FRAMEWORKS / GROWTH / GROWTH AT A REASONABLE PRICE
LENS 02 · GROWTH
Growth at a Reasonable Price framework, explained
IN THE TRADITION OF PETER LYNCH'S CLASSIFICATION-FIRST APPROACH
Growth at a Reasonable Price classifies a company before it compares it. A slow grower, a fast grower, a cyclical and a turnaround are each judged against their own category, and the price paid for growth is disciplined by the relationship between the valuation multiple and the growth rate. The filing read tests whether the category and the story hold up.
What it looks for
Earnings growth with a price that's proportionate to it, balance-sheet sanity, and category-appropriate thresholds.
Which classification the filings actually support, whether the growth story and the reported numbers agree, and what could end it.
The quantitative screen looks for earnings growth with a price proportionate to it, a sane balance sheet and thresholds appropriate to the company’s category, rather than one standard for every business.
The AI read decides which category the filings actually support, whether the growth story management tells matches the reported numbers, the quality of that growth, balance-sheet strength, valuation relative to growth, and what insider transactions and recent results disclose.
Filings it reads
Every claim in a verdict cites one of these, by form, section and date. Anything they do not disclose is marked unknown rather than inferred.
| What is read | Why this framework reads it |
|---|---|
| 10-K: Business (Item 1) | What the company sells, to whom, and how it competes. |
| 10-K: Risk factors (Item 1A) | The risks the company itself says are material. |
| 10-K: MD&A (Item 7) | Management’s explanation of what drove the results. |
| 10-K: Financial statements and notes (Item 8) | The audited numbers the rest of the read is checked against. |
| 10-K notes: goodwill and intangibles | Whether growth was earned or acquired. |
| Latest 10-Qs: financial statements, MD&A and risk-factor updates | Whether the growth rate is holding in the most recent quarters. |
| Form 4 insider transactions | What insiders have done with their own shares, read alongside the growth story. |
What each verdict means
A verdict describes how well a company’s filings fit this framework, as of the filings read. It is never a prediction and never an action to take.
- GEMSTONE
- The filings support the category, a growth story that matches the numbers and a price proportionate to the growth.
- GEODE
- The growth is real, but the category, its quality or the story behind it is mixed or unverifiable in the filings.
- SEDIMENT
- The filings contradict the growth story, or the price is out of proportion to the growth they show.
When the filings cannot support any verdict, none is issued: the company is shown as Not scored.
What this framework misses
- Classification is a judgment, and a company can sit between categories. The verdict names the category it applied.
- The tradition values knowing a business firsthand. A filing read covers what the company discloses, not what a reader might see in its stores or products.
- Growth rates are measured from past filings. A story that is about to end may not show in them yet.
Terms used here
Other frameworks in the growth lens
This framework can be forked in the Strategy Lab. The growth lens page compares it with the other frameworks in its lens, and the how it works page walks through a complete read. Framework titles describe the method; practitioner names appear only as attribution — no methodology here is endorsed by or affiliated with the practitioners named.