Ticker Scores Methodology
How Luum Wealth calculates Risk, Value, Quality, Momentum, and Dividend scores for every stock and ETF.
Wealth tier
Updated nightly at 04:00 UTC
Ticker Scores give you a quick, at-a-glance signal on any stock or ETF across five dimensions: Risk, Value, Quality, Momentum, and Dividend. Each score runs from 0 to 100. Higher is always better — a Risk score of 85 means lower risk, a Value score of 90 means an attractively priced stock.
Scores are computed automatically every night using fundamental and market data from EODHD. They are not buy or sell recommendations. They are computed with transparent methodology for education purposes only. They are a starting point for your own research.
Risk — How safe is the balance sheet?
The Risk score measures how likely a company is to weather a downturn. A higher score means lower overall risk. Three signals are averaged together:
Beta (price volatility vs. the market)
Beta measures how much a stock moves relative to the broad market. A beta of 1.0 moves in lockstep with the market. Below 1.0 is less volatile; above 1.0 is more volatile.
| Beta | Score |
|---|---|
| Below 0.5 | 90 |
| 0.5 – 0.8 | 75 |
| 0.8 – 1.2 | 55 |
| 1.2 – 1.8 | 35 |
| Above 1.8 | 15 |
Debt-to-Equity ratio
A lower ratio means a cleaner balance sheet and less financial risk.
| Debt / Equity | Score |
|---|---|
| Below 0.3 | 90 |
| 0.3 – 0.8 | 70 |
| 0.8 – 1.5 | 50 |
| 1.5 – 3.0 | 30 |
| Above 3.0 | 10 |
Negative debt-to-equity (where liabilities exceed equity) is excluded — this signal is skipped and the other two signals carry more weight.
Current Ratio
The current ratio compares short-term assets to short-term liabilities. Above 1.0 means the company can cover near-term obligations. Above 2.0 is considered healthy.
| Current Ratio | Score |
|---|---|
| 3.0 or above | 90 |
| 2.0 – 3.0 | 75 |
| 1.5 – 2.0 | 55 |
| 1.0 – 1.5 | 35 |
| Below 1.0 | 15 |
Value — Is the stock attractively priced?
The Value score measures whether a stock is cheap or expensive relative to what the company actually earns and generates. Three valuation multiples are averaged:
Price-to-Earnings (P/E, trailing twelve months)
A lower P/E generally means you're paying less for each dollar of profit. Negative P/E (loss-making companies) is excluded from this signal.
| P/E Ratio | Score |
|---|---|
| Below 10 | 90 |
| 10 – 15 | 75 |
| 15 – 20 | 60 |
| 20 – 30 | 45 |
| 30 – 50 | 25 |
| Above 50 | 10 |
Price-to-Book (P/B)
Book value is the net worth of a company's assets. A lower P/B means you're paying closer to (or less than) what the assets are actually worth on paper.
| P/B Ratio | Score |
|---|---|
| Below 1.0 | 90 |
| 1.0 – 2.0 | 75 |
| 2.0 – 4.0 | 55 |
| 4.0 – 8.0 | 35 |
| Above 8.0 | 15 |
Price-to-Sales (P/S, trailing twelve months)
Useful for companies with low or no profits where P/E is not meaningful. A lower P/S suggests cheaper revenue.
| P/S Ratio | Score |
|---|---|
| Below 1.0 | 90 |
| 1.0 – 3.0 | 70 |
| 3.0 – 6.0 | 50 |
| 6.0 – 12.0 | 30 |
| Above 12.0 | 10 |
Quality — Is this a strong business?
The Quality score measures the fundamental health of the underlying business. Four metrics are averaged:
Return on Equity (ROE, trailing twelve months)
| ROE | Score |
|---|---|
| Above 30% | 90 |
| 20% – 30% | 75 |
| 10% – 20% | 55 |
| 0% – 10% | 35 |
| Negative | 10 |
Gross Margin (trailing twelve months)
| Gross Margin | Score |
|---|---|
| Above 60% | 90 |
| 40% – 60% | 75 |
| 25% – 40% | 55 |
| 10% – 25% | 35 |
| Below 10% | 15 |
Net Margin (trailing twelve months)
| Net Margin | Score |
|---|---|
| Above 20% | 90 |
| 10% – 20% | 75 |
| 5% – 10% | 55 |
| 0% – 5% | 35 |
| Negative | 10 |
Revenue Growth (3-year average)
| Revenue Growth (3Y) | Score |
|---|---|
| Above 20% | 90 |
| 10% – 20% | 75 |
| 5% – 10% | 55 |
| 0% – 5% | 35 |
| Negative | 15 |
Momentum — Is the stock trending in the right direction?
The Momentum score captures recent price strength and analyst sentiment. Two signals are averaged:
Analyst Recommendation Ratio
This looks at the balance of buy, hold, and sell ratings from Wall Street analysts.
| Buy ratings as % of total | Score |
|---|---|
| 70% or above | 90 |
| 55% – 70% | 75 |
| 40% – 55% | 55 |
| 25% – 40% | 35 |
| Below 25% | 15 |
“Buy ratings” includes both Buy and Strong Buy. “Total” includes Strong Buy, Buy, Hold, Sell, and Strong Sell.
52-Week Price Position
Measures where today's price sits within the stock's 52-week high/low range. Formula: (current price − 52-week low) ÷ (52-week high − 52-week low) × 100
| Position in 52-week range | Score |
|---|---|
| Top 20% (80th–100th percentile) | 90 |
| 60th–80th percentile | 75 |
| 40th–60th percentile | 55 |
| 20th–40th percentile | 35 |
| Bottom 20% (0–20th percentile) | 15 |
Dividend — How attractive is the income?
The Dividend score evaluates the yield on a stock's indicated annual dividend. Scoring peaks in the 3.5–6% range, balancing income attractiveness against the risk that a very high yield reflects financial stress or an unsustainable payout.
| Dividend Yield | Score | Notes |
|---|---|---|
| 0% (no dividend) | 5 | Not an income stock |
| Below 1% | 25 | Minimal income |
| 1% – 2% | 50 | Modest income |
| 2% – 3.5% | 70 | Solid income |
| 3.5% – 6% | 85 | Attractive yield |
| 6% – 9% | 65 | High yield, elevated risk |
| Above 9% | 45 | Danger zone — payout may be at risk |
ETFs with regular distributions are scored the same way using their indicated annual yield.
How the final score is displayed
Each score shown in the app is the average of its available sub-signals. If a data point is unavailable for a given stock (for example, a pre-revenue company has no P/E), that signal is excluded and the remaining signals carry more weight. If all signals for a dimension are unavailable, the score displays as —.
This means scores for smaller, less-covered companies may be based on fewer data points than scores for large-cap, widely-covered stocks.
When are scores updated?
Scores are recalculated nightly at 04:00 UTC for every stock and ETF currently held in your portfolios or saved to your watchlist. The score date shown at the bottom of the card tells you when the most recent calculation ran.
What scores are not
Ticker Scores are a research tool, not financial advice. A high score does not mean a stock will go up. A low score does not mean a stock will go down.
- Scores are backward-looking — they reflect reported financials, which may be weeks or quarters old.
- Scores do not account for macroeconomic conditions, news events, or management quality.
- A high Value score on a cheap stock may mean it is cheap for a good reason.
- A low Dividend score simply means the stock pays little or no dividend — this is normal for growth companies.
Always use Ticker Scores alongside your own research and in the context of your personal investment goals. If you have questions about a specific score, email us at support@luumwealth.com.
Data sourced from EODHD. Scores are for informational purposes only and do not constitute financial advice.