ratings-snapshot

Ratings Snapshot

Retrieve ratings snapshot with overall rating and key metric scores for public companies using Octagon MCP.

Prerequisites

Ensure Octagon MCP is configured in your AI agent (Cursor, Claude Desktop, Windsurf, etc.). See references/mcp-setup.md for installation instructions.

Query Format

Retrieve a ratings snapshot with overall rating and key metric scores (DCF, ROE, ROA, Debt-to-Equity, P/E, P/B) for <TICKER(S)>, limited to <N> records.

MCP Call:

{
  "server": "octagon-mcp",
  "toolName": "octagon-agent",
  "arguments": {
    "prompt": "Retrieve a ratings snapshot with overall rating and key metric scores (DCF, ROE, ROA, Debt-to-Equity, P/E, P/B) for AAPL, MSFT, GOOGL, limited to 10 records"
  }
}

Output Format

The agent returns a table with rating scores:

Metric	Score
Overall Rating	B
Discounted Cash Flow (DCF)	3
Return on Equity (ROE)	5
Return on Assets (ROA)	5
Debt-to-Equity	1
Price-to-Earnings (P/E)	2
Price-to-Book (P/B)	1

Data Sources: octagon-financials-agent, octagon-stock-data-agent

Metrics Reference

Metric	What It Measures	Higher Score Means
Overall Rating	Composite assessment (A-F or similar)	Better overall quality
DCF Score	Intrinsic value vs market price	More undervalued
ROE Score	Return on shareholder equity	Better profitability
ROA Score	Return on total assets	Better asset efficiency
Debt-to-Equity	Leverage assessment	Lower leverage (better)
P/E Score	Earnings valuation	More attractive valuation
P/B Score	Book value valuation	More attractive valuation

Score Interpretation

Overall Rating Scale

Rating	Interpretation
A	Excellent - Top quality
B	Good - Above average
C	Average - Moderate quality
D	Below Average - Concerns present
F	Poor - Significant issues

Component Scores (typically 1-5)

Score	Interpretation
5	Excellent - Top quintile
4	Good - Above average
3	Average - Middle of pack
2	Below Average - Bottom half
1	Poor - Bottom quintile

Analysis Tips

Quick Screening

Use ratings for initial filtering:

• Focus on A/B overall ratings
• Look for multiple high component scores
• Flag low scores for investigation

Identify Strengths and Weaknesses

Component analysis reveals:

• High ROE + High ROA = Efficient operator
• Low D/E = Conservative financing
• Low P/E + Low P/B = Value candidate
• High DCF = Potentially undervalued

Peer Comparison

Compare ratings across competitors:

• Same industry normalization important
• Relative ranking within sector
• Identify best-in-class

Value vs Quality Trade-off

Different profiles:

• High profitability + High valuation = Quality premium
• Low profitability + Low valuation = Value trap risk
• High profitability + Low valuation = Potential opportunity

Component Deep Dives

DCF (Discounted Cash Flow)

• Compares intrinsic value to market price
• High score = stock appears undervalued
• Based on cash flow projections

ROE (Return on Equity)

• Net Income / Shareholders' Equity
• Measures profit per dollar of equity
• Industry-relative comparison important

ROA (Return on Assets)

• Net Income / Total Assets
• Measures profit per dollar of assets
• Lower for asset-heavy industries

Debt-to-Equity

• Total Debt / Shareholders' Equity
• Lower = less financial risk
• Industry norms vary significantly

P/E (Price-to-Earnings)

• Stock Price / Earnings Per Share
• Lower may indicate value
• Compare to growth rate (PEG)

P/B (Price-to-Book)

• Market Cap / Book Value
• Lower may indicate value
• Less relevant for asset-light companies

Follow-up Queries

Based on results, suggest deeper analysis:

• "What specific ratings criteria are used to calculate these scores?"
• "Are there historical trends in these metrics for [COMPANY]?"
• "What is the methodology for calculating the overall rating from component scores?"
• "Compare detailed financial metrics for [TICKER1] vs [TICKER2]"