Methodology v1.1 · September 2026

    QMoat Quality & Moat Methodology

    QMoat separates financial quality, competitive advantages and governance so readers can see which parts of a company's quality assessment are supported by financial evidence and which require qualitative judgement.

    Quantitative Quality

    Profitability, balance-sheet quality and earnings stability. Metrics are interpreted in the context of the company's industry and business model.

    Qualitative Moat

    Intangibles and brand, switching costs, network effects, cost advantages, market position and industry competitive forces.

    Governance

    Governance structure, capital allocation, shareholder alignment and material governance risks.

    Rating scale

    QMoat stores ratings on a 0–5 scale where higher values indicate a stronger assessment on the stated dimension. A missing input is displayed as N/A; it is not converted into a zero. Composite ratings should therefore be read together with their underlying components rather than as stand-alone investment signals.

    Quantitative assessment

    The quantitative section focuses on the durability and quality of economics rather than growth alone. The current profile structure covers profitability, balance-sheet quality and earnings stability. Relevant ratios and thresholds vary by industry, so a capital-intensive industrial company should not be interpreted using exactly the same balance-sheet framework as a bank, insurer or software company.

    Qualitative moat assessment

    The qualitative section evaluates whether competitive advantages appear durable. QMoat considers brand and other intangibles, switching costs, network effects, cost advantages and market position. Porter's Five Forces — new entrants, supplier power, buyer power, substitutes and rivalry — provide an additional industry-structure check.

    Source hierarchy

    Primary sources take precedence: audited annual reports, 10-K/20-F or equivalent regulatory filings, financial statements, governance reports and official company disclosures. Earnings releases and investor presentations are secondary primary-source material. Reputable industry and financial sources may be used for context. Material claims should be reconciled against the most recent primary information available.

    Review and freshness policy

    Each company profile shows its review date. Profiles reviewed within 120 days are labelled Current; 121–240 days are labelled Review due; profiles older than 240 days are labelled Stale — review pending. The badge describes the profile review date; it does not imply that every underlying datapoint was published on that date.

    Judgement, uncertainty and missing data

    Competitive advantage and governance cannot be reduced to a single mechanical formula. QMoat therefore separates sub-scores and comments so readers can inspect the reasoning. Where evidence is insufficient, a field should remain N/A rather than being inferred. Scores can change when new results, strategy changes, acquisitions, regulation or competitive developments alter the evidence.

    What the score is not

    A QMoat score is not a valuation, price target or buy/sell recommendation. A high-quality business can be an unattractive investment at a sufficiently high valuation, while a lower-rated business can still perform well. Readers should combine quality analysis with valuation, portfolio construction and their own objectives and risk tolerance.

    Methodology changes

    Material changes to the framework should be documented with a new methodology version and date. Historical profile values should not be silently reinterpreted under a materially different methodology without disclosure.