The Meridian Score

Valuation

How cheap or expensive the stock is versus its sector peers, measured with price multiples like P/E (price to earnings), P/S (price to sales), and EV/EBITDA (enterprise value to operating profit). A high valuation score means you’re paying less for each dollar of the company’s earnings, sales, and cash flow than you would for comparable companies — which leaves more room for the price to rise and a margin of safety if results disappoint. A low grade flags a richly-priced stock that already has a lot of good news baked in and must keep delivering strong growth to justify the price. If you’re a long-term or value-minded investor this is central; just remember a cheap stock can be cheap for a reason (a “value trap”), so pair it with the growth and profitability scores.

Educational information, not investment advice. See it applied across the screener →