How the MoatMint Rating Works

The MoatMint rating scores a stock from 0 to 10 across five pillars: quality, value, growth, momentum and financial health. It is a systematic stock rating system: it runs the same rules on every company. That differs from a stock rating written by a single analyst, whose opinion can shift with their mood.

What the MoatMint rating is, in one sentence

The MoatMint rating is a systematic, evidence-based summary of a company's business quality, growth, value, momentum and financial health. It is computed the same way for every company and shown as a single score from 0 to 10.

That differs from a single analyst's opinion. An analyst rating is one person's call, often with a price target attached. The MoatMint rating comes from a model instead. It runs the same rules over every company's data, so two companies with the same numbers get the same score.

Two kinds of stock rating systems, and where MoatMint fits

Stock ratings split into two broad categories.

Analyst consensus ratings are written by people. A research analyst studies a company and gives an opinion in words: buy, hold or sell, often alongside a price target. It reflects one person's or one firm's judgment, and different analysts covering the same stock can disagree.

Systematic ratings run a fixed set of rules over financial and price data, applied the same way to every company. Investors already know a few names in this category. The IBD Composite Rating ranks stocks on earnings and price strength. The Zacks Rank ranks them on earnings estimate revisions. MoatMint's rating uses the same principle: rules, not opinion, though the specific factors and construction are our own.

MoatMint is a systematic rating. Every company gets scored by the same model, refreshed daily.

Measuring a business on several dimensions, not one, has a long research history behind it. Eugene Fama and Kenneth French showed in 1993 that company size and value, meaning cheapness relative to book value, explained stock returns that a single market-risk measure missed. They extended that model in 2015 to add profitability and investment as two more dimensions, because the original three still left return differences unexplained. The MoatMint rating follows the same logic: several independent pieces of evidence, not one, though its specific factors and construction are our own.

The five things the MoatMint rating measures

Each pillar is scored from 0 to 10, and each measures something different about the business. The exact weighting and blending formula is proprietary and not published.

Quality looks for durable, profitable businesses. It measures how efficiently the company turns assets and cash into profit, and how much real cash the business generates rather than just accounting profit. It also asks whether the company can grow without diluting shareholders. This is where moats and compounders come in: a business that can keep earning strong returns for years, not just one good quarter. Read more in our guide to economic moats.

That efficiency argument has real research behind it. Robert Novy-Marx found in 2013 that profitable firms, measured by gross profit over assets, earned higher average returns than unprofitable ones, a premium comparable in size to the classic value effect. Cliff Asness, Andrea Frazzini and Lasse Pedersen built on that work in 2019, constructing a quality factor from profitability, growth and safety measures and showing that high-quality stocks earned stronger risk-adjusted returns despite trading at only modestly higher prices. MoatMint's quality pillar draws on that same lineage, not a replication of either paper's exact formula.

Value weighs the price against the profit and cash the business actually generates. It compares enterprise value against operating profit and against free cash flow, rather than the share price alone, the approach set out in our guide to how to tell if a stock is undervalued. A great business can still be a poor buy if the price already assumes everything goes right. Cliff Asness, Andrea Frazzini, Ronen Israel and Tobias Moskowitz reviewed the evidence for buying cheap, fundamentally sound businesses in a 2015 paper, "Fact, Fiction, and Value Investing," and found the value premium persists across markets and time periods once common objections to it are addressed.

Growth looks for acceleration in the fundamentals: earnings growth speeding up, and profitability such as return on invested capital improving. That differs from one big multi-year growth number, which may already be slowing.

Momentum measures price momentum, or relative strength: how the stock has traded against the wider market, confirmed by trading volume. The same authors, Asness, Frazzini, Israel and Moskowitz, reviewed the evidence for price momentum in a companion 2014 paper, "Fact, Fiction, and Momentum Investing," and found it a persistent pattern across markets and asset classes going back decades. It is shown as data about how the stock has traded, never as a signal to buy or sell right now.

Financial health looks at balance-sheet strength, the subject of our guide to checking a company's financial health: how much debt the company carries and how far it sits from financial distress. A company can be financially sound and still see its stock price swing. Edward Altman built the original public model for this kind of question in 1968: the Z-score, a bankruptcy-prediction formula built from financial-statement ratios that turned distance from financial distress into something measurable instead of a guess. MoatMint's financial health pillar works in that tradition, using a modern statistical distress model rather than the Z-score itself.

How to read the score

The MoatMint rating runs from 0 to 10. It refreshes daily after the market closes, using the prior session's financial and price data, never real-time or hand-picked. Read the score as relative: a higher number means stronger evidence across the five pillars, compared with the rest of the rated universe. It is not an absolute pass or fail line, and there is no fixed threshold where a score becomes a buy signal.

A stock's profile page shows the overall rating and each of the five pillar scores together, each with a plain-English label explained in our guide to what a good buy rating means. You can check the summary number, then see which pillar is carrying it.

What the MoatMint rating is not

Not a price target. A price target estimates where a stock might trade later. The MoatMint rating summarizes business evidence as it stands today. They answer different questions.

Not a buy or sell signal. The rating does not tell you when to trade. It is research and analysis, not a personalized recommendation.

Not a guarantee or prediction of returns. A high score describes strong evidence across the five pillars today. It does not promise future performance.

Not built on real-time data. The rating updates once a day after the market closes, not intraday.

How long-term investors use the rating

Treat the MoatMint rating as a systematic starting point. Use it to find and compare quality, growing businesses worth researching further, not as a substitute for reading the business yourself. Add to quality, or do nothing - that is the discipline a systematic score supports.

In practice, sort the full screener by overall score to compare candidates side by side. Or open a ready-made screen for high-quality companies. If you are building a shortlist of wide-moat, high-quality companies, the rating is one input into a concentrated list of quality names. That is not a portfolio spread across hundreds of tickers.

MoatMint ratings and this article are for informational and educational purposes only, not personalized investment advice.