Skip to main content

Profit Margin Exploration

Overview​

The Profit Margin Exploration profile surfaces companies with strong or improving profit margins and capital efficiency, based on a comprehensive view of pre-tax and after-tax margin trends and return on equity (ROE). It’s designed to assess whether a company is becoming more efficient over time — both operationally and financially.

info

This profile is updated in real time and displays only common shares with a Liquidity Rating > 70, helping users focus on liquid companies with reliable margin and return metrics.

Strategy Focus​

  • Analyze profitability consistency and expansion using clean GAAP-adjusted margin data
  • Evaluate capital efficiency trends via 3-year ROE growth
  • Spot companies with improving pre-tax and after-tax margins
  • Combine financial strength with technical and institutional overlays
  • Monitor performance of high-margin names with upcoming catalysts
  • Explore which companies maintain or improve margins across volatile market cycles

Filters Applied​

  • Ticker Type = Common Shares
  • Liquidity Rating > 70: Ensures inclusion of only liquid, active companies with stable data

Metrics Used​

Profitability Metrics and Ratings​

  • Profit Rating: Captures the strength and consistency of margin performance and capital efficiency. A high score reflects sustained profitability and strong operational leverage
  • Profit Margin BT – Latest/2Q/3Q/4Q Ago (%): Reveals before-tax margin trends, ideal for analyzing core business performance before tax-related distortions
  • Profit Margin BT Growth – 3 Years (%): Measures long-term expansion of operational margins, adjusted to exclude one-time effects
  • Profit Margin AT – Latest Quarter (%): Shows final bottom-line efficiency — the percentage of revenue retained as net income after taxes
  • Profit Margin AT Growth – 3 Years (%): Tracks whether companies are improving net margins year-over-year over a three-year span

Capital Efficiency​

  • ROE Growth – 3 Years (%): Assesses how well a company has increased its return on equity over time — a key metric for long-term shareholder value creation

Institutional and Composite Metrics​

  • Accumulation/Distribution Score: Indicates whether institutional activity supports profitability trends — useful for confirming conviction behind margin-driven setups
  • MarketAlpha Rating: Provides a holistic composite signal that often aligns with operational excellence
  • EPS Rating, Sales Rating: Included to give a full picture of whether profit margins are backed by top-line growth and earnings delivery

Timing and Performance Metrics​

  • Next Earnings In Days: Highlights when the next earnings report is due — important when assessing momentum or risk around margin stability
  • 52 Week High (%): Measures breakout or compression zones in high-margin companies
  • Return Year to Date (%): Offers insight into how margin leaders have performed this year relative to peers
  • Dollar Volume Rank: Ensures results are sorted by capital flow and visibility for tradeability and institutional relevance

Default Sorting Logic​

Results are sorted by Dollar Volume Rank (ascending) to prioritize the most liquid and actively followed names.

Practical Use Cases​

  • Screen for capital-efficient, high-margin leaders
  • Identify companies with consistent margin improvement over time
  • Validate setups with institutional support and profitability alignment
  • Analyze ROE and margin growth alongside EPS and sales trends
  • Prepare for earnings events where margin expansion is expected
  • Compare operational strength across industries or themes