Revenue Quality Decomposer
A growth rate is not a story. Where the dollars come from is.
This sits next to step 4 on How to Research a Stock and the earnings boxes on the checklist. You can do it from the segment note. Framework 14 is the same split, written up.
When to run it
- When growth is the whole pitch.
- When the company just bought a chunk of its growth.
- When one segment is carrying a ticker that still talks like another business.
Do not run Framework 14 before Framework 01. If you cannot name the segments, a decomposition will just sound precise.
What the write-up is supposed to contain
A Framework 14 output should force:
- Revenue split by activity, not by slogan
- What is recurring, usage-based, or one-time
- What grew because customers bought more vs because a deal closed
- Whether one customer or one geography is doing too much of the work
- One sentence: this growth should / should not persist if the easy year ends
If the output is "strong revenue growth" with no split, the run failed.
What this framework cannot do
- It does not prove earnings are cash. That is Framework 04.
- It does not value the stock. That is Framework 03.
- It does not write the thesis. That is Framework 05.
- It does not make 20% better than 8%. Durable 8% beats borrowed 20%.
- It is not a buy rating.
Walkthrough: AMZN as a first 14
Notes a first decomposition should produce
- Three different top lines under one ticker: the store (transactional, huge, thin), AWS (usage, the profit engine), ads (attached to the store's traffic).
- Prime is the recurring wrap on the store. It is not the same thing as AWS.
- A year when the store is "back" and AWS is quiet is not the same company-year as the reverse. The press release will try to average them.
- Acquired growth is not the current story here the way it is at a serial roll-up. Do not invent it. Do not ignore it if a deal shows up later.
Still open: the exact profit mix across those lines, off the page, without a filing in front of me. That gap is the point of running 14 — not a number to fake.
Handwritten version: How to Analyze a Stock, sections 1 and 4.
Full published run: AMZN analysis.
Do it yourself, then run 14
Before a credit:
- Open the latest 10-K segment / revenue footnote.
- Split last year's sales into two or three buckets you can name.
- Mark each bucket recurring, usage, or one-time.
- Cover the ticker. If the growth story needs the buckets mixed together to sound good, write that down.
Then run Framework 14.
Common questions
Is this the same as earnings quality?
No. 04 is cash vs accounting profit. 14 is whether the sales that produced those profits will still be there.
The company grew 20%. Done?
Not until you know how much of that 20% was a deal, a one-time pass-through, or one customer.
What do I run next?
Framework 04 if you have not put cash next to earnings. Framework 01 if the segments are still fuzzy. Stop after that.
Run Revenue Quality Decomposer
Same split as the segment note. Live filings instead of a blended growth rate. This is the optional faster pass — not a substitute for naming the buckets.
Try AlphaLens Free → Use code REDDIT-FREE-TRIAL · No card required · Then $39/mo or $299/yrThen write the buckets. Or stop averaging.