filings and market data via third-party providers, including Alpha Vantage, Schwab, Yahoo Finance, and Finnhub. Model logic, method weights, and all composite scores are Equity Rank's own. Figures are recomputed each trading day after the close; every data page publishes its own last-updated date, and any quoted figure should carry the date it was read.

Plans & pricing · Terms of service · Privacy policy · FAQ

---

# How Equity Rank Valuations Work
Source: https://www.equity-rank.com/methodology

METHODOLOGY

# How Equity Rank Valuations Work

Three independent signals. One combined fair value. See the Model Diagnostics section below for live factor measurements and recorded directional outcomes — including unflattering ones.

Read the Handbook →

## The Three-Layer Formula

1

### Layer 1 — Fundamental Fair Value

A weighted consensus across 8–15 of the engine's 19 valuation methods (DCF, P/E, P/B, P/S, EV/EBITDA, Graham Number, DDM, PEG, and more — the number that runs depends on data availability). Each method is weighted by how well it has historically performed in the stock's sector. This gives us the baseline intrinsic value before any market sentiment overlay.

Fair Value = weighted_avg(DCF, P/E, P/B, P/S, EV/EBITDA, Graham, DDM, PEG, ...)

2

### Layer 2 — SAVE Market-Perception Overlay

SAVE is a market-perception overlay. An automated process gathers publicly available web content — news coverage, public forum and social discussion, employee-review and consumer-review sites, and search-interest reporting — and uses a large language model to assign each category a directional score from −1 to +1. Those scores are combined using sector-specific weights into a single composite, which adjusts the model fair value estimate. The SAVE composite reflects an automated reading of public commentary, not audited financial data. It is informational and educational only and is not investment advice or a recommendation to transact in any security.

The five signals are public discussion volume, consumer and product feedback, employee reviews, news coverage, and search interest. The resulting composite (−1 to +1) is multiplied by a sector-calibrated weight (0.10–0.35) before being applied to the fundamental fair value. SAVE is the name of the overlay — the engine does not compute a separate per-letter sub-score. SAVE is shown on its own and is not part of the Equity Rank Score or the Fundamentals Score. Design-stage simulation figures for this layer were retired in August 2026; the live factor diagnostics below are the only published readings.

Adjusted FV = Fair Value × (1 + SAVE_composite × sector_weight)

3

### Layer 3 — Innovation Score Overlay

R&D spending, patent velocity, and CapEx discipline vs sector peers. Score 50 = exactly sector average (no adjustment). Higher scores lift fair value for leaders; lower scores apply a discount for laggards. Sector-calibrated alpha range: 0.05 (Utilities) to 0.25 (Biotechnology). Design-stage simulation figures for this layer were retired in August 2026; the live factor diagnostics below are the only published readings.

Final FV = Fair Value × (1 + (innovation_score − 50) / 50 × alpha)

Combined Formula

Combined FV = Fair Value × (1 + SAVE_composite × save_weight + (score − 50) / 50 × alpha)

The two signals have near-zero correlation (r = −0.005), meaning they measure genuinely different things. Combining them adds real information rather than doubling down on the same bet.

## Model Diagnostics: We Show Our Work

Every day the platform measures whether each factor in the model has actually been predictive, and the readings below are published as-is — including when the answer is no. The information coefficient (IC) is the rank correlation between a factor's scores and stock returns over the following days. It ranges from −1 to +1; a value near 0 means the factor had no predictive relationship over that window.

## Why Combine Three Signals?

Redundancy

If one signal is unavailable, the other still works. No black box — each layer has a defined, transparent formula.

Independence

SAVE measures market perception; Innovation measures operational quality. They capture different things, so combining them adds real information.

Calibrated by Sector

Energy stocks get a lower SAVE weight (0.10) because sentiment is less predictive there. Biotech gets a higher Innovation alpha (0.25) because R&D is core.

## What Goes Into Each Layer

| Signal | Key Inputs | Source | Update Frequency |
|---|---|---|---|
| SAVE | Mention velocity, consumer and employee sentiment, news momentum, search trend | AlphaVantage + Google Trends | Live (7-day window) |
| Innovation | R&D/Revenue ratio, patent velocity, CapEx vs peers | SEC filings + AlphaVantage | Weekly batch |
| Fundamental | EPS, book value, FCF, revenue, dividends, growth | AlphaVantage (Supabase cached) | Daily |

## See combined valuations for any stock

All three layers applied instantly. Fair value + SAVE overlay + Innovation adjustment.

Start Free Trial — See combined valuations for any stock

## Per-Method Valuation Derivations

Every method in the consensus blend. Each entry shows the textbook formula, the inputs we use, the assumptions we make, the known limitations, and the sector weights that govern when it counts in the consensus.

### 1. P/E (Price-to-Earnings) Fair Value

Fair Value = TTM EPS × Sector P/E Multiple

**Inputs:** trailing-12-month earnings per share, sector default P/E multiple (Damodaran-anchored, recalibrated 2026-05 in Phase 45 BIAS-03). **Assumes** the earnings base is representative — fails on one-time charges, restructuring quarters, and pre-revenue companies. **Limit:** sector multiple is a mean, so it under-fits hyper-growth (NVDA-tier) and over-fits restructure (LSPD-tier) — the forward variant below is more reliable for non-mature names.

### 2. Forward P/E Fair Value

Forward EPS = analyst consensus next-year EPS (preferred), or TTM EPS × (1 + growth_yoy) Fair Value = Forward EPS × Sector P/E Multiple

Phase 45 D1 finding: forward methods were structurally missing from the screener batch. Wired in 2026-05-26 — every ticker in a forward-eligible sector now has this contribution. Analyst path is preferred (via yfinance forwardPE); falls back to a modelled forward EPS when consensus is unavailable.

### 3. P/B and Justified P/B

P/B Fair Value = Book Value Per Share × Sector P/B Multiple Justified P/B = BVPS × min(ROE / Cost of Equity, 30) — capped to prevent extreme outliers

P/B is the asset-side anchor. Justified P/B is the formula-based variant from Stowe et al. (CFA Curriculum L2): a stock's P/B should equal its ROE divided by its cost of equity. Both anchor banks, REITs, and asset-heavy industrials. Cost of equity uses CAPM with a**1.5 beta ceiling** (Phase 45 D2, Damodaran Investment Valuation 3e Ch 7) to prevent runaway discount rates on high-beta growth names.

### 4. P/S and Forward P/S

P/S Fair Value = Revenue Per Share × Sector P/S Multiple Forward P/S = RPS × (1 + revenue_growth_yoy) × Sector P/S Multiple

Useful when earnings are negative or distorted but revenue is real and recurring. Critical for SaaS, hyper-growth software, and any business model where the company is deliberately reinvesting profit (Amazon era, pre-FCF Tesla). Sector multiple recalibrated in Phase 45 BIAS-03 for Internet Platform + Communication Services.

### 5. EV/EBITDA and Forward EV/EBITDA

Fair Value = (EBITDA Per Share × Sector EV/EBITDA Multiple) − Net Debt Per Share Forward = (Forward Revenue × TTM EBITDA Margin × Sector Multiple) − Net Debt

Capital-structure neutral — strips out interest expense and depreciation, useful in cross-company comparisons where leverage and depreciation policies differ. Net debt conversion turns EV → Equity Value. Forward variant holds the TTM margin flat as a conservative no-expansion assumption. When the net-debt figure has not been observed, every enterprise-value method (EV/EBITDA, EV/EBIT, EV/Sales, EV/FCF, EPV, EVA) abstains rather than assuming zero debt, so a missing balance sheet never inflates a fair value.

### 6. DCF and Three-Stage DCF

Discount rate = rf + min(beta, 1.5) × ERP (CAPM with Phase 45 D2 beta cap) DCF Fair Value = Σ FCF_t / (1+r)^t + Terminal Value Three-Stage: high growth → linear deceleration → terminal perpetuity (Damodaran)

The intrinsic-value anchor. **Beta capped at 1.5** for CAPM — industry-standard practice (Damodaran Investment Valuation 3e Ch 7) — because uncapped raw beta on hyper-growth names (ARM β=3.41, TSLA β=2.2) produces 18-23% discount rates that pulverize future FCF. Three-stage handles transitional decay realistically; single-stage Gordon is a quick check.

### 7. DDM (Dividend Discount Model)

Fair Value = DPS × (1 + g) / (r − g) (Gordon Growth)

Values the stock as the present value of all future dividends. Only meaningful for established dividend payers (utilities, REITs, banks, mature consumer staples). Growth-sector weight vectors (Cloud Infrastructure, AI Platform, Biotechnology, EV Technology) carry no DDM weight at all — most companies there don't pay dividends — and DDM abstains for any company without one.

### 8. Graham Number

Graham = √(22.5 × EPS × BVPS) (Benjamin Graham, The Intelligent Investor)

Maximum price a defensive investor should pay. Very conservative; ignores growth. Useful as a floor-value sanity check on value names. Only a handful of sector weight vectors carry Graham — most growth-sector vectors (Software, Cloud Infrastructure, AI Platform, Biotechnology) exclude it entirely, because the formula is structurally too conservative for growth cohorts.

### 9. PEG Fair Value

PEG Fair Value = EPS × PEG Ratio × Growth Rate %

Peter Lynch's growth-adjusted P/E rule: a fairly valued stock has PEG ≈ 1 (P/E equals its growth rate). Growth rate capped at 35% to prevent geometric blow-ups on hyper-growth tail. PEG returns DataUnavailableError on zero/negative growth.

### 10. EPV (Earnings Power Value)

EPV = Normalized EBIT × (1 − tax rate) / Cost of Equity (Bruce Greenwald)

Assumes zero growth — "what is this company worth if it never grows again?" Conservative stress-test floor. Not a price target. The cross-method sanity filter at runtime (ratio FV / price within [0.15, 5.0]) excludes EPV outputs that fall outside that window from the consensus blend — Phase 45 D5 verified this already mitigates the "EPV drags growth names down" concern.

### 11. P/FCF + EV/FCF

P/FCF Fair Value = FCF Per Share × Sector P/FCF Multiple EV/FCF = (FCF/Share × Sector EV/FCF Multiple) − Net Debt/Share

FCF-based multiples for the cohorts where reported earnings are noisy (asset writedowns, deferred revenue swings) but cash conversion is strong (mature SaaS, dividend-yielders, tobacco, consumer staples).

### 12. EV/EBIT

Fair Value = (EBIT/Share × Sector EV/EBIT Multiple) − Net Debt/Share

More conservative than EV/EBITDA — includes depreciation and amortization as a real cost. Better for capital-intensive industries (homebuilders, freight, heavy machinery, steel).

### 13. FFO (Real Estate / Equity REITs)

FFO = Net Income + Depreciation & Amortization on real property (NAREIT standard) Fair Value = FFO × Sector P/FFO Multiple

For equity REITs, GAAP EPS understates earnings because non-cash D&A on real property is meaningless. FFO restates on a cash basis. Restricted to Real Estate / Tower REIT / Data Center REIT sectors.

### 14. EV/Sales

Fair Value = (Revenue/Share × Sector EV/Sales Multiple) − Net Debt/Share

Capital-structure-neutral revenue multiple. Useful for pre-profit names where P/S is meaningful but you want to net out cash and debt. Weighted lightly in most sectors as a tie-breaker.

### 15. Options-Implied Forward Price

F = K + e^(r·T) × (C − P) (put-call parity)

Backs out the market's implied forward price from live options chains (puts and calls at the same strike + expiry). No fundamental assumptions — pure real-time market consensus. Useful as a complementary signal to the fundamental methods above.

### 16. Reverse-DCF (Implied-Growth Lens) — coming Phase 50

Solve for g such that: Current Price = Σ FCF × (1+g)^t / (1+r)^t + Terminal

Instead of using the model's growth assumption to find fair value, solve for the growth rate the current market price implies. Displays "Market implies X% growth; the model assumes Y%" as a sanity check on every valuation. Implementation lands in Phase 50.

### 17. Residual Income (RI)

V₀ = BV₀ + Σ [RI_t / (1 + r_e)^t] + Gordon Terminal Value RI_t = (ROE_t − r_e) × BV_{t-1} BV_t = BV_{t-1} × (1 + ROE_t × retention) Terminal: RI_5 × (1 + g) / (r_e − g), capped when r_e − g < 2% → TV = 0

**Formula derivation (Ohlson, 1995):** The Residual Income model values equity as book value plus the present value of future excess returns — earnings above the cost of equity multiplied by the book value base. This is mathematically equivalent to the DCF model under clean surplus accounting, but far more stable for companies where free cash flow is volatile: banks, insurance, capital-intensive industrials, utilities, and mortgage REITs.

**Model structure:** A 5-year explicit stage uses trailing ROE linearly fading toward the cost of equity (competitive equilibrium assumption). Year-5 excess returns carry into a Gordon-growth terminal stage under these assumptions: g ≤ 2.5% and r_e − g ≥ 2% (perpetuity blow-up guard). Book value rolls forward each year using the retention ratio (1 − dividend payout). The model fair value is clamped to a 2.5× upper ceiling relative to current price.

**Sector applicability:** Strongest for Banks, Insurance, and Mortgage REITs, whose weight vectors give RI its largest consensus emphasis; moderate for capital-intensive Industrials, Utilities, and Energy; smallest for asset-light Technology and Software where intangibles dominate book value. (Weights are renormalised across the methods that fire, so the effective share varies by sector and data availability.) Returns no model estimate for negative book value (leveraged buybacks, accumulated losses) or when book equity is immaterial relative to market price.

**Limitations:** Assumes clean surplus accounting (no off-balance-sheet items distorting book value). Terminal RI = 0 is deliberately conservative — quality compounders with sustained excess returns will show a model fair value differential below intrinsic value under this assumption. ROE figures are trailing; forward-ROE forecasting is not yet incorporated.

## 80% Model Range — Inter-Model Dispersion Band (Phase 47)

Every per-method fair value and the consensus blend carry an 80% model range — an inter-model dispersion band that combines two uncertainty sources. It is not a statistical confidence interval about the stock's price, and not a forecast or expected range.

spread_A = IQR(per-method FVs) × 1.282 / 1.349 (cross-method disagreement) spread_B = consensus_fv × decile_multiplier × 0.05 (sector volatility) half_width = √(spread_A² + spread_B²) 80% interval = [consensus_fv − half_width, consensus_fv + half_width]

**spread_A** uses IQR (Q3 − Q1) — robust to DCF terminal-value tail outliers (which inflate standard deviation). The 1.282/1.349 conversion turns a normal-distribution IQR into a 80% z-score one-tail half-width.

**spread_B** uses sector volatility deciles calibrated 2026-05. Utilities and consumer staples → multiplier 1.0 (5% half-width per FV). EV Technology, Biotech, AI Platform → multiplier 3.0 (15% half-width). Default multiplier 1.5 for unlisted sectors.

**Edge cases and bounds:** per-method values outside 0.20×–5.0× of consensus_fv are excluded before spread_A is computed, so one mis-scaled method cannot drive the band. If only 1 method survives, spread_A falls back to 15% of consensus_fv. If half_width is below 2.5% of consensus_fv, it floors at 2.5% (zero uncertainty is not credible). A forensic earnings-quality multiplier can widen the band by up to 20% (never narrow it). The half-width is capped at 75% of consensus_fv, applied last, and fv_low clamps at 0.

## What We Never Claim

Equity Rank is **not a registered investment adviser** (federal or state). Per IAA §202(a)(11), FINRA, and SEC anti-fraud rules, we never use the following kinds of language and have an automated CI gate (Phase 46 LABEL-04) blocking it from any UI, email, or AI prompt:

- "buy" / "sell" as verbs directed at the reader — we use overweight / underweight / attractive / unattractive
- "you should", "we recommend", "our recommendation" — we use "the model surfaces" / "model output"
- "price target", "expected return", "upside potential" — we use "projected fair value range" / "model fair value differential"
- "will outperform", "guaranteed to", "beat the market", "generate alpha" — we describe relative model output, not forward returns
- "forecast horizon" — we use "model horizon"
- Firm-name comparisons (Bloomberg, Goldman, Morgan Stanley, JPMorgan) as quality claims

## Published Track Record

The published track record is temporarily unavailable. Check back shortly.

Educational Use Only — Not Financial Advice

All content, analysis, valuations, options strategies, AI-generated commentary, screener results, and other information provided by Equity Rank is for **informational and educational purposes only**. Nothing on this platform constitutes financial advice, investment advice, trading advice, or any other type of advice. Equity Rank is **not a registered investment adviser**, broker-dealer, or financial planner under any applicable law or regulation.

Valuation models, margin of safety percentages, fair value estimates, options strategy outputs, and AI analysis are **algorithmic outputs based on publicly available data** and do not represent personalized investment recommendations. All financial models contain assumptions that may be incorrect. Past performance of any security is not indicative of future results. You may lose money on any investment.

Every fair value figure on Equity Rank is our **model’s opinion of a company’s intrinsic worth under stated assumptions** — it is **not a prediction, forecast, or price target** for where the security will actually trade. Fair value estimates describe what the model considers a business to be worth today, not where its market price is headed. Actual market prices are set by supply and demand and by factors no model can fully capture, and may differ materially and indefinitely from any fair value shown here.

Always conduct your own independent due diligence. Consult a licensed financial advisor, tax professional, or attorney before making any investment or financial decision. By using Equity Rank, you acknowledge that you understand and accept these limitations. Portfolio model outputs are mathematical results of quantitative algorithms and do not represent investment recommendations.

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Methodology version: v2.0 (Phases 44–49 substantive ship)

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# Metrics Glossary
Source: https://www.equity-rank.com/glossary

Plain-English definitions for every field you see on Equity Rank — what each number measures and how to read it. Educational reference only; nothing here is investment advice.

## Strength & Scores

Fundamental Strength

Fundamental Strength grades how strong the underlying business is, independent of whether the stock looks cheap or expensive. It blends five fundamental pillars — Profitability, Financial Health, Earnings Quality, Capital Allocation, and Growth Durability — into a single 0–100 score and an A+ to F letter grade. Pillars with no available data are dropped and the rest re-weighted, so the grade always reflects real data rather than filled-in blanks.

How to read it: A higher grade means the business scores well across profitability, balance-sheet health, accounting quality, capital discipline, and durable growth. It is a measure of business quality, not a measure of whether the stock is cheap.

ER Score

The Equity Rank Score is our headline 0–100 composite. Unlike Fundamental Strength, it deliberately blends business quality WITH valuation cheapness, momentum, innovation exposure, and macro positioning, using weights tuned per sector. Quality gates prevent low-confidence or low-quality names from scoring highly.

How to read it: A higher score reflects a more favorable overall standing across all model pillars combined. It is informational and is not a recommendation to take any action.

Model Confidence

Model Confidence reflects how much trust to place in the valuation outputs. It rises when multiple valuation methods agree, the underlying data is complete and high-quality, and the best-fit method is well-suited to the company. It falls for thin data or wide disagreement between methods.

How to read it: Higher means the fair-value estimate rests on fuller, more consistent inputs. Lower means treat the estimate with extra caution.

## Valuation

Model Fair Value

The model fair value blends the outputs of many independent valuation methods (P/E, P/B, P/S, EV/EBITDA, discounted cash flow, Graham number, and others) into a single trailing-twelve-month estimate. It is a current-snapshot model estimate of intrinsic value — not a forward projection of future trading levels.

How to read it: Comparing price to the model fair value gives the Margin of Safety. It is informational and not a recommendation.

MoS%

Margin of Safety expresses the gap between the model fair value and the current price as a percentage. A positive value means the price is below the model fair-value estimate; a negative value means it is above. It is a current-snapshot measure on a trailing-twelve-month basis, not a forward projection.

How to read it: Positive = price below the model estimate; negative = price above it. Informational only.

Combined MoS%

A variant of Margin of Safety calculated against the combined SAVE + Innovation fair-value estimate, which overlays sentiment and innovation signals onto the core valuation. Current-snapshot, trailing-twelve-month basis.

P/E

The trailing P/E ratio divides the share price by earnings per share over the last twelve months. It shows how much investors are paying for each dollar of recent earnings. "N/M" (not meaningful) appears when earnings are negligible or negative.

How to read it: A lower P/E means a lower price per dollar of trailing earnings; appropriate ranges vary widely by sector and growth rate.

Fwd P/E

The forward P/E divides the share price by the consensus estimate of next year’s earnings per share. It reflects expectations rather than reported results and depends on the accuracy of analyst estimates.

P/B

The price-to-book ratio compares the share price to the company’s book value (assets minus liabilities) per share. It is most informative for asset-heavy businesses such as banks and is less meaningful for asset-light or intangible-heavy firms.

EV/EBITDA

EV/EBITDA divides enterprise value (market cap plus net debt) by earnings before interest, taxes, depreciation, and amortization. Because it includes debt and ignores financing/tax differences, it allows comparison across companies with different capital structures.

PEG

The PEG ratio divides the P/E by the expected earnings growth rate, putting valuation in the context of growth. It helps compare companies growing at different speeds.

P/S

The price-to-sales ratio divides market value by revenue. It is useful for companies with little or no profit, where earnings-based multiples are not meaningful.

## Profitability

Profitability

The Profitability pillar combines return on equity, return on invested capital, net/operating/gross margins, free-cash-flow yield, and gross profitability. Together they describe how much profit and cash the business generates relative to its sales and the capital it employs.

ROE

Return on equity measures net income relative to shareholders’ equity — how much profit the company generates from the money shareholders have invested. Very high ROE can sometimes reflect heavy leverage rather than operating strength.

How to read it: Higher generally indicates more profit generated per dollar of equity.

ROA

Return on assets measures how efficiently a company turns its total asset base into profit, regardless of how those assets are financed.

ROIC

ROIC measures the after-tax return the business earns on all the capital (debt and equity) invested in operations. Compared against the cost of capital, it shows whether the company creates or destroys value.

How to read it: Higher means the business earns more on each dollar of capital it employs.

Net Margin

Net margin is the share of each dollar of revenue that remains as net profit after all expenses, interest, and taxes.

Operating Margin

Operating margin measures profit from core operations as a share of revenue, before interest and taxes. It isolates operating efficiency from financing and tax effects.

Gross Margin

Gross margin is the share of revenue left after the direct cost of producing goods or services. Higher gross margins often indicate pricing power or a differentiated product, though typical levels vary greatly by industry.

FCF Yield

Free-cash-flow yield expresses the cash a business generates (after capital spending) as a percentage of its market value. It shows how much actual cash the business produces relative to its price.

Rule of 40

The Rule of 40 is a software-industry convention: add the revenue growth rate to the free-cash-flow margin. The idea is that software businesses trade growth against profitability, and the SUM captures the balance — a company can score 40 by growing fast at break-even or growing slowly with rich margins. A combined reading above 40 meets the conventional industry benchmark for software businesses. Equity Rank computes it for software-sector stocks only and displays it for context; it is informational and is never an input to the fair value blend.

How to read it: Higher combined readings are conventionally associated with the industry benchmark; the 40 threshold is a rule of thumb, not a conclusion about any individual security.

## Financial Health

Financial Health

The Financial Health pillar combines the Piotroski F-Score, leverage (debt-to-equity), and an estimated distress probability. It describes how resilient the balance sheet is and how comfortably the company can service its obligations.

Piotroski F-Score

The Piotroski F-Score (Piotroski, 2000) awards one point each for nine fundamental tests across profitability, balance-sheet leverage/liquidity, and operating efficiency, for a total of 0–9. It is a widely used quick read of fundamental health.

How to read it: Higher (closer to 9) indicates more of the financial-health checks are passing.

Debt/Equity

The debt-to-equity ratio compares total debt to shareholders’ equity. It shows how much the company relies on borrowing relative to equity financing. Acceptable levels vary widely by industry.

How to read it: Lower generally indicates a more conservatively financed balance sheet.

Interest Coverage

Interest coverage divides trailing-twelve-month operating profit (EBIT) by interest expense. Unlike EV/EBITDA it does not add depreciation back, which matters for asset-heavy businesses where depreciation is a genuine recurring cost rather than an accounting artifact. A reading below 1.0x means trailing operating profit did not cover the interest bill. No value is shown when interest expense is absent or zero — that is unknown coverage, not strong coverage.

How to read it: Higher indicates more operating profit available to service debt.

Distress Probability

Distress probability converts the Ohlson O-Score (Ohlson, 1980) — a bankruptcy-prediction model — into an estimated likelihood of financial distress over roughly two years. It is not calculated for banks, insurers, and REITs, where the model does not apply.

How to read it: Lower indicates less estimated distress risk based on the model’s inputs.

## Earnings Quality

Earnings Quality

The Earnings Quality pillar combines the Beneish M-Score, accruals, cash-conversion ratio, receivables quality, and earnings-surprise consistency. It flags whether reported profits are well-supported by cash flow and conservative accounting, versus relying on aggressive estimates.

Cash Conversion

The cash-conversion ratio divides operating cash flow by net income. A ratio near or above 1.0 indicates earnings are well-backed by cash; persistently low ratios can signal earnings that rely on non-cash accruals.

Beneish M-Score

The Beneish M-Score (Beneish, 1999) combines eight financial ratios into a single number that estimates the likelihood of earnings manipulation. Readings above roughly −1.78 are commonly treated as a flag for further scrutiny. It is a screening signal, not a determination of wrongdoing.

How to read it: More negative readings indicate accounting that looks less likely to be manipulated.

## Capital Allocation

Capital Allocation

The Capital Allocation pillar combines economic spread (returns above the cost of capital), total shareholder yield, share issuance/dilution, and an overall capital-allocation composite. It describes how productively management invests and whether capital is returned without excessive dilution.

Economic Spread

Economic spread is ROIC minus the cost of equity capital. A positive spread means the business earns more than its capital costs (value creation); a negative spread means the opposite.

Shareholder Yield

Total shareholder yield captures all the ways cash is returned to (or raised from) shareholders: dividends plus net share buybacks minus net debt issuance, relative to market value. A negative figure indicates a net issuer of stock or debt.

Capital Allocation Score

The capital-allocation score combines economic spread, the sustainable growth rate, and the trend in goodwill (a proxy for acquisition discipline) into a 0–100 read of management’s capital stewardship.

## Growth

Growth Durability

The Growth Durability pillar combines revenue growth, 3-year free-cash-flow CAGR, the multi-year trend in return on equity, and the multi-year change in gross margin. It describes whether the business is sustaining and broadening its growth rather than relying on one-off jumps.

Rev Growth

Revenue growth measures the year-over-year change in sales, showing how quickly the top line is expanding or contracting.

FCF 3yr CAGR

The 3-year free-cash-flow CAGR measures the compound annual growth rate of free cash flow over three years. It is left blank when an endpoint is non-positive, since a growth rate is undefined for a sign-flipping series.

ROE 3yr Δ/yr

This is the linear slope of return on equity over three years, expressed in percentage points per year. A positive value indicates ROE has been expanding; negative indicates contraction. Informational trend signal only.

GM Δ 3yr

This is the end-to-end change in gross margin over three years, in percentage points. Positive values indicate margin expansion; negative values indicate compression. Informational trend signal only.

## Risk & Market

Fundamentals Δ30d

The change in the Fundamentals Score (a 0–100 score built from value, growth, quality and financial stability, with a small weight on price trend) over the last 30 days. Larger positive values indicate improving fundamentals. Informational only.

Risk

The risk score summarizes a stock’s market sensitivity (beta) and price volatility into a 0–100 scale, where higher means more volatile/sensitive. It is labeled Low, Mid, or High.

Beta

Beta measures one thing: how much a stock’s past returns moved together with the broad market — its sensitivity to market-wide moves. A beta of 1.0 means it tended to move with the market; above 1.0 means it amplified market swings; below 1.0 means it dampened them; a negative beta means it tended to move opposite the market. Three common misreadings to avoid: (1) Beta is backward-looking — it is estimated from historical returns and can drift over time, so it is not a forecast. (2) It captures only market-linked (systematic) movement, not company-specific risk, business quality, or valuation — a stock can be very volatile on its own yet still carry a low beta if that volatility is unrelated to the market. (3) A high beta is not inherently “bad” and a low beta is not inherently “safe”; beta describes direction-of-move relative to the market, nothing more. It says nothing about whether a stock is cheap, expensive, or how its price will move next.

How to read it: A higher beta means the stock has historically magnified the market’s up-and-down moves; a lower beta means it moved less than the market. It describes co-movement with the market — not how risky the company is overall, and not a prediction of returns.

Mkt Cap

Market capitalization is the total market value of a company’s equity, calculated as share price multiplied by shares outstanding.

Dividend Yield

Dividend yield expresses the annual dividend as a percentage of the current share price — the income return from dividends alone.

AI Impact

The AI impact score estimates how artificial-intelligence trends may affect the company’s revenue model, on a 0–100 scale where lower indicates a likely beneficiary and higher indicates a likely headwind. It is a directional research signal, informational only.

## Options & Derivatives

Delta

Delta has two common readings. First, it approximates how much the option’s price changes for a $1 change in the underlying stock — a 0.30-delta call gains roughly $0.30 per $1 rally, before other effects. Second, its absolute value is widely used as a rough, market-implied probability that the option expires in the money: a 0.30-delta option carries roughly a 30% implied chance of finishing in the money under the pricing model’s assumptions. Both readings are approximations of the same underlying math, not guarantees.

Gamma

Gamma measures how much an option’s delta shifts for a $1 move in the underlying. High gamma means delta — and therefore the position’s directional exposure — changes quickly, so the option accelerates into and out of the money fast. Gamma is largest for at-the-money options and rises sharply as expiration approaches; deep in- or out-of-the-money options carry little gamma.

How to read it: High gamma means the position’s exposure can swing quickly on small stock moves — most pronounced near the strike and close to expiration.

Theta

Theta is the option’s time decay: the premium it tends to lose for each day that passes, holding the stock price and volatility constant. A long option has negative theta — time works against it — while a short option position has positive theta. Theta is concentrated in the extrinsic (time-value) portion of the premium and accelerates as expiration nears, especially for at-the-money options.

How to read it: A −0.05 theta means the option tends to shed about $0.05 of value per day from time alone; that decay speeds up close to expiration.

Vega

Vega measures sensitivity to implied volatility: the change in an option’s price for a 1 percentage-point change in IV, with all else held constant. Both calls and puts gain value when implied volatility rises and lose value when it falls. Vega is largest for at-the-money options with more time to expiration and shrinks as expiration approaches.

How to read it: A vega of 0.10 means the option’s price tends to move about $0.10 for each 1-point change in implied volatility.

Rho

Rho measures sensitivity to interest rates: the change in an option’s price for a 1 percentage-point change in the risk-free rate, all else equal. Calls generally gain value as rates rise and puts generally lose value. Rho is the smallest of the major Greeks for short-dated options and matters most for long-dated contracts such as LEAPS.

Call Option

A call option gives its holder the right, but not the obligation, to buy 100 shares of the underlying at the strike price on or before expiration. The buyer pays a premium for that right; the seller (writer) receives the premium and takes on the obligation to deliver shares if assigned. A call’s value rises as the underlying moves above the strike. One standard contract represents 100 shares.

Put Option

A put option gives its holder the right, but not the obligation, to sell 100 shares of the underlying at the strike price on or before expiration. The buyer pays a premium and gains value as the underlying falls below the strike; the seller receives the premium and is obligated to buy shares at the strike if assigned. Puts are commonly used for downside protection or to profit from a decline in the underlying’s price. One standard contract represents 100 shares.

Strike Price

The strike price is the predetermined price at which the option can be exercised — where a call holder may buy, or a put holder may sell, the underlying. The relationship between the strike and the current stock price determines an option’s moneyness and how much of its premium is intrinsic value versus time value.

Premium

The premium is the market price of the option itself — what the buyer pays and the seller collects. It is quoted per share, so a premium of $1.50 costs $150 for one standard 100-share contract. Premium is the sum of intrinsic value (the in-the-money amount, if any) and extrinsic value (time and volatility value).

Days to Expiration (DTE)

Days to expiration (DTE) counts the calendar days left until the option expires and ceases to exist. Shorter DTE means faster time decay (theta) and higher gamma, so near-dated options are more sensitive to both the passage of time and short-term price moves. At expiration, an in-the-money option is typically exercised or settled and an out-of-the-money option expires worthless.

Intrinsic Value

Intrinsic value is the amount by which an option is in the money. For a call it equals the stock price minus the strike (when positive); for a put, the strike minus the stock price (when positive). It can never be negative — an out-of-the-money option has zero intrinsic value, and its premium is entirely time value.

Extrinsic (Time) Value

Extrinsic value, also called time value, is the premium remaining after subtracting intrinsic value. It reflects the chance the option gains intrinsic value before expiration, driven mainly by the time remaining and implied volatility. Extrinsic value decays toward zero as expiration approaches (theta) and shrinks when implied volatility falls.

Moneyness (ITM / ATM / OTM)

Moneyness describes the strike’s relationship to the current stock price. A call is in-the-money (ITM) when the stock is above the strike, at-the-money (ATM) when they are roughly equal, and out-of-the-money (OTM) when the stock is below the strike; for puts the directions reverse. ITM options carry intrinsic value; ATM and OTM options are pure time value. Moneyness shapes an option’s delta, gamma, and risk profile.

Exercise

Exercise is the act of using an option’s right: a call holder buys, and a put holder sells, 100 shares at the strike price. American-style options can be exercised any time before expiration; European-style only at expiration. Most options are closed by trading rather than exercised, but in-the-money options are typically exercised automatically at expiration.

Assignment

Assignment is the flip side of exercise: when a holder exercises, a short option is assigned and the seller must meet the obligation — delivering 100 shares at the strike (assigned call) or buying 100 shares at the strike (assigned put). Assignment can occur any time for American-style options, most often when an option is deep in the money or near expiration. It is the key risk for option sellers to plan around.

Implied Volatility (IV)

Implied volatility is the volatility figure that, fed into an option pricing model, reproduces the option’s current market price. It reflects the market’s collective expectation of how much the underlying will move over the option’s life, annualized. Higher IV raises option premiums for both calls and puts; IV often climbs into earnings and other known events and falls afterward (an “IV crush”). IV is an expectation of magnitude, not a forecast of direction.

How to read it: Higher IV means richer premiums and a wider expected range; it tends to spike before scheduled events and collapse once the uncertainty resolves.

IV Rank

IV Rank places the current implied volatility within its own one-year range: 0 means IV is at its 52-week low, 100 means its 52-week high, and 50 means halfway between. It answers “is volatility high or low for this stock right now?” relative to its own history, which is more comparable across names than the raw IV number. Premium-selling approaches tend to favor a higher IV rank; premium-buying the opposite.

How to read it: An IV rank of 80 means IV is near the top of its past-year range — option premiums are relatively rich for this stock by its own standard.

IV Percentile

IV Percentile is the percentage of trading days over the past year that implied volatility closed below today’s level. An IV percentile of 70 means IV was lower than now on 70% of the past year’s days. It is a close cousin of IV Rank but less sensitive to a single extreme spike, because it counts days rather than measuring distance to the range’s endpoints.

Implied Move

The implied move is derived from at-the-money option prices: implied volatility × √(days ÷ 365) × stock price. It represents a one-standard-deviation range — under the pricing model’s distributional assumptions, a stock has historically stayed inside ±1 implied move roughly two-thirds of the time and exceeded it roughly one-third of the time. It is a market-implied magnitude, not a direction and not a limit.

Probability of Profit (PoP)

Probability of profit (PoP) estimates the likelihood that a position finishes at or above its breakeven at expiration, derived from the option pricing model’s distribution of outcomes. It is evaluated at the breakeven rather than at the strike, so it reads higher than the chance the option simply expires worthless — the premium received is part of the profitable region. Selling options generally shows a higher PoP paired with a smaller maximum gain and a larger potential loss; buying options the reverse. The distribution is a zero-drift curve with a fatter left tail than a lognormal, calibrated on long-run SPY returns, so downside-exposed positions score lower than plain Black-Scholes math would give them. PoP is a model estimate under constant-volatility assumptions — not a guarantee, and real outcomes can differ.

How to read it: A 70% PoP means the model assigns roughly a 70% chance of the position being profitable at expiration — typically alongside a capped gain and a larger possible loss.

Open Interest

Open interest counts the outstanding option contracts that remain open — neither closed out, exercised, nor expired — for a specific strike and expiration. Unlike volume, which resets every day, open interest accumulates and reflects how much live positioning exists. Higher open interest generally signals deeper liquidity and tighter bid-ask spreads, making a contract easier to enter and exit.

Bid-Ask Spread

The bid-ask spread is the difference between the best bid and best ask for an option. It is an immediate cost of trading: enter at the ask, exit at the bid, and the spread is lost to friction. Tight spreads indicate liquid, actively quoted contracts; wide spreads — common in low-volume or far-dated options — raise the cost of getting in and out and make fair-value execution harder.

Breakeven

The breakeven is the stock price at expiration at which a position’s profit is exactly zero. For a long call it is the strike plus the premium paid; for a long put, the strike minus the premium. Multi-leg strategies can have one or two breakevens that bound their profit zone. Comparing the breakeven to the current price shows how far the underlying must move for the position to pay off.

Max Profit

Maximum profit is the most a position can make, set by its structure. A long call’s max profit is theoretically unlimited; a long put’s is capped at the strike minus premium (the stock can only fall to zero). Defined-risk spreads such as verticals and iron condors cap max profit at the net premium or the spread width minus cost. Knowing max profit up front frames the reward side of a trade’s reward-to-risk.

Max Loss

Maximum loss is the most a position can lose, set by its structure. A long option’s max loss is limited to the premium paid. A defined-risk spread caps loss at the spread width minus the net credit. Some short positions — such as a naked call — carry theoretically unlimited loss, while a cash-secured put’s loss runs down to the strike minus premium (if the stock goes to zero). Knowing max loss before entering is the foundation of position sizing and risk control.

How to read it: Defined-risk structures let you know the worst case in advance; naked short options can lose far more than the premium collected.

Covered Call

A covered call pairs 100 shares of stock with one short call at a higher strike. The premium collected adds income and lowers the effective cost basis, while the short call caps gains above the strike — if the stock rises past it, the shares may be called away (assigned). It is a common income approach on shares already held; the main trade-off is forgone upside in a strong rally.

Cash-Secured Put

A cash-secured put is a short put fully backed by cash equal to the strike × 100. The seller collects premium and agrees to buy 100 shares at the strike if assigned. If the stock stays above the strike, the put expires and the premium is kept; if it falls below, the shares are bought at the strike, with the premium lowering the effective cost basis. It is the entry leg of the wheel strategy.

Vertical Spread

A vertical spread combines a long and a short option of the same type (both calls or both puts) and expiration, at different strikes. The short leg partly funds the long leg, which caps both the maximum profit and maximum loss — a defined-risk structure. Examples include the bull call and bull put spreads (positioned for an upward move) and bear call and bear put spreads (positioned for a downward move). Verticals trade away some upside for lower cost and bounded risk.

Iron Condor

An iron condor sells an out-of-the-money put spread and an out-of-the-money call spread on the same underlying and expiration, collecting premium from both. It profits when the stock stays between the two short strikes through expiration and reaches max loss if the stock breaks outside either spread. It is a defined-risk, range-bound approach that benefits from time decay and falling volatility.

Straddle

A straddle holds a call and a put at the same strike and expiration. A long straddle profits from a large move in either direction, with losses limited to the combined premium if the stock sits still; it needs a move bigger than the total premium to pay off and is hurt by time decay and falling IV. It is a volatility position — the bet is on magnitude, not direction.

Strangle

A strangle holds an out-of-the-money call and an out-of-the-money put at different strikes, same expiration. It costs less than a straddle because both legs start out of the money, but the stock must move further before the position profits. Like a straddle, a long strangle is a position on the magnitude of a move rather than its direction and is hurt by time decay and falling implied volatility.

Equity Rank provides research information and is not a registered investment adviser. The metrics described here are informational and do not constitute investment advice or a recommendation regarding any security.

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# Frequently asked questions
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The Fundamentals Score is a 0–100 score built from value, growth, quality and financial stability, with a small weight on price trend. SAVE is a separate AI sentiment overlay that reads public web commentary and is not part of this score. A higher score may correspond to potential undervaluation relative to fair value estimates. It is a research signal, not a guarantee of future performance.

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## Data & Analysis

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# Equity Rank for AI assistants and developers
Source: https://www.equity-rank.com/developers

Equity Rank recomputes 8–15 valuation models for roughly 3,000+ U.S.-listed securities after every market close. Machines can read the result two ways: an **MCP server** that AI assistants call at answer time, and **public JSON endpoints** for anything else. Neither needs an account or a key.

## MCP server

The Model Context Protocol is the open standard AI assistants use to call external tools. Equity Rank's server speaks the Streamable HTTP transport, stateless, with no authentication:

https://api.equity-rank.com/mcp

Once connected, the assistant can look up a security and quote the live figure with a link to its Equity Rank page. Four read-only tools:

| Tool | What it returns |
|---|---|
| `search` | Resolve a ticker or company name to securities in the coverage universe (up to 10 matches, each with its page URL). |
| `fetch` | A readable valuation summary for one ticker — price, model fair value estimate, margin-of-safety differential, method agreement, Fundamental Strength, next earnings, last-updated stamp — with structured metadata and the source URL. |
| `get_stock_valuation` | Structured public payload for one ticker (identical to GET /api/stocks/{TICKER}/public). |
| `list_sector_stocks` | The public sector index: top scored securities in a sector, ranked by Equity Rank Score, public-safe fields only. |

`search` and `fetch` follow the connector contract ChatGPT requires, so the same server works in every client. Rate limit: 120 requests per minute per IP.

### Claude (claude.ai)

Settings → Connectors → Add custom connector. Name it Equity Rank, paste the URL above, leave the OAuth fields empty. Then enable it in a chat from the tools menu.

### Claude Code

claude mcp add --transport http equity-rank https://api.equity-rank.com/mcp

### ChatGPT

Settings → Connectors → Advanced → enable Developer mode → Create. Paste the URL, choose No authentication, and save. Select the connector in a new chat.

### Cursor and other MCP clients

{ "mcpServers": { "equity-rank": { "url": "https://api.equity-rank.com/mcp" } } }

### VS Code (Copilot agent mode)

Add to `.vscode/mcp.json` in the workspace, or to the user settings under the same key:

{ "servers": { "equity-rank": { "type": "http", "url": "https://api.equity-rank.com/mcp" } } }

### Windsurf

In `~/.codeium/windsurf/mcp_config.json`:

{ "mcpServers": { "equity-rank": { "serverUrl": "https://api.equity-rank.com/mcp" } } }

### Codex CLI

In `~/.codex/config.toml`:

[mcp_servers.equity-rank] url = "https://api.equity-rank.com/mcp"

### Gemini CLI

In `~/.gemini/settings.json`:

{ "mcpServers": { "equity-rank": { "httpUrl": "https://api.equity-rank.com/mcp" } } }

### Clients that only launch local (stdio) servers

Zed and older clients start a local process rather than opening a URL. Any stdio-to-HTTP relay works; the community `mcp-remote` package needs no configuration:

{ "mcpServers": { "equity-rank": { "command": "npx", "args": ["-y", "mcp-remote", "https://api.equity-rank.com/mcp"] } } }

### Claude Desktop one-click bundle

Where custom connectors are not available, download equity-rank.mcpb and open it with Claude Desktop. The bundle holds a dependency-free local bridge that relays to the URL above; nothing is stored and no key is needed.

### ChatGPT without Developer mode

Search the GPT Store for "Equity Rank". Its Actions read the public endpoints through the OpenAPI document below, which any agent framework can also import:

https://api.equity-rank.com/openapi-public.json

## Public JSON endpoints

One security — the payload every MCP tool builds on:

GET https://api.equity-rank.com/api/stocks/{TICKER}/public

Fields include `company_name`, `sector`, `price`, `consensus_fair_value` (the blended model estimate), `mos_pct` (margin-of-safety differential, %), `method_agreement_above` / `_below` / `_total`, `fundamental_strength_score` / `_grade`, `next_earnings_date` / `_eps_estimate`, and `last_updated`. A ticker outside the coverage universe returns HTTP 404 — there are no placeholder rows.

A sector's top scored securities, public-safe fields only:

GET https://api.equity-rank.com/api/screener/sector/{sector}

Sectors: technology, healthcare, financials, consumer discretionary, consumer staples, industrials, energy, materials, real estate, utilities, communication services. Every ticker in coverage is listed at `GET https://api.equity-rank.com/api/stocks-index`.

### Markdown pages

Every stock page has a markdown form, the least-noise version to quote from, with each figure's qualifier inline:

GET https://www.equity-rank.com/stocks/{TICKER}.md

The same document is returned for `https://www.equity-rank.com/stocks/{TICKER}` when the request sends `Accept: text/markdown`. The reference pages are bundled into one file for single-fetch readers at /llms-full.txt.

## Bulk dataset

The whole public table as one file, one row per covered security, rebuilt after every market close. Same fields as the per-security endpoint, minus the live quote: the price column is the close the batch valued against, and the column names carry the qualifiers.

GET https://api.equity-rank.com/api/datasets/valuations-latest.csv GET https://api.equity-rank.com/api/datasets/valuations-latest.json

Columns: `ticker`, `company_name`, `sector`, `price_at_last_recompute`, `model_fair_value_estimate`, `margin_of_safety_differential_pct`, `models_above_price` / `models_below_price` / `models_total`, `fundamental_strength_score` / `_grade`, `equity_rank_score`, `market_cap`, `last_recomputed`. The JSON form carries a `meta` block with the column dictionary, the batch timestamp and the terms; `GET https://api.equity-rank.com/api/datasets` returns that block alone. Responses carry an `ETag` and `Last-Modified`, so a daily fetch with `If-None-Match` costs nothing when the batch has not run.

Free to use with attribution to Equity Rank and a link back, under the terms of service. Every value is a model estimate under stated assumptions; the citation rules below apply to the file exactly as they do to a page.

## How to quote a figure

Equity Rank's public data may be quoted with attribution to "Equity Rank" and a link to the source URL. These qualifiers are part of the claim and travel with any number:

- **Fair value is a model estimate** under stated assumptions — not a target price, not a prediction, not a recommendation.
- **Margin of safety** is the percentage differential between the model estimate and the current price. It describes model output; it does not predict returns.
- **Method agreement** ("N of M models place fair value above the current price") describes dispersion among models, not confidence in an outcome.
- **Carry the date.** Figures are recomputed nightly; every payload includes `last_updated`.

The same guidance is published for crawlers at /llms.txt, and the MCP server sends it to every connected assistant as its instructions. Method definitions are on the methodology page and in the glossary.

## Terms of use

Equity Rank is operated by Leek Ventures LLC, which is not a registered investment adviser, broker-dealer, or financial planner. Everything the endpoints return is algorithmic model output for informational and educational purposes — not investment advice and not a forecast of results. Inputs come from third-party market-data providers and company filings; model logic and scores are Equity Rank's own. Access is rate limited, provided as-is, and subject to the terms of service. For higher limits or questions: support@equity-rank.com.

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