Piotroski F-Score Grading Matrix (2026)
The F-Score ranks value stocks from 0 to 9 to separate fundamentally improving turnarounds from value traps.
| F-Score Range | Financial Condition | Investment Strategy |
|---|---|---|
| 8 - 9 Points | Strong Fundamentals | Prime long buy candidate with high turnaround upside |
| 5 - 7 Points | Average Health | Stable company; requires sector catalyst verification |
| 0 - 4 Points | Weak / Value Trap | Avoid or short candidate due to deteriorating balance sheet |
Piotroski 9-Point Fundamental Score Matrix
- Strong Value Stocks (8-9 Points): High financial health, improving profit margins, strengthening balance sheet.
- Moderate Health (5-7 Points): Stable corporate performance; requires industry catalyst.
- Weak / Value Trap (0-4 Points): Deteriorating cash flows, high debt, earnings dilution risk.
9 Specific Checklist Rules Across 3 Groups
- Profitability (4 pts): Positive Net Income (+1), Positive Operating Cash Flow (+1), Higher ROA YoY (+1), CFO > Net Income (+1).
- Leverage/Liquidity (3 pts): Lower Long-term Debt YoY (+1), Higher Current Ratio YoY (+1), Zero Share Dilution (+1).
- Operating Efficiency (2 pts): Higher Gross Margin YoY (+1), Higher Asset Turnover YoY (+1).
Piotroski Outperformance Fact
Joseph Piotroski's landmark study demonstrated that buying high F-Score (8-9) low Price-to-Book value stocks delivered a 7.5% annual outperformance over market benchmarks!