Products & Services:
Have you used their products and services? What was your experience?
Who do they sell to? Consumers? Businesses? Government?
What is the price point of their products and services?
How have these products and services evolved over the past few years?
Would you recommend their products and services to a friend?
How do they make money?
Are their revenues transactional or recurring?
How has the business model changed over the past few years?
What do you like about their business model?
What don’t you like about their business model?
Who are their main competitors?
Are they bigger or smaller?
Who has the most market share?
How many of the main competitors or publicly traded?
How many of the main competitors are privately held?
Are any of their main competitors VC backed?
Do they have better products and services
Do they have a better management team?
Do they have more customers?
Do they have bigger customers?
Do they have more loyal customers?
Are they growing faster?
Do they have a stronger balance sheet?
Have they already expanded internationally?
Do they spend more on R&D?
Do they have cheaper prices?
Do they have better margins?
Do they have better sales and marketing?
Do they have better distribution?
Do they have a stronger brand?
Who is on the management team?
How long has the management team been with the company?
Are the founders still involved?
How much equity does management own?
How is management compensated?
Are mutual funds accumulating shares?
Are hedge funds accumulating shares?
Are there any activist investors involved?
If it’s a recent IPO do the VC’s still own shares? If so. when will they be selling? What are the lockups?
What are the company’s reviews and ratings on sites like Glassdoor, Facebook, Yelp, etc.?
What are former employees saying about the company, culture, management?
What are customers saying about the company?
What is the company’s Net Promoter Score (NPS)?
What percentage of customers are likely to recommend the company’s products?
What are people saying about the company on social media and blog sites?
Doing some Twitter, Google and YouTube searches might provide useful insights
Do they operate internationally?
How many global offices do they have?
What percentage of their revenues come from international markets?
Are their margins higher or lower on international revenues?
Do they still have the same competitive advantages in international markets?
Do these international markets introduce increased legal or political concerns?
Is there any significant currency risk to those international revenues?
Do they have to pay extra taxes to repatriate those international profits back to the primary country?
How is the sector doing?
How big is the sector?
Is the sector growing or shrinking?
What forces or trends are causing the sector to grow or shrink?
Are these short term or long term?
Will you still like this sector in 3–5 years?
Is this company already the market leader in their sector?
Or are they trying to catch the market leader?
If they are chasing the market leader, what would it take to catch them?
How has the industry or sector changed over the past 1–5 years?
Is the overall sector innovating and moving faster than your company is? Which means they are more likely to get passed by competitors.
Total Addressable Market (TAM):
How big is the company’s TAM (total addressable market)?
How rapidly is the TAM growing?
What trends or forces are causing growth in the TAM?
How many sectors does the company operate within that make up their TAM?
What is their TAM domestically versus internationally?
Is the TAM big enough for multiple companies to succeed?
If the TAM is shrinking can this company beat out their competitors to keep market share?
Will the size of the TAM attract additional competitors in the coming years?
Legal & Political:
Do some google searches to see what comes up? Most large companies are always involved in a lawsuit of some nature so this is not necessarily a red flag.
Research & Development:
Has this company been successfully developing and launching new products and services?
How much do they invest into R&D every year?
What % of revenues and profits is spent on R&D?
How many patents have been filed and/or issued in the last few years?
Will any of these new products and services accelerate revenues in a meaningful way?
Are these new products and services not being reflected yet in the analysts estimates therefore opening the door for an upside surprise?
Will any of these new products and services increase the TAM?
Do these new products and services need to be successful for the company to maintain their current growth rate?
Is the company involved in any strange business practices or accounting irregularities?
Who accounting firm(s) and/or auditor(s) do they use?
Have there been any allegations in the past that should raise concerns?
Can you trust the numbers being reported by the company? Is the company based in China where financial reporting standards are less strict than other regions.
What are the analysts saying about this company?
How many analysts cover the company? I’d suggest staying away from companies with less than 4 analysts covering the company.
What are the ratings from analysts? How many buy, hold, sell ratings?
What are the price targets from analysts compared to where the stock is currently trading?
What are the 3–5 most positive things being said by the analysts?
What are the 3–5 most negative things being said by the analysts?
Do these analysts seem credible given their recent track records?
What were the last 2–3 years of revenues? Growth rate?
What are projected revenues for next year? Growth rate?
What are the gross profit margins? Going up or down?
What are the EBITDA margins? Going up or down?
What are the net operating margins? Going up or down?
What is the net income or profits? Increasing or decreasing?
What is the free cash flow yield?
What is return on equity? Return on assets?
Any significant capital expenditures?
What is the EPS (earnings per share)? Increasing or decreasing?
How much debt and cash on the balance sheet?
Has the company been issuing debt or buying back existing debt?
Has the company been issuing stock or buying back stock?
Does the company pay a dividend?
Is that dividend safe?
Has the dividend increased or decreased in recent quarters?
What is the current market cap? Enterprise value?
What is the company’s credit rating?
How do all these financial metrics compare to their peers/competitors?
What do the stock charts look like over the past 1 month, 3 months, 6 months, 12 months, 2 years, 3 years, 5 years, 10 years?
What were some of the biggest drawdowns over the past 10 years?
What caused those drawdowns?
What has been the average annual stock performance over the past 1, 3, 5, 10 years or since the company came public?
How has the stock performance been compared to their peers, their sector and the broad market indexes?
What is the company’s current P/E multiple? P/S multiple? PEG ratio?
How do these multiples and ratios compare to their peers?