A-Score – Multi-Factor Equity Scoring Framework

You can download the full A-Score methodology white paper here

1. What is the A-Score?

The A-Score is AnalyStock.ai’s proprietary multi-factor scoring system designed to evaluate stocks based on six fundamental pillars: Value, Growth, Quality, Momentum, Volatility, and Dividend Yield. It combines traditional financial metrics with insights from behavioral finance and modern portfolio theory to help investors make informed, data-driven decisions.

2. What are the six scoring pillars?

1. Value: Measures relative cheapness using P/E, P/B, P/S, P/FCF, and EV/EBITDA.
2. Growth: Tracks revenue, cash flow, and net income growth over 3, 5, and 10 years.
3. Quality: Assesses profitability, capital efficiency, and balance sheet strength.
4. Momentum: Captures 12-month price momentum and beta-adjusted momentum.
5. Volatility: Evaluates price stability across multiple timeframes.
6. Dividend Yield: Analyzes current and historical dividend yield for income and signals.

3. How is the A-Score calculated?

Each metric is ranked using 11 quantile buckets within its regional peer group to ensure comparability. Pillar scores are computed as equal-weighted averages of their metrics. The final A-Score is the mean of all six pillar scores. Missing values are filled with regional averages to maintain robustness.

4. What is the academic foundation behind the A-Score?

The A-Score is built on decades of peer-reviewed research, including:

  • Fama & French’s factor models (Value, Size, Momentum)
  • Piotroski’s quality screens
  • Graham & Dodd’s valuation work
  • Markowitz’s portfolio theory (risk/return optimization)
  • Behavioral finance literature on investor biases

5. What are typical use cases?

  • Stock screening based on multi-factor fundamentals
  • Building custom or factor-tilted portfolios
  • Monitoring risk and performance attribution
  • Ranking large universes of equities for alpha generation

6. Why is it regionally normalized?

Markets have local accounting standards and valuation dynamics. By ranking metrics within geographic regions, A-Score ensures fair comparability between stocks, whether they’re based in the US, Europe, or emerging markets.

7. How often is the A-Score updated?

A-Scores are updated quarterly or as new financial statements and market data become available. This ensures scores remain relevant and actionable for screening or systematic investing.

8. Is A-Score suitable for automated strategies?

Yes. A-Score is specifically designed for systematic applications. It is used by quant funds, data-driven advisors, and institutional investors to power investment decisions at scale.