Percentile Ranks Explained: Compare Stocks Like a Pro

A simple way to compare a company to its sector peers. Percentile ranks show where a company stands on a 0–100 scale, making analysis fair, intuitive, and beginner-friendly.

On this page

1. Overview

Percentile ranks show how a company performs relative to others in the same sector. The result is a clean 0–100 score that keeps comparisons fair and easy to understand.

2. Why Percentiles Matter

Different sectors have different norms. Percentiles fix this by comparing each company only to its peers, so you never misread a metric just because the industry profile is different.

3. What Each Percentile Means

4. How Percentiles Are Calculated

  1. Collect all companies in the sector.
  2. Sort them from lowest to highest for the metric.
  3. Find the company’s position.
  4. Convert that position into a percentile.

5. Examples

6. Why Percentiles Beat Raw Numbers

Percentiles instantly answer: Is this number good? Compared to whom? In what context? That removes guesswork and keeps the analysis consistent.

7. How Percentiles Improve the Score

Percentiles feed directly into the Financial Health Score, making it clearer where a company is strong, weak, or showing red flags.

Summary

Percentile ranks turn raw financial data into clear, fair, and easy-to-understand insights. They make comparisons simple and help beginners understand fundamentals instantly.

Visual Example: Percentile Distribution

ROE Distribution in Technology Sector (100 companies):

0%
25th
50th
75th
100th

Example Companies:

→ The gradient shows performance distribution. Companies at the right (green) are top performers. Learn how this feeds into the Financial Health Score.

Frequently Asked Questions

Q: What is a percentile rank in investing?

It shows how a stock compares to all other stocks. A 90th percentile means it's stronger than 90% of companies.

Q: Why use percentiles instead of raw numbers?

Percentiles make different metrics comparable and easier to interpret. Learn more in our Financial Health Score guide.

Q: What is a "good" percentile rank?

Higher is better. Anything above 70 is typically strong.

Q: Do percentile ranks change often?

Yes — they update as new data comes in or as the market shifts.

Q: Can percentile ranks be used for stock picking?

They help identify strong or weak companies, but should be combined with valuation analysis and other research.

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