ERAMS stands for Earning Report Analysis and Measurement Score
I have started the analysis of the ER Season Performance results which has provided me with the rankings for the first companies analyzed. As additional companies are reviewed the rankings will be updated. Here are the data points used in this ranking:
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Revenue Growth
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Accelerating/Decelerating Score
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Sequential Revenue Growth
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Percentage of Beat
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Profitability Progress
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Guidance Analysis
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+/- Efficiency Score
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Intangibles
Companies ER Scores with Current Company Ranking:
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UPST 550.4
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BILL 384.6
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DDOG 303.9
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MNDY 229.8
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ZS 220.4
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NET 179.6
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BROS 161.4
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GLBE 140.5
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DOCN 131.3
10)U 115.7
11)FVRR 95.2
So far I have just ran the results for a handful of companies but expect to regularly update the ranking as additional companies are added. As an example of how I view and utilize the ERAMS results a rough outline to what they mean can be found here:
A) STARTER - ERAMS score of 300 or better
B) The Bench - ERAMS score of 200 or better
C) Scout Team - ERAMS score of 125 or better.
There are minor exceptions and sometimes overlap in the portfolio roster allocations - which is to say judgement calls. While the ERAMS certainly isn’t perfect and is just a personal thing I do, more or less, to keep up to speed on our companies - I have used it enough over the last year or so of development in it’s various forms, that I would say it plays out fairly well initially but is not predictive on a long term basis. However, having said that, since the scores are rebooted and re-plotted every Quarter, the running results/scores have given me confidence in applying adjustments to the portfolio roster. Which in some ways generates ideas for TBs to entered and exited - or something like that.
Note 1: The +/- Efficiency score is taken from the NBA +/- score model that grades players on how their team performs while they are in games. For purposes of the ERAMS score the +/- Efficiency ranking shows
how the company performed compared to the markets and just as importantly - to the other roster companies.
Note 2: Intangibles is the only component of the ER score that is not specifically data based. Rather - the Intangibles score is based on things/factors that may pop up in the Conference Calls. For example it could represent an extraordinary high Retention Rate, Outstanding Customer Growth, or perhaps some company boosting announcement. It works both ways - it could be a negative like a company founder leaving, and accountant caught with his hand in the cookie jar - or something as simple as the presentation sounding weak. The range here is +20/-20 pts and is entirely a judgement call.
Every other score int he system is a simple calculated formula based on reported data.
Note 3) I have started running company efficiency scores on a weekly basis beyond the reach of ERs - and have found them useful as well.
All the Best,