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Stock Expert AI

Stock Analysis Methodology

Stock Expert AI scores U.S.-listed common stocks with a sector-relative 5-pillar MoonshotScore — Business Quality, Financial Safety, Valuation, Growth Durability, and Momentum — while ETFs, OTC, and foreign listings use a legacy 9-factor model. A 7-dimensional Quality Gate filters low-quality content, and scores recalculate daily under editorial oversight from founder Sedat ANAK.

Last Updated: May 4, 2026

1. How the MoonshotScore Works

MoonshotScore is a single 0-100 rating, but it is calculated through the lens that best fits the security. U.S.-listed common stocks use the 5-Pillar model below. ETFs, OTC names, and foreign listings — which lack directly comparable company fundamentals — use the legacy 9-Factor model in section 2.

The 5-Pillar model (U.S. common stocks). Each company is scored against its sector peers across five pillars, then combined into one number. Because the comparison is sector-relative, a stock is judged against its true peers — a utility against utilities, a software company against software — so the score reflects genuine quality rather than which industry it happens to belong to.

  • Business Quality: Is this a genuinely good business? Profitability, margins, and returns on capital versus sector peers.
  • Financial Safety: Could this blow up? Debt load, cash position, and overall balance-sheet strength.
  • Valuation: Am I paying a fair price? Price measured against fundamentals, relative to peers.
  • Growth Durability: Is the growth real and likely to last? Quality of the revenue and earnings trend, not one-off spikes.
  • Momentum: Is the market already moving on this? Recent price trend.

Score bands: Exceptional (80-100), Strong (65-79), Fair (45-64), Weak (25-44), Avoid (below 25). The score also weighs risk signals, so a stock with a few strong pillars can still land lower when the fundamentals carry warning flags.

2. The Legacy 9-Factor Model (ETFs, OTC & Foreign Listings)

For securities outside U.S. common equity — ETFs, OTC names, and foreign listings — MoonshotScore uses a 9-factor composite. Each factor draws on a distinct data signal, weighted by historical predictive value.

  • Revenue Growth (20%): Year-over-year revenue growth scored against fixed thresholds. Faster-growing companies score higher — the single most important factor.
  • Gross Margin (10%): Gross profit as a percentage of revenue. Higher margins indicate pricing power, competitive moats, and scalable business models.
  • Operating Leverage (10%): Scaling-efficiency estimate derived from the revenue-growth trend as a proxy. Stronger growth signals more efficient scaling.
  • Cash Runway (10%): How long the company can operate at its current burn rate — enough cash to fund the growth strategy.
  • R&D Intensity (10%): Research and development spending as a percentage of revenue. High intensity signals commitment to innovation and a future pipeline.
  • Insider Activity (15%): Net insider buying or selling. When insiders buy their own stock, it signals confidence in the company's prospects.
  • Short Interest (5%): Trading liquidity — daily volume turnover relative to the share float. Healthy turnover means smoother entry and exit.
  • Price Momentum (10%): Price performance across 1-, 3-, and 6-month windows. Stocks with positive momentum tend to keep outperforming.
  • News Sentiment (10%): AI-analyzed sentiment from recent news articles and analyst reports. Positive trends often precede price movements.

Letter grades: S (80-100), A (65-79), B (50-64), C (35-49), F (below 35).

3. Data Sources

  • Financial Modeling Prep (FMP) — Primary: Fundamentals, financial statements, analyst ratings, insider transactions, technical indicators, and real-time quotes.
  • Yahoo Finance — Fallback: Supplementary market data, ETF data, earnings estimates.
  • Alpaca Markets — Fallback: Real-time and historical price data for charting and technicals.
  • SEC EDGAR: Corporate filings (10-K, 10-Q, 8-K) and insider filings for fundamental analysis.
  • News (1,800+ sources): Daily aggregation for sentiment, catalysts, and the Market Intelligence Journal.

4. The 7-Dimensional Quality Gate

Every stock page is scored across 7 dimensions before publication. Pages below the threshold are not published.

  • Data Completeness: Profile, financials, price data presence.
  • Market Presence: Volume, market cap, exchange tier.
  • Financial Health: Revenue, profitability, balance sheet strength.
  • Content Quality: Dossier depth, AI analysis coherence, news coverage.
  • Technical Signals: TA indicators availability and reliability.
  • Regulatory Compliance: SEC filing currency, disclosure status.
  • Historical Data: Available time series depth and consistency.

5. Validation Pipeline

AI-generated metrics are cross-validated against source data through a 6-layer pipeline:

  1. Numeric integrity (figures match source within tolerance)
  2. Ticker consistency (symbol mentions match the page entity)
  3. Length ratio (translated content paragraph parity)
  4. Paragraph preservation (≥60% structural fidelity)
  5. HTML tag validation (no malformed markup)
  6. Title sanity (5-300 char range, no template leakage)

Discrepancies trigger automatic regeneration. Persistent failures route to manual review.

6. Update Frequency

  • MoonshotScore: Recalculated daily.
  • Stock prices: Real-time during U.S. market hours.
  • Dossiers: Refreshed on material events (earnings, ±5% moves, news).
  • Financial statements: After quarterly and annual filing processing.

7. Limitations & Disclaimers

MoonshotScore is an analytical signal, not a prediction. Past performance does not guarantee future results. Scores reflect current data; market conditions change continuously. AI may occasionally produce inaccurate outputs despite validation; report errors to [email protected].

Not financial advice. Stock Expert AI is an educational research platform, not a registered investment advisor. Consult a licensed financial professional for personal investment decisions.

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