GF Score Analysis: A Deep Dive into RELX PLC's Performance
RELX PLC (NYSE:RELX), a prominent player in the Business Services industry, is currently trading at $34.05 with a market capitalization of $64.46 billion. The stock has seen a gain of 3.75% today and a 3.12% increase over the past four weeks. In this article, we will analyze RELX's GF Score of 83/100, which indicates good outperformance potential. The GF Score is a comprehensive stock performance ranking system developed by GuruFocus, which considers five key aspects of valuation: Financial Strength, Profitability Rank, Growth Rank, GF Value Rank, and Momentum Rank.
Financial Strength Analysis
RELX's Financial Strength rank stands at 5/10. This metric evaluates the robustness of a company's financial situation, considering factors such as debt burden, debt to revenue ratio, and Altman Z-Score. RELX's interest coverage of 13.46 suggests a comfortable ability to service its debt. The company's debt to revenue ratio of 0.86 and Altman Z score of 3.25 further reinforce its financial stability.
Profitability Rank Analysis
The company's Profitability Rank is 8/10, indicating strong profitability. This rank is determined by factors such as operating margin, Piotroski F-Score, trend of operating margin, consistency of profitability, and Predictability Rank. RELX's Operating Margin of 26.69% and Piotroski F-Score of 7 suggest a healthy profit margin and a strong financial position. The company has also demonstrated consistent profitability over the past 10 years.
Growth Rank Analysis
RELX's Growth Rank is 6/10, reflecting moderate growth in terms of revenue and profitability. The company's 5-year revenue growth rate is 2.70%, and its 3-year revenue growth rate is 3.30%. The 5-year EBITDA growth rate stands at 3.30%, indicating steady growth in the company's business operations.
GF Value Rank Analysis
The company's GF Value Rank is 5/10, suggesting that the stock is fairly valued. This rank is determined by the price-to-GF-Value ratio, a proprietary metric calculated based on historical multiples and an adjustment factor based on a company's past returns and growth.
Momentum Rank Analysis
RELX's Momentum Rank is 9/10, indicating strong momentum in the stock's price performance. This rank is determined using the standardized momentum ratio and other momentum indicators.
Competitor Analysis
When compared to its main competitors, Rentokil Initial PLC (GF Score: 78), Intertek Group PLC (GF Score: 80), and Serco Group PLC (GF Score: 73), RELX holds a competitive edge with a higher GF Score of 83.
Conclusion
In conclusion, RELX PLC's strong GF Score of 83/100, backed by its robust financial strength, profitability, growth, fair valuation, and strong momentum, suggests good outperformance potential. Investors should consider these factors when making investment decisions. However, as with any investment, it's crucial to conduct thorough research and consider the company's future prospects.
This article first appeared on GuruFocus.
