octagonai 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]"