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Elevance Health Inc Receives Strong Rating from Guru Model

Elevance Health Inc has garnered a 72% rating from a respected guru model based on its fundamentals and valuation, showcasing strong profitability indicators, though it failed to meet the Return on Equity criteria. This mixed performance could lead to fluctuations in stock prices.

Date: 
AI Rating:   6

The report highlights that Elevance Health Inc (ELV) is rated at 72% based on the Patient Investor model, which is inspired by Warren Buffett’s investment principles. This high rating indicates that the company possesses long-term, predictable profitability and maintains low debt levels. Although a rating above 80% is generally indicative of significant interest, 72% still reflects a relatively strong performance.

Key assessments from the report include:

  • Earnings Predictability: The stock passes this criterion, suggesting that earnings can be anticipated consistently over time, which is an encouraging sign for investors looking for stable returns.
  • Return on Equity (ROE): ELV fails this test, which could be a potential concern for investors focused on how effectively the company is using equity to generate profit.
  • Return on Assets (ROA): The stock passes this test, indicating good management of assets to generate earnings.
  • Free Cash Flow (FCF): ELV passes this criterion, suggesting that the company has sufficient liquidity to fund business operations and investments, which is a positive signal.
  • Use of Retained Earnings: ELV passes this test, indicating effective reinvestment into the company for growth purposes.
  • Share Repurchase: The report notes that it passes this criterion, which may reflect the management's commitment to returning value to shareholders.
  • Initial Rate of Return: ELV passes this test, showing potential for good returns on investment.
  • Expected Return: The company also passes this criterion, which suggests positive future growth expectations.

Overall, while the failures in Return on Equity could raise red flags for some investors, the positive results in other areas like Earnings Predictability and Free Cash Flow provide a mixed understanding of its future performance.

Stocks:  ELV