⬟
Fundamental Analysis
The business behind the ticker — revenue growth, margins, and valuation tell the real story
APEX Weight7%
Key Metrics4 core ratios
TypeValuation + Growth
Time FrameQuarterly data
Key Fundamental Metrics Explorer
📊 P/E Ratio
Price divided by earnings per share. The most widely used valuation metric.
✅ BULLISH SIGNAL
Below sector average PE
🚨 BEARISH SIGNAL
PE above 50x with no growth
⬟ HOW APEX USES THIS
APEX compares PE to sector average. 30%+ below sector = bullish signal.
Scoring Ranges
Value
<15
Fair
15-25
Rich
25-40
Expensive
>40
REAL EXAMPLES
NVDA
PE: 65x
AAPL
PE: 28x
TSLA
PE: 72x
META
PE: 22x
Fundamental Signals — What APEX Scores
📊
P/E Ratio
Below sector average PE with accelerating earnings = most bullish fundamental combination. APEX compares to sector, not absolute levels.
Valuation Signal
📈
Revenue Growth
Accelerating YoY revenue growth is the single most important fundamental for growth stocks. Deceleration triggers fundamental warnings.
Growth Signal
💰
Profit Margins
Expanding margins = pricing power and operational leverage. Contracting margins = competitive pressure. APEX tracks margin direction, not level.
Quality Signal
🏦
Debt/Equity
Conservative leverage = financial flexibility. High debt in rising rate environments = existential risk. APEX weighs this against cash flow.
Risk Signal
💵
Free Cash Flow
The most honest metric — how much actual cash does the business generate? Companies that grow revenue without generating cash are unsustainable.
Cash Signal
🔄
Earnings Revisions
Analyst earnings estimate revisions are leading indicators. Upward revisions signal improving business momentum. APEX tracks revision direction.
Momentum Signal
📦
PEG Ratio
PE divided by growth rate. PEG below 1.0 means you are paying less than 1x for each point of growth — the Warren Buffett sweet spot.
Value+Growth
🎯
Return on Equity
How efficiently is management using shareholder capital? ROE above 20% with low debt = exceptional business quality. APEX rewards high ROE.
Quality Signal
Real Market Examples
NVDA
EXCEPTIONAL
2023-2024
NVDA — Fundamentals EXCEPTIONAL
NVDA had revenue growth of 200%+ YoY, expanding margins from 53% to 75%, and a PEG ratio below 1.0 despite a high absolute PE. APEX scored fundamentals at 92/100 — the combination of explosive growth and margin expansion is rare and highly bullish.
How APEX Uses Fundamentals
⚖️
7% Weight — The Anchor Signal
Fundamentals are the lowest weight in APEX at 7% because they change quarterly — not daily. But they act as a floor: no matter how bullish technical signals are, severely deteriorating fundamentals cap the score.
📊
Sector-Relative Scoring
APEX never scores PE ratios in absolute terms. A PE of 40x is cheap for a SaaS company growing 50% and expensive for a utility company growing 3%. All metrics are scored relative to sector.
🔄
Earnings Revision Momentum
APEX tracks whether analyst earnings estimates are being revised up or down over the past 30 days. Consistent upward revisions = fundamental momentum. This is one of the most predictive signals.
🛡️
Fundamental Floor for Exits
A fundamental deterioration score below 30/100 — even with bullish technical signals — automatically adds a Review Thesis exit trigger. APEX protects against value traps.
APEX Signal Weight Distribution
MACD+RSI
20%
RSI
18%
MACD
15%
MA Cross
12%
Bollinger
10%
Volume
10%
Sentiment
8%
Fundamentals ←
7%
⬟ Fundamentals act as a floor — they can override bullish technical signals
⚠️ Common Fundamental Analysis Mistakes
✗
Using absolute PE ratios without context
✓ Fix: A PE of 30x is cheap for NVDA growing 100% and expensive for a bank growing 5%. Always compare PE to growth rate (PEG) and to sector peers.
✗
Ignoring earnings revision direction
✓ Fix: A stock with a high PE but rising earnings estimates is often a better buy than a stock with a low PE but falling estimates. Direction matters more than level.
✗
Focusing on revenue without margins
✓ Fix: Revenue growth that destroys margins is a red flag. Amazon lost money for years to grow revenue. Most companies can't survive that — check if growth is profitable.
✗
Treating all debt equally
✓ Fix: Debt on a business generating 30% free cash flow margins is very different from debt on a business barely breaking even. Always check debt relative to cash generation.
See Fundamental analysis on a real stock
APEX combines Fundamentals with 7 other signals for the full institutional picture
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