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Stock Valuation Models - Professional Investment Analysis Tool

📊 Overview

Stock Valuation Models is a comprehensive financial analysis indicator that combines multiple valuation methodologies to calculate intrinsic stock value. This professional-grade tool implements 7 different valuation methods, risk assessment framework, and financial health metrics to provide data-driven investment decisions.

🎯 Key Features

📈 Multiple Valuation Methods

Graham's Valuation - Conservative asset-based approach by Benjamin Graham
Multiples Valuation - Market-based P/E and P/B ratios from sector peers
Discounted Cash Flow (DCF) - Future cash flow projections with present value calculation
Dividend Discount Model - Gordon Growth Model for dividend-paying stocks
FCFF Model - Enterprise-level Free Cash Flow to Firm analysis
EVA Model - Economic Value Added measurement above cost of capital
Advanced Multiples - Enterprise Value ratios (EV/EBITDA, EV/Sales)

🏥 Financial Health Metrics

Altman Z-Score - Bankruptcy prediction and financial distress assessment
Piotroski F-Score - 9-point fundamental strength evaluation
Beneish M-Score - Earnings manipulation detection system
Magic Formula - Joel Greenblatt's combined quality and value scoring

⚖️ Risk Assessment Framework

Multi-Factor Risk Scoring - Fundamental, market, quality, and data quality risks
Risk-Adjusted Margin of Safety - Dynamic safety thresholds based on risk level
Position Sizing Guidance - Risk-appropriate investment allocation recommendations

🔍 Data Quality System

Real-Time Quality Tracking - Visual warnings for insufficient data
Fallback Methodology - Alternative calculations when primary data unavailable
Confidence Scoring - Method agreement and data quality assessment

⚙️ Settings & Parameters

Main Settings

Margin of Safety (%) - Minimum discount required before buying (Default: 15%)
Table Font Size - Choose between "Small" and "Normal" text size

Valuation Methods

Graham's Valuation - Best for mature, stable companies with strong fundamentals
Multiples Valuation - Compares to industry peers using dynamic sector ratios
Discounted Cash Flow - Ideal for growth companies with predictable cash flows
Dividend Discount Model - For consistent dividend-paying stocks (disabled by default)
FCFF Model - Enterprise approach for leveraged companies and M&A analysis
EVA Model - Measures value creation above cost of capital
Advanced Multiples - Wall Street standard EV ratios for professional analysis

Additional Metrics

Magic Formula - Combined quality and value scoring system
Altman Z-Score - Bankruptcy risk assessment (Safe >2.99, Distress <1.81)
Piotroski F-Score - Fundamental quality score (Excellent ≥8, Poor <4)
Beneish M-Score - Manipulation detector (High Risk >-2.22, Low Risk ≤-2.22)

🔧 How It Works

Dynamic Calculations

Sector-Based Ratios - Automatically detects company sector and applies appropriate valuation multiples
Economic Integration - Uses real-time risk-free rates, VIX volatility, and GDP growth data
Quality Weighting - Adjusts method weights based on company type (growth/mature/distressed) and market conditions
Negative Value Handling - Shows actual calculated values but excludes negative results from weighted average

Risk-Adjusted Analysis

VIX Integration - Higher market volatility increases required margin of safety
Sector Risk Premiums - Energy and Financial sectors get higher risk multipliers
Quality Adjustments - High Piotroski F-Score companies get lower risk ratings
Data Quality Impact - Insufficient data increases risk score and safety requirements

Visual Display

Horizontal Table Layout - Organized by method groups (Valuation → Results → Risk → Health)
Color-Coded Results - Green/Yellow/Red indicators for risk levels and recommendations
Warning Symbols - ⚠️ for data quality issues, ❌ for excluded negative values
Dollar Amounts - Both percentage and dollar-based margin of safety calculations

📈 Interpretation Guide

💎 Intrinsic Value Results

Weighted Average - Combines all enabled methods based on intelligent weighting
Confidence Level - High/Medium/Low based on method agreement and data quality
Method Count - Number of successful valuation calculations

🎯 Margin of Safety

Percentage - Current discount/premium to calculated intrinsic value
Dollar Amount - Absolute dollar difference per share
Buy Price - Risk-adjusted target purchase price

⚖️ Risk Assessment

Low Risk (Green) - Normal position sizing (3-5%)
Medium Risk (Yellow) - Reduced position sizing (1-3%)
High Risk (Red) - Minimal position sizing (<1%)

📊 Recommendations

STRONG BUY - Low risk + adequate margin + high confidence
BUY - Meets risk-adjusted margin requirements
HOLD - Positive margin but higher risk
SELL - Insufficient margin for risk level

🎓 Educational Tooltips

Every parameter includes detailed explanations accessible by hovering over the setting. Learn about:

When to use each valuation method
How different metrics are calculated
Interpretation thresholds and ratings
Risk factors and quality indicators

💡 Best Practices

🚀 For Growth Stocks

Enable DCF and Advanced Multiples
Focus on Piotroski F-Score for quality assessment
Use higher margin of safety due to volatility

💰 For Value Stocks

Enable Graham's and Multiples Valuation
Check Altman Z-Score for financial stability
Consider Magic Formula rating

📈 For Dividend Stocks

Enable Dividend Discount Model
Focus on sustainable dividend coverage
Check for consistent dividend history

⚠️ For Distressed Situations

Prioritize Graham's asset-based approach
Monitor Altman Z-Score closely
Use higher risk-adjusted margins

⚠️ Important Notes & Data Limitations

📅 Data Timing Considerations

Fundamental Data Lag - Company financial data (earnings, cash flows, balance sheet items) may be 1-3 months behind current market conditions

Quarterly Reporting Delays - Most recent available data reflects the company's situation as of the last filed quarterly/annual report

Market vs. Fundamentals Gap - Stock prices react instantly to news, while fundamental data updates occur periodically

Accuracy Impact - Recent business changes, market events, or company developments may not be reflected in current calculations

🔧 Technical Limitations

Data Dependencies - Requires fundamental data availability from TradingView
Quality Warnings - Pay attention to ⚠️ symbols indicating insufficient data
Risk Context - Always consider risk score in investment decisions
Market Conditions - Tool automatically adjusts for market volatility (VIX)
Sector Specificity - Ratios automatically adjust based on company's sector

💡 Best Practice Recommendations

Supplement with Current Analysis - Always combine with recent news, earnings calls, and management guidance
Monitor Data Quality - Check when the underlying financial data was last updated
Consider Market Context - Factor in recent market events that may affect company performance
Use as Starting Point - Treat calculations as baseline analysis requiring additional research

🔗 Methodology

Based on established academic research and professional practices:

Benjamin Graham - Security Analysis principles
Joel Greenblatt - Magic Formula methodology
Edward Altman - Z-Score bankruptcy prediction
Joseph Piotroski - Fundamental analysis scoring
Messod Beneish - Earnings manipulation detection
Modern Portfolio Theory - Risk-adjusted decision making

This indicator is designed for educational and analytical purposes. Always conduct additional research and consider consulting with financial professionals before making investment decisions.

Notes de version

A full rework of the valuation engine, the risk model and the table. Every external figure now has a named source and a link in its tooltip, and every score enters the decision exactly once.

Valuation engine

Discount rate - CAPM with Damodaran's unlevered sector betas, relevered with the company's market D/E; risk-free in the stock's own currency (local 10-year less the sovereign spread); Damodaran country risk premium for non-US exchanges; WACC on market weights with the debt cost measured from interest coverage.
DCF and FCFF - the same two-stage form: five years with growth fading to the terminal rate, then a Gordon perpetuity, mid-year discounting. The exit multiple is gone, so the cash-flow methods no longer echo the Multiples column.
Growth - company-specific (revenue growth, sustainable growth, ROE proxy) minus net share issuance. Mature companies: capped at 15% and by the sustainable growth rate. High-growth profile: capped at 25% without the SGR clamp.
Free cash flow - averaged over the last three fiscal years for cyclical sectors (energy, materials, industrials, consumer discretionary, semiconductors) so a peak or trough year does not become the perpetuity.
Multiples - forward sector P/E on next-year EPS; the P/B leg is dropped when buybacks have hollowed the book (company P/B above 3x the sector's). Sector-aware leg weights: book leads for banks and REITs.
Balance sheet - full equity bridge (debt + preferred + minority interest - cash and short-term investments); diluted EPS and diluted shares; NOPAT at the measured effective tax rate.
Dividend model - growth from the sustainable growth rate; a payer the Gordon model cannot price keeps its column as n/a with the reason.

Quality and risk

Piotroski F-Score is the quality factor in the required margin of safety, replacing a 15-ratio score with industrial thresholds.
Altman Z-Score is not applied to banks or REITs; leverage risk reads interest coverage before book debt/equity.
Beneish M-Score in its three published zones (-1.78 / -2.22), with a watch zone instead of a single cutoff.
Removed - Advanced Multiples (EV/EBITDA, EV/Sales), Magic Formula, VIX and GDP inputs, sector risk premiums. The equity risk premium is Damodaran's implied ERP, editable in Settings.

Table

Summary row - "Now": verdict, buy-below price, margin of safety and intrinsic value on the recommendation colour; Risk in its own cell on its own colour; "Outlook": the PEG read paired with the Rule of 40, shown for growth and technology companies and for any other company that clears it.
Columns - decision first (Intrinsic, MoS, Buy Price, Risk), then the six methods, then price tests (Fwd P/E - PEG, earnings yield) and company health (Piotroski, Altman, Beneish). The detail row shows each method's weight in the blend, the valuation range and the conservative entry.
Layouts - Full, Summary or Details, plus a Compact switch that hides the detail row.
Readability - prices in the symbol's currency (pence and cents handled), margin of safety beyond -100% shown as a multiple, Altman above 10 shown as ">10", one tooltip per column header with the full derivation.
Alert - fires once when price crosses below the risk-adjusted entry, not on every bar.

Settings

Model Assumptions - marginal tax rate and base equity risk premium, each with its source.
Sector Multiples - forward P/E (FactSet), P/B and unlevered beta (Damodaran) per sector, editable, with update links in the tooltips.
Display - font size, table layout, compact.

Notes de version

UI improvements. Choose "Summary + Compact" to fit it into the phone screen. If moving into the chart panel, then add "Top = 16".

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