Is SOLV a high-quality business?

AlphaMadera's AlphaQuality grade scores Solventum Corporation on six pillars — profitability, capital efficiency, balance-sheet strength, growth durability, cash generation, and shareholder yield. The composite letter grade reflects how SOLV compares to a Buffett-style quality bar.

What is Solventum Corporation's AlphaQuality grade?

AlphaQuality assigns a letter grade (A through F) to SOLV based on a six-pillar quantitative model. The live page shows the composite grade plus each pillar's individual score with the underlying metrics.

What makes SOLV a quality stock?

AlphaQuality looks at return on capital, free-cash-flow margins, debt-to-equity, revenue stability, dividend and buyback policy, and operating-margin trend. Stocks scoring well across all six pillars earn higher grades — the methodology favors compounders over cyclicals.

SOLV - Solventum Corporation

Price: -- -- | CONSENSUS: Buy DETAILS | PRICE TARGET: $92.43 DETAILS

AlphaQuality

Quantitative six-pillar business-quality grade

Stable Earnings Power

AlphaQuality — archetype-weighted quantitative grade

F 30.0 / 100 pillar composite

Composite Grade

Composite of six pillars weighted for stable earnings power businesses. Purely quantitative — no stock price or analyst input.

⚠ Negative tangible book value combined with negative free cash flow — balance sheet is impaired and operating cash generation cannot rebuild it.

Grade overrides the 30.0 pillar composite because hard gates always win. Use the pillar breakdown below to see where the underlying numbers sit.

Profitability

Weight: 20%

B- 68.9

5yr Avg ROIC 14.9% 80/100
Operating Margin Trend -0.19 pp/yr 44/100

Capital Efficiency

Weight: 15%

A- 84.4

5yr Avg ROE 24.5% 99/100
5yr Share-Count CAGR 0.4% 57/100

Growth Quality

Weight: 15%

D 36.5

5yr Revenue CAGR 0.5% 24/100
5yr EPS CAGR 1.2% 28/100
Revenue-Growth Years (5) 4/5 80/100

Cash Generation

Weight: 15%

A 88.5

5yr FCF Margin 14.1% 80/100
5yr FCF/NI Conversion 1.05x 99/100

Balance Sheet

Weight: 20%

B- 65.9

Net Debt / EBITDA 1.63x 76/100
Interest Coverage (EBIT/Int) 5.94x 69/100
Altman Z-Score 2.13 45/100

Stability

Weight: 15%

B- 64.4

EPS Volatility (σ/μ) 0.32 54/100
Piotroski F-Score 6 67/100
Negative-Revenue Years (5) 1/5 80/100

3 of 4 gurus held; 1 added; 2 trimmed; 1 full exit.

Holders: 3 -1
Avg Δ position: +4.3%
New buys: 0
Full exits: 1

Wood sold -100%
Greenblatt increased +114%
Dalio decreased -75%

How this is calculated

AlphaQuality grades six pillars from 0-100 and weights each by archetype:

Profitability (20%) — 5yr Avg ROIC, Operating Margin Trend
Capital Efficiency (15%) — 5yr Avg ROE, 5yr Share-Count CAGR
Growth Quality (15%) — 5yr Revenue CAGR, 5yr EPS CAGR, Revenue-Growth Years (5)
Cash Generation (15%) — 5yr FCF Margin, 5yr FCF/NI Conversion
Balance Sheet (20%) — Net Debt / EBITDA, Interest Coverage (EBIT/Int), Altman Z-Score
Stability (15%) — EPS Volatility (σ/μ), Piotroski F-Score, Negative-Revenue Years (5)

We deliberately ignore stock price, analyst targets, and consensus ratings so the grade is suitable for backtesting forward returns. A minimum of 5 fiscal years of audited statements is required; distressed and highly leveraged infrastructure businesses are declared ungradable rather than forced into a numeric score.