What is the DVM?

Every stock on Trendlyne gets scored on three trademark metrics: Durability, Valuation and Momentum. Stocks are ranked from 0 (worst) to 100 (best) on each score. Scoring is a great filter: it helps you refine the stock universe you are researching, and quickly understand the overall health of a stock.​

• Momentum is a very effective short term score, while Durability and Valuation help assess the stock’s health over the long term.
• The Valuation score helps you identify stocks that appear attractively valued relative to their underlying fundamentals and current market price.
• The Durability score looks at many different metrics, including long-term performance data, to identify stocks that have stood the test of time.

Stocks that are green on all three DVM metrics are rare, because our scoring is fairly stringent.

Classifying stocks based on the DVM score

The main classifications of stocks based on the DVM are as follows:

In this classification, G = Good, M = Mid(neutral) and B = Bad.

• Durability scores above 55 are considered good(G) and below 35 are considered bad(B). Scores between 35-55 are considered neutral/Medium/Middle(M)
• Valuation scores above 50 are considered good(G) and below 30 are considered bad(B). Scores between 30-50 are considered neutral/Medium/Middle(M)
• Momentum score above 59 are considered good(G) and below 30 are considered bad(B). Scores between 30-59 are considered neutral/Medium/Middle(M)

For example :
• DVM is GGG: DVM is good across all three metrics. The stock qualifies as a “Strong performer” in financials.
• DVM is GGB: The stock scores strongly on Durability and Valuation but has relatively weaker Momentum. This combination reflects value-oriented characteristics, with relatively attractive valuation alongside lower recent price momentum.
• DVM is GBG: The stock is strong in durability and momentum, but valuation is expensive. Strong momentum is supporting the stock despite its higher valuation.
• DVM is BGG: These alert investors to riskier investments. Past durability of the stock is not strong, but investors should look for signals here for the company exercising a turnaround, or a pivot into a more profitable segment. Valuation and momentum is good: Turnaround Potential
• DVM is BGB: The stock scores well on Valuation, but has weak Durability and Momentum. This suggests that the attractive valuation is not supported by strong fundamentals or price momentum: Value Trap.
• DVM is BBG: The stock has strong Momentum, but weak Durability and Valuation. The recent price movement is strong, but the stock lacks support from fundamentals and valuation.
• DVM is BBB: Bad across metrics, there is not much to redeem stocks with this classification.

Do scores change?

Yes, Durability and Valuation scores get revised significantly based on the company’s quarterly and annual performance, as well as daily changes in ratios such as P/E. Additional events like warnings issued on the stock by regulators are also part of our score, and impact the score.

The Momentum score changes on a daily basis (end of day) since this tracks the daily price, volume movement and other technical indicators to assess the bullishness/bearishness of a stock.

Durability Score

Scores are calculated from 0-100, with zero the worst and 100 the best.

Durability scores above 55 are considered good(G) and below 35 are considered bad(B). Scores between 35-55 are considered neutral/Medium/Middle(M)

Stocks with a high durability score (top 20 percentile) are companies that have consistently and over time, demonstrated good growth and cashflow, stable revenues and profits, and low debt.

The durability score considers several different metrics and ratios around earnings, and models these over time.

The Durability score is calculated using the company’s reported financials, including revenue stability, profit stability, growth, cash flow, debt levels, and earnings-related metrics and ratios. These factors are evaluated over multiple periods to assess consistency over time. Regulatory warnings issued against the stock are also considered in the score.

Valuation Score

Scores are calculated from 0-100, with zero the worst and 100 the best.

Valuation scores above 50 are considered good(G) and below 30 are considered bad(B). Scores between 30-50 are considered neutral/Medium/Middle(M)

Stocks with a high Valuation score (top 20 percentile) rank higher on the value factors considered in the score. Their valuation characteristics compare favourably with other stocks in the universe, highlighting relatively stronger value characteristics.

Stocks with a low Valuation score (bottom 20 percentile) rank lower on the value factors considered in the score. Their valuation characteristics compare less favourably with other stocks in the universe, highlighting relatively weaker value characteristics.

The Valuation score is based on key valuation parameters such as P/E and P/B, compared with the company’s historical averages and industry levels. Other valuation ratios are also considered across multiple periods to assess how the stock is valued relative to its past and its industry.

Momentum Score

Scores are calculated from 0-100, with zero the worst and 100 the best.

Momentum score above 59 are considered good(G) and below 30 are considered bad(B). Scores between 30-59 are considered neutral/Medium/Middle(M)

Momentum score or momentum score identifies the bullish/bearish nature of the stock. Stocks with a high momentum score (which is calculated daily from over 30 technical indicators) are seeing their share price rise, and increase in volumes and sentiment.

The Momentum score looks at price movement, trading volume, moving averages, RSI, and other technical indicators. These parameters are evaluated across different time periods to assess the strength and consistency of a stock’s price trend. The score combines these indicators to highlight stocks showing relatively stronger or weaker momentum.

Stocks not eligible for scores