Garden Stage Ltd

Where It Passes

Where It Falls Short

• Cash Flow10% pass✓ 2✗ 10▾

  9 of 10 flag GSIW's cash flow — Buffett, Lynch, Piotroski +6 more

  Free Cash Flow Proxy

  ✗BuffettPositive and growing

  FCF Positive and Growing$-1.4M

  ✗LynchPositive and growing

  Operating Cash Flow$-4.2M

  ✗PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=-10.10%, ROA=-33.01%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)N/A (negative CFPS)

  ✗Dreman< 8x

  P/E or FCF YieldP/E=7.5x

  ✓PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive0/4 years FCF positive

  ✗MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap

  ✗Ackman>= 4%

  Price / FCF per Share

  ✗Ackman<= 25

  Positive Operating Cash Flow frequency0/5 years positive

  ✗SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures

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

  (Operating cash flow - capex) / market capitalization

  ✗OshaughnessyTop 10% of eligible cross-section
• Profitability13% pass✓ 7✗ 28▾

  14 of 16 flag GSIW's profitability — Graham, Buffett, Lynch +11 more

  Positive EPS (10 years)5/6 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)1566.7%

  ✓Graham>= 33% growth

  Net Income Positive (10+ years)0/6 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)-115.7%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)

  ✗BuffettStable or rising over 10 years

  Free Cash Flow Proxy

  ✗BuffettPositive and growing

  Earnings Variance (10-yr CoV)1.20

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

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

  Basic earnings-growth PEG (dividends excluded)0.06

  ✓Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR119.0%

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

  ROE-57.1%

  ✗Lynch> 15%

  EBIT / Enterprise Value

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=None, ROC=None

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets-33.01%

  ✗PiotroskiROA > 0

  ROA Change YoY-27.16% -> -33.01% (delta: -5.85%)

  ✗PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=-10.10%, ROA=-33.01%

  ✓PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY

  ✗PiotroskiImproved YoY

  Pre-Tax Income / Revenue-190.4%

  ✗Dreman>= 8%

  Net Income / Shareholders' Equity-57.1%

  ✗Dreman> 12%

  Margin of SafetyP/E=7.5x, P/B=4.3x

  ✓PabraiP/B < 1.5 or P/E < 15

  Return on Equity-57.0% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic Value-4.1% (IV=$10.00 vs Price=$10.41)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency0/5 years positive

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

  Operating Income / Revenue

  ✗Ackman>= 15%

  Net Income / Shareholders Equity-57.1%

  ✗Ackman>= 15%

  5-Year EPS CAGR119.0% CAGR over 4 years

  ✓Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend

  ✗TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trend

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

  Net income / market capitalization-90.90%; #5348/6340 (top 84.4%)

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

  Gross profit / total assets

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity-57.13%; #4292/5226 (top 82.1%)

  ✗AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.1221; #3721/5884 (top 63.2%)

  ✗AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR119.0% over 4 years

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years5/5 years positive

  ✓Schloss>= 70% positive over 5-10 observed years (app rule)
• Efficiency13% pass✓ 2✗ 9▾

  7 of 8 flag GSIW's efficiency — Graham, Buffett, Greenblatt +4 more

  Current Ratio1.72

  ✗Graham>= 2.0

  ROIC (3-5 yr avg)

  ✗Buffett> 10%

  ROIC - WACC

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)

  ✗Greenblatt> 25%

  Current Ratio Change YoY1.51 -> 1.72

  ✓PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY0.34x -> 0.17x

  ✗PiotroskiImproved YoY

  Current Assets / Current Liabilities1.72

  ✓Dreman> 1.5

  Return on Invested Capital

  ✗Munger> 15%

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

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

  Reinvestment Rate x ROIC

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)

  ✗SleepROIC > 12% in a majority of years
• Verdicts17% pass✓ 2✗ 10▾

  Split decision: 10 FAIL · 4 NEUTRAL · 2 PASS

  Overall verdict

  ✗GrahamFAIL (1/9)✗BuffettFAIL (0/9)✗LynchFAIL (2/7)•GreenblattNot ranked✗PiotroskiFAIL (F-Score 3)✓DremanPASS (5/11)✓MungerPASS (2/4)•PabraiNEUTRAL (2/3)✗AkreFAIL (0/6)✗MarksFAIL (1/5)✗AckmanFAIL (3/9)•TempletonNEUTRAL (5/8)✗SleepFAIL (1/6)•AsnessNEUTRAL (Not ranked)✗NeffFAIL (2/6)✗SchlossFAIL (3/7)•OshaughnessyNEUTRAL (Not ranked)
• Valuation models20% pass✓ 1✗ 4▾

  Models split on GSIW at $10.41 — fair values range $6.24–$34.50

  Graham fair value$8.67

  ✗Graham-20.1% margin vs $10.41

  Lynch fair value$34.50

  ✓Lynch+69.8% margin vs $10.41

  Dreman fair value$10.00

  ✗Dreman-4.1% margin vs $10.41

  Marks fair value$6.24

  ✗Marks-66.8% margin vs $10.41

  Templeton fair value$6.24

  ✗Templeton-66.8% margin vs $10.41
• Valuation23% pass✓ 9✗ 19▾

  10 of 13 flag GSIW's valuation — Graham, Greenblatt, Dreman +7 more

  Price / 3-yr avg EPS15.6x

  ✗Graham<= 15x

  Price-to-Book Ratio4.3x

  ✗Graham<= 1.5x

  P/E x P/B67.10

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)0.06

  ✓Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=None, ROC=None

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS7.5x

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

  Price / (CFO / Shares)N/A (negative CFPS)

  ✗Dreman< 8x

  Price / Book Value per Share4.3x

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

  Valuation ReasonablenessP/E=7.5x

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

  P/E or FCF YieldP/E=7.5x

  ✓PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical AverageP/E=7.5x, P/B=4.3x

  ✓MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic Value-4.1% (IV=$10.00 vs Price=$10.41)

  ✗Marks>= 20% below intrinsic value

  Price / FCF per Share

  ✗Ackman<= 25

  Price vs. Trailing Low114% of trailing low ($9.12)

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

  Net income / market capitalization-90.90%; #5348/6340 (top 84.4%)

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

  Positive book equity / market capitalization+1.5911; #848/6449 (top 13.1%)

  ✓AsnessTop 30% of eligible cross-section

  Price / Diluted EPS7.5x

  ✓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 Share7.93x

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change

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

  Revenue / market capitalization+0.4781; #2686/5247 (top 51.2%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date-44.66%; #4972/6202 (top 80.2%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Growth38% pass✓ 7✗ 6▾

  5 of 8 flag GSIW's growth — Lynch, Marks, Ackman +2 more

  EPS Growth (3-yr avg, 10-yr window)1566.7%

  ✓Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)0.06

  ✓Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR119.0%

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

  Inventory Growth vs Revenue GrowthInv: new vs Rev: 33.2%

  ✗LynchInventory growth < Revenue growth

  EPS Growth Direction$0.06 (2021) -> $1.38 (2025)

  ✓DremanPositive over recent years

  EPS CAGR119.0% CAGR over 4 years

  ✓Dreman> 5% annualized

  Positive Net Income Frequency0/5 years positive

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

  3yr Median Revenue Growth33.2%

  ✓Ackman>= 5%

  Positive EPS Growth Frequency2/4 years with positive EPS growth

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

  5-Year EPS CAGR119.0% CAGR over 4 years

  ✓Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trend

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

  5-year Revenue CAGR

  ✗SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR119.0% over 4 years

  ✗Neff7%-20% annualized
• Debt & Leverage42% pass✓ 7✗ 8▾

  7 of 12 flag GSIW's debt & leverage — Graham, Buffett, Lynch +4 more

  LT Debt vs Net Current Assets

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: 0.64, IC: N/A

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

  Total Debt / Equity0.64

  ✗Lynch< 0.33

  Cash - Long-term Debt

  ✗LynchPositive preferred

  LT Debt / Total Assets Change0.00% -> 0.00%

  ✓PiotroskiDecreased YoY

  Current Assets / Current Liabilities1.72

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

  Total Debt / Shareholders' Equity0.64

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

  Debt Levels0.64

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

  Interest Coverage & Debt/EBITDA

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

  Total Debt / Shareholders Equity0.64

  ✓Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)-0.6390; #2730/4210 (top 64.8%)

  ✗AsnessTop 30% of eligible cross-section