Methodology

How a filing becomes a phase, and why the comparison is the company itself.

Why compare a company with itself?

A 9% operating margin is excellent for a grocer and weak for a software company. Peer rankings penalize businesses for being the kind of business they are, and they miss turns that happen inside a company.

Comparing a company with its own history asks a sharper question: is this business doing better or worse than it normally does, and is that changing? Turning points often show there first, a quarter or two before the headline numbers look different.

How a filing becomes a phase

We read the filings

When a company files its 10-Q or 10-K, we extract a selected set of operating and profitability figures from the statements themselves, not from estimates, guidance or anybody's commentary.

We compare the company with itself

Each measure is scored against the company's own history, so zero is its own average, its typical level over its own history.

We place it in a phase and show our work

The level and direction of the score set the phase. We list what's driving it, what complicates it and what would change it.

The business underneath the price

Benjamin Graham pictured the stock market as a business partner called Mr. Market, who offers a new price every day, cheerful one day and gloomy the next. From one day to the next, that price can say little about the business. Over time, it tends to follow how the business is actually doing.

CycleIQ reads the business underneath the price: whether it is stronger or weaker than its own average, and which way it is heading. Strong businesses tend to carry their share prices up, and weakening ones tend to hold them down. In our tests, as a group, stocks of businesses that improved sharply outperformed the S&P 500 in about 4 of every 5 quarters, and those that weakened sharply trailed it in 5 of every 6 quarters. How we tested →

The four phases

RecoveryBelow its own average, and improving. Often looks like margins rebuilding after a low point, losses narrowing or growth picking up again. Investors usually check whether the improvement is broad or rests on a single line item.

ExpansionAbove its own average, and still improving. Growth and margins both run ahead of the company's history. Investors usually compare how long this has lasted with past expansions, and how much the share price already reflects.

ToppingAbove its own average, but momentum is fading. Results are still strong, but growth or margins are past their best. Investors usually check whether the fade is broad or a one-off, and whether costs are growing faster than revenue.

ContractionBelow its own average, and weakening. Growth is slowing or margins are shrinking relative to the company's history. A company can still be growing and be in Contraction if it's growing much more slowly than it usually does.

Companies usually move through the phases in this order, but not always. A sharp shock can send a company from Recovery straight back to Contraction.

How the four phases relatei

Every company sits somewhere in this cycle, measured against its own operating history, not against its peers or a price target. Companies usually move around it in this order, but not always.

How to read the chart

Every company page carries this chart. Sample data: the shapes and colors are the real ones.

Evidence

Does it hold up?

Our data holds quarterly results since 2014. We replayed every quarter from 2014 to mid-2026 to see how the readings held up, and how stock prices moved with them. The results, in plain words, are on Does it work?

Limits

What the method cannot tell you

A phase describes reported results against that company's own record. It carries no view on valuation, on what the market already expects, or on anything that has happened since the filing. Banks, lenders, insurers, REITs, exchanges, brokers and commodity pools aren't covered: their results turn on interest spreads, claim reserves, rent or trading volumes, so sales and cost margins don't describe their cycle. Energy, utilities and transportation companies, drug makers and biotech, and real estate, construction and hotel companies are covered, but their Price alignment carries a caution (⚠): their share prices often follow commodity prices, trial results or other forces outside the business. See the FAQ for the rest.

The cycle signalOne line for the whole business. It rises when the company is running stronger than its own record and falls when it is running weaker.

Its own averageThe dashed line is this company's own average, its typical level over its own history, not zero growth. A business that reliably grows 20% a year sits on it.

The phase shadingBackground color is the phase the company was in at that quarter. The dotted line marks the exact quarter it changed.

Cycle high and lowThe furthest this company has run from its own average in either direction, labeled with the quarter and the reading.

Where it stands nowThe latest quarter, ringed so it is the first thing you find.

The share priceQuarterly candles behind the signal, on their own axis at the right. Green closed up, red closed down; use them to see whether the market has followed the business.

Drag to zoomThe strip underneath holds the full history. Drag its edges to open up a few years. Green and red there show the stretches above and below its own average at a glance.