Process & Philosophy
Glossary
RBP
The revenue growth necessary to support the current stock price. Required Business Performance® is calculated using third-party valuation models including discounted cash flow that use the current stock price as the primary input.
RBP Probability
The likelihood that management will deliver the Required Business Performance® to support the stock price. It is calculated by fitting the company’s historical revenue growth to a distribution, then finding the company’s Required Business Performance within this historical distribution.
RBP Methodology
Uses third-party valuation models including discounted cash flow to determine what the stock’s current price implies in terms of future free cash flow and revenue (Required Business Performance® ) as well as the calculation of the likelihood that management can deliver the Required Business Performance®, known as RBP® Probability.


RBP® Probability

The probability management will deliver the Required Business Performance® to support the stock price is called RBP Probability. The RBP Probability, provides an objective, disciplined, rules-based way of measuring the probability that management will deliver the Required Business Performance.