Black Rock Coffee Bar, Inc.

Where It Passes

Where It Falls Short

• Profitability0% pass✓ 3✗ 32▾

  No clean pass — all 16 investors flag at least one profitability criterion

  Positive EPS (10 years)0/3 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)0/3 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)-0.1%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)

  ✗BuffettStable or rising over 10 years

  Free Cash Flow Proxy$-2.8M

  ✗BuffettPositive and growing

  Earnings Variance (10-yr CoV)

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  ROE5.7%

  ✗Lynch> 15%

  EBIT / Enterprise Value4.2%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=4.2%, ROC=9.9%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets-0.02%

  ✗PiotroskiROA > 0

  ROA Change YoY-3.38% -> -0.02% (delta: +3.37%)

  ✓PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=0.65%, ROA=-0.02%

  ✓PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY28.0% -> 29.3%

  ✓PiotroskiImproved YoY

  Pre-Tax Income / Revenue3.8%

  ✗Dreman>= 8%

  Net Income / Shareholders' Equity5.7%

  ✗Dreman> 12%

  Margin of SafetyP/B=4.0x

  ✗PabraiP/B < 1.5 or P/E < 15

  Return on Equity-0.1% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency0/3 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue4.8%

  ✗Ackman>= 15%

  Net Income / Shareholders Equity5.7%

  ✗Ackman>= 15%

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend1.5% (2023) -> 0.4% (2025)

  ✗TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendgross margin 24.7% -> 29.3%, operating margin 1.5% -> 0.4%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  Net income / market capitalization+1.52%; #2844/6340 (top 44.9%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Gross profit / total assets+17.46%; #2240/3702 (top 60.5%)

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity+5.73%; #2375/5226 (top 45.4%)

  ✗AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA

  ✗AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years

  ✗Schloss>= 70% positive over 5-10 observed years (app rule)
• Valuation0% pass✗ 28▾

  All 13 investors flag BRCB's valuation

  Price / 3-yr avg EPS

  ✗Graham<= 15x

  Price-to-Book Ratio4.0x

  ✗Graham<= 1.5x

  P/E x P/B

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value4.2%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=4.2%, ROC=9.9%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS

  ✗Dreman< 12x✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)83.9x

  ✗Dreman< 8x

  Price / Book Value per Share4.0x

  ✗Dreman< 1.2x✗Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Valuation ReasonablenessOE Yield=-12.4%

  ✗MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldFCF Yield=-13.2%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical AverageP/B=4.0x

  ✗MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Price / FCF per ShareN/A (negative FCF)

  ✗Ackman<= 25

  Price vs. Trailing Low152% of trailing low ($7.10)

  ✗Templeton<= 120% of trailing low (certified split-adjusted live window)

  Net income / market capitalization+1.52%; #2844/6340 (top 44.9%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive book equity / market capitalization+0.2659; #3857/6449 (top 59.8%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E

  ✗Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per Share6.02x

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change

  ✗SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+0.9627; #1809/5247 (top 34.5%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization-12.06%; #3309/4519 (top 73.2%)

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date-23.69%; #4149/6202 (top 66.9%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Growth0% pass✓ 2✗ 11▾

  No clean pass — all 8 investors flag at least one growth criterion

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthInv: 41.0% vs Rev: 24.5%

  ✗LynchInventory growth < Revenue growth

  EPS Growth Direction

  ✗DremanPositive over recent years

  EPS CAGR

  ✗Dreman> 5% annualized

  Positive Net Income Frequency0/3 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth22.7%

  ✓Ackman>= 5%

  Positive EPS Growth Frequency

  ✗AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendgross margin 24.7% -> 29.3%, operating margin 1.5% -> 0.4%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR22.7%

  ✓SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized
• Efficiency0% pass✓ 1✗ 10▾

  No clean pass — all 8 investors flag at least one efficiency criterion

  Current Ratio0.64

  ✗Graham>= 2.0

  ROIC (3-5 yr avg)1.6%

  ✗Buffett> 10%

  ROIC - WACC-8.4%

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)9.9%

  ✗Greenblatt> 25%

  Current Ratio Change YoY0.58 -> 1.04

  ✓PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY0.76x -> 0.60x

  ✗PiotroskiImproved YoY

  Current Assets / Current Liabilities0.64

  ✗Dreman> 1.5

  Return on Invested Capital8.6%

  ✗Munger> 15%

  ROIC (high and growing)FY2023: ROIC=unavailable; FY2024: ROIC=unavailable; FY2025: ROIC=1.0%

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROICN/A (non-positive net income)

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)0/1 years above 12% (latest 1.0%)

  ✗SleepROIC > 12% in a majority of years
• Verdicts0% pass✗ 14▾

  Split decision: 13 FAIL · 3 NEUTRAL

  Overall verdict

  ✗GrahamFAIL (1/9)✗BuffettFAIL (0/9)✗LynchFAIL (0/7)✗GreenblattRank #1502•PiotroskiNEUTRAL (F-Score 6)✗DremanFAIL (1/11)✗MungerFAIL (1/4)✗PabraiFAIL (0/3)✗AkreFAIL (0/6)✗MarksFAIL (0/5)✗AckmanFAIL (2/9)✗TempletonFAIL (2/8)✗SleepFAIL (2/6)•AsnessNEUTRAL (Not ranked)✗NeffFAIL (1/6)✗SchlossFAIL (2/7)•OshaughnessyNEUTRAL (Not ranked)
• Cash Flow20% pass✓ 3✗ 9▾

  8 of 10 flag BRCB's cash flow — Buffett, Lynch, Dreman +5 more

  Free Cash Flow Proxy$-2.8M

  ✗BuffettPositive and growing

  FCF Positive and Growing$-32.7M

  ✗LynchPositive and growing

  Operating Cash Flow$2.2M

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=0.65%, ROA=-0.02%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)83.9x

  ✗Dreman< 8x

  P/E or FCF YieldFCF Yield=-13.2%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive0/3 years FCF positive

  ✗MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap-16.3%

  ✗Ackman>= 4%

  Price / FCF per ShareN/A (negative FCF)

  ✗Ackman<= 25

  Positive Operating Cash Flow frequency3/3 years positive

  ✓SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures$-29.9M

  ✗Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization-12.06%; #3309/4519 (top 73.2%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Debt & Leverage25% pass✓ 5✗ 10▾

  9 of 12 flag BRCB's debt & leverage — Graham, Buffett, Lynch +6 more

  LT Debt vs Net Current AssetsLT Debt $36.7M vs NCA $-15.5M

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: 0.59, IC: 0.1x

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / Equity0.58

  ✗Lynch< 0.33

  Cash - Long-term Debt$-23.1M

  ✗LynchPositive preferred

  LT Debt / Total Assets Change41.93% -> 7.70%

  ✓PiotroskiDecreased YoY

  Current Assets / Current Liabilities0.64

  ✗Dreman> 1.5✗SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity0.58

  ✓Dreman< 0.8✓Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✓SchlossD/E < 1.00x

  Debt Levels0.58

  ✗MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3

  Interest Coverage & Debt/EBITDAIC=0.1x, D/EBITDA=2.0x

  ✗MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity0.58

  ✓Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)-0.5774; #2619/4210 (top 62.2%)

  ✗AsnessTop 30% of eligible cross-section