CompanyGraph
Use to find companies where this pattern is active.
Three observations co-occur: price is several standard deviations below its one-year mean, the company has reported positive net income every year for three years, and the equity ratio is in the elevated industry-benchmarked range. The configuration describes a depressed-price, profitable, equity-funded profile.
State
Price stretched below 1y mean with sustained profitability and elevated equity ratio
Emergence
Price is stretched below its one-year mean (in standard-deviation terms) while profitability has been positive every year for three years and the equity ratio is in the elevated range. The price compression and the fundamental profile co-occur; the interpretation does not claim one explains the other or predict that price will revert toward the mean.
Limits
This interpretation describes a co-occurrence of positional and fundamental observations, not a bounce prediction. The Z-score observation tells you only that current price is several standard deviations below its lookback mean; it does not estimate when (or whether) the price gap closes. Stocks at stretched-low Z-scores with three-year profitability can continue declining, stay depressed, or revert; the configuration is consistent with all three.
Explanation
Each observation is an independent reading: Price Stretched Below Mean (Z-Score, 1Y) measures the current price's distance below its one-year mean in standard-deviation terms. The reading is positional only and says nothing about future direction. Net Income Positive Every Year (3Y) measures consistency of bottom-line profitability over the trailing three fiscal years. It does not measure profit magnitude or growth. Equity Ratio (Industry-Benchmarked) measures the share of assets funded by equity, scaled against the stock's industry. An elevated reading indicates equity-heavy capital structure relative to peers. The three together describe a configuration: price compressed below its recent mean while the underlying business has reported profits consistently and carries an equity-heavy balance sheet. They do not predict reversion or guarantee fundamentals will hold.
Interpretation
Co-occurrence of a price-below-mean reading, a multi-year positive-income gate, and a high equity-to-assets reading. The formulas record price position, an earnings-history gate, and a balance-sheet composition; they do not predict mean reversion.
Required Observations
All Years Positive Income 3y
Net income was positive in each of the last N fiscal years
Inverse Zscore 1y
Current price sits well below its mean over the lookback window, in standard-deviation terms.
Ratio Balance Equity
Specific balance-sheet ratio benchmarked against industry (which ratio depends on the instance)