The composite QScore is the headline number, but the real diagnostic value is in the five-factor breakdown beneath it. Two stocks can both score 65 — one because it's cheap with weak momentum, the other because it's expensive with strong momentum and clean fundamentals. Same composite, very different bets.
This post walks through what each of the five factors actually measures, why it's in the model, and what to look for when the composite alone isn't enough.
Value
The value factormeasures how much the market is paying for the company per dollar of fundamentals — earnings, book value, sales, EBITDA. Lower multiples mean the stock is cheaper relative to what the business actually produces, which historically correlates with higher long-run returns. Value investing traces back to Graham & Dodd in 1934 and was formalized in academic finance as the HML factor by Fama and French in 1993.
QScoring uses four value metrics — P/E, P/B, P/S, and EV/EBITDA — z-scored against the stock's sector. A value score of 80 means the stock is unusually cheap relative to sector peers; 20 means unusually expensive.
Growth
The growth factorlooks at how quickly the underlying business is getting bigger — year-over-year revenue, EPS, and free cash flow growth. Where value asks “how much am I paying for what's already there,” growth asks “how fast is what's already there expanding.” The two are often (but not always) in tension — cheap stocks tend to grow more slowly, fast-growing stocks tend to be expensive.
A high growth score paired with a low value score is the classic “expensive but growing” profile — what high-growth, low-value stocks look like in our universe.
Momentum
The momentum factorcaptures the empirical observation that stocks which have outperformed recently tend to keep outperforming over horizons of three to twelve months. The original work is Jegadeesh and Titman's 1993 paper “Returns to Buying Winners and Selling Losers”; it was later folded into Carhart's four-factor model in 1997 as WML (Winners-Minus-Losers).
QScoring's momentum category combines five inputs: 12-month, 3-month, and 1-month trailing returns, plus RSI(14)and the 50-day vs 200-day moving-average position. The known weakness is that momentum factors fail at regime turns — a stock crashing from a high RSI looks healthy right up until the moment it doesn't.
Profitability
The profitability factorasks how much profit the business actually generates per dollar of capital invested. It was formalized as RMW (Robust-Minus-Weak operating profitability) in Fama and French's 2015 five-factor model after consistent evidence that profitable firms outperformed unprofitable ones even after controlling for value and size.
The QScoring profitability category averages six metrics — return on equity, return on assets, gross margin, operating margin, net margin, and free-cash-flow yield. A 30% gross margin is unremarkable in software but excellent in retail, so all six are z-scored within sector before being combined.
Risk
The risk factormeasures how much the stock's returns swing — both how much it co-moves with the broader market (beta) and how much it moves on its own (60-day realized volatility). Lower volatility historically produces higher risk-adjusted returns — the “low-volatility anomaly” documented by Frazzini and Pedersen and others.
A high risk score (closer to 100) means the stock is calmer than its peers. Counter- intuitively, this is the dimension where “high score is good” can take new readers a moment — it's not measuring how much risk you take, it's scoring the stock's risk profile relative to peers.
How they combine
The composite QScore is the average of two horizon-weighted composites: a long-term composite that leans on fundamentals (Value 30% / Growth 20% / Profitability 25% / Momentum 5% / Risk 20%) and a short-term composite that leans on the technical side (Momentum 40% / Risk 25% / Growth 15% / Value 10% / Profitability 10%). Full weighting and signal logic lives on the methodology page.
Reading the breakdown in practice
When you open a ticker page the five factor scores sit underneath the composite. Look for the pattern, not just the headline number:
- Strong composite, balanced factors— a high-quality compounder. The score isn't hostage to any single factor.
- Strong composite, dominant momentum — recent price action is doing the heavy lifting. Watch for regime turns.
- Weak composite, strong value, weak everything else — a classic value trap candidate. Cheap for a reason.
- Weak composite, strong growth, weak value— expensive growth that hasn't earned its multiple yet.
The composite is a starting point. The factor breakdown is what tells you what kind of bet a given QScore actually is.