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: $91.22 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 — the six pillars score only reported financials, no 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- 62.7

5yr Avg ROIC 12.2% 71/100
Operating Margin Trend -0.19 pp/yr 44/100

Capital Efficiency

Weight: 15%

B 74.7

5yr Avg ROE 16.4% 83/100
5yr Share-Count CAGR 0.3% 58/100

Growth Quality

Weight: 15%

C 56.4

5yr Revenue CAGR 2.7% 43/100
5yr EPS CAGR 6.1% 61/100
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- 67.5

Net Debt / EBITDA 1.63x 76/100
Interest Coverage (EBIT/Int) 5.94x 69/100
Altman Z-Score 2.32 51/100

Stability

Weight: 15%

B- 64.4

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

4 of 4 gurus held; 4 added.

Holders: 4 +1
Avg Δ position: +1816.8%
New buys: 0
Full exits: 0

Dalio increased +5167%
Cooperman increased +261%
Greenblatt increased +23%

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), Negative-Revenue Years (5), Piotroski F-Score

The six pillars read only reported financial-statement fields — no analyst targets or consensus ratings. The archetype that picks which pillar formulas apply is not fully price-free, though: it can route a company to the distressed/ungradable archetype based on price vs. its 52-week high, and beta affects one classification check. A minimum of 5 fiscal years of audited statements is required. Insurers and banks are graded on their own methodology — insurers on loss ratio, its trend and stability, and premiums-to-surplus; banks on the efficiency ratio, its trend and stability, and equity-to-assets — rather than on industrial margin/ROIC signals. Distressed, highly leveraged infrastructure, asset-manager, and other financial businesses are declared ungradable rather than forced into a numeric score.