The fallen angel screen: what actually has to clear it
A beaten-down stock isn't a screen. Here are the six exact conditions Zorro Trade's fallen angel preset checks, walked through with a real 2026 name.
A pullback isn't a fallen angel
"Down a lot from its highs" describes hundreds of stocks in any given month, for hundreds of different reasons — some are cheap, most are cheap for a reason. It's the same instinct that makes a freshly-priced IPO trading well under its debut level on the recent-IPO board look interesting for the wrong reasons: a big drop alone says nothing about the business underneath it. The fallen angel preset on the screener exists to separate the two, and it does it with six conditions that all have to hold at once, not a vibe about a chart. Below is exactly what the code checks, and a real name from today's universe that clears every line of it.
The six conditions
The preset's test function, unchanged since the screens were rebuilt in August, requires all of the following simultaneously:
| Condition | Threshold | What it rules out |
|---|---|---|
| 52-week range position | ≤ 25% | Stocks that have already recovered |
| Off 52-week high | ≥ 30% | A shallow dip, not a real drawdown |
| Trailing EPS | > 0 | Money-losers riding a narrative down |
| Revenue growth | ≥ 0% | A shrinking business, not a cyclical one |
| ROIC | ≥ 5% | Capital that isn't earning its keep even before the crash |
| Debt/equity | < 2.5 (or not reported) | A balance sheet that can't survive the wait |
Two of these are doing the real work. Range position and off-high sound redundant but aren't: a stock can sit in the bottom quartile of a tight 52-week range without being down much at all, and a stock can be down 30% from its high while sitting mid-range if the range itself is wide. Requiring both means the stock has to be both structurally near its low and meaningfully off its peak — not just one or the other.
The other four exist to keep this from being a screen for falling knives. EPS and revenue growth ask "is the business still working," not "is the stock still working." ROIC ≥ 5% is a low bar deliberately — as this site laid out when comparing ROIC to ROE, it's the metric that survives leverage, so a low ROIC floor here is a check for "not actively destroying capital," not "is a compounder." The debt ceiling exists because a beaten-down stock with a stretched balance sheet is the one likeliest to need a dilutive raise before the market comes back around.
A name that clears all six today
Nike is the cleanest current example. The stock trades at $35.58 against a 52-week range of $35.35–$76.97 — a 53.8% decline from its high, and a range position of roughly 0.6%, meaning it's sitting essentially at the 52-week low, not just somewhere in the bottom quartile.
On the business side: fiscal 2026 revenue (year ended May 31) came in essentially flat, up 0.2% year over year — not growth, but not the contraction the screen would reject either. Trailing earnings are positive, with a net margin of 6.7%. Return on invested capital is 10.7%, twice the preset's floor. Debt-to-equity sits at 0.74, well under the 2.5 ceiling.
That's six for six. Worth noting what the screen does not ask: net income actually fell 3.4% for the year, and EPS growth was slightly negative. The fallen angel preset has no earnings-growth test — it only asks that the company currently earns money and isn't shrinking on the top line. A stock can clear it while its profits are moving the wrong way, as long as revenue isn't and the balance sheet can absorb it. That's a real limitation to know about before treating a match as anything more than "passes six specific filters."
What the screen is actually for
None of this is a prediction that a name matching the preset will recover — nothing in Zorro Trade's screens forecasts price. What the six conditions do is turn "this stock got cheap" into "this stock got cheap while still meeting a specific, checkable bar for profitability, growth direction, capital efficiency and balance-sheet risk." That's a narrower claim, and it's the one worth being precise about. The screener runs this preset against the live universe, and the same six-condition logic is what feeds the hourly alert agent, so a saved fallen angel screen and its email alerts are checking the identical thing — not two versions that have quietly drifted apart.
The broader lesson generalizes past this one preset: any screen worth trusting should be legible enough that you could write out its conditions from memory and know exactly what a match does and doesn't tell you. If a preset's logic can't be stated in six lines, it's worth asking what it's actually filtering for.