Stock Analysis Cheat Sheet

Prepared for Fracto

August 2026 Edition

Valuation Metrics

Metric	What It Measures	Target Range
P/E Ratio	Price vs earnings	10–20× val; 20–30× grw
Forward P/E	Future earnings est.	Compare vs sector avg
PEG Ratio	P/E adj. for growth	<1 underval; >2 pricey
P/B Ratio	Price vs book value	<1.5 val; varies sector
P/S Ratio	Price vs revenue	<2 val; <10 growth
EV/EBITDA	Enterprise val effic.	<10 val; <20 growth
EV/FCF	Free cash flow basis	<20 attractive
Div Yield	Income return	>2% inc; chk payout

Profitability & Quality

Metric	What It Measures	Target Range
Gross Margin	Revenue after COGS	>40% strong moat
Net Margin	Bottom-line profit	>15% excellent
Op. Margin	Core biz efficiency	>20% strong
ROE	Return on equity	>15% good; >20% exc
ROA	Return on assets	>10% efficient
ROIC	Capital alloc quality	>10%; cmp vs WACC
FCF Margin	Cash conversion	>10% healthy

Balance Sheet Health

Metric	What It Measures	Target Range
Debt/Equity	Leverage level	<0.5 cons; <2 ok
Current Ratio	Short-term liquidity	>1.5 comfortable
Int. Coverage	Can it service debt?	>5× safe
Cash & Equiv.	Buffer / runway	≥1yr of op. expenses

The 4 Key Questions

🔍 Do I UNDERSTAND the business?

Circle of competence — can you explain the value chain in 2 minutes?

🏰 Does it have a MOAT?

Durable competitive advantage — brand, network effects, switching costs, cost advantage, IP/patents

👔 Is MANAGEMENT trustworthy?

Skin in the game, capital allocation history, insider ownership >5%, low dilution

💰 Is the PRICE right?

Margin of safety ≥20–30%, DCF intrinsic value, compare to historical multiples

ALL 4 YES = Strong Buy │ 3 YES = Watch List │ <3 = Pass

Growth Indicators

Metric	What It Measures	Target Range
Rev. Growth	YoY & 3yr CAGR	>10% healthy; >20% hi
EPS Growth	Earnings/share trend	Accelerating = bullish
FCF Growth	Cash gen. trend	Must grow w/ earnings
TAM	Room to grow	Large + underserved
Mkt Share	Gaining or losing?	Growing in large TAM

Red Flags ⚠️

Declining revenue with rising stock price

Consistent negative free cash flow

High & rising debt with slowing growth

Excessive stock dilution (>3% annually)

CEO / insiders selling large blocks

Goodwill >40% of total assets (acq-heavy)

Earnings growth driven only by buybacks

Auditor changes or financial restatements

Key Formulas

P/EPrice ÷ EPS

PEGP/E ÷ EPS Growth %

EVMktCap + Debt − Cash

ROICNOPAT ÷ Invested Cap

FCFOpCF − CapEx

DCF ValueΣ FCF/(1+r)^n + TV

Margin of Safety(IV − Price) ÷ IV

Moat Types Checklist

①Brand Power — pricing power, top-of-mind recall

②Network Effects — value grows with each user

③Switching Costs — painful to leave (data lock-in)

④Cost Advantage — scale, process, or location edge

⑤IP / Patents — legal barriers to competition

Quick Signal Guide

Deep Value P/E <12, P/B <1, D/Y >3%

GARP PEG <1.5, ROE >15%

Quality Growth ROIC >15%, Rev >20% YoY

Dividend Compounder D/Y >2%, Payout <60%

Turnaround Improving margins, FCF+

Where to Find Data

SEC Filings — 10-K, 10-Q, proxy (DEF 14A)

Earnings Calls — transcripts + Q&A tone

Screeners — Finviz, Koyfin, TradingView

Benchmarking — peer comparison via sector

Insider Txns — OpenInsider, SEC Form 4

Pre-Buy Checklist

Read last 2 annual reports Check 10-K risk factors Review earnings call transcripts Compare vs 2+ competitors Run a simple DCF Know your exit thesis Position size <5% unless high conviction