Estia Health (ASX:EHE) GF Value Rank : 3 (As of Apr. 25, 2024)

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What is Estia Health GF Value Rank?

Estia Health has the GF Value Rank of 3.

The GF Value Rank is determined by the price-to-GF-Value (P/GF Value) ratio, a proprietary metric calculated based on historical multiples along with an adjustment factor based on a company's past returns and growth and future estimates of the business' performance.

GuruFocus found that for valuation, we cannot simply give stocks a better GF Value rank simply because they have a lower P/GF Value ratio. Backtesting shows that over the long term, the two worst-performing groups are the most expensive group (with the highest P/GF Value ratio) and the least expensive group (with the lowest P/GF Value ratio).

We can understand why the most expensive group underperforms. We were initially puzzled by the underperformance of the least expensive group, but we realized there is a reason why some stocks are super cheap. If they look too undervalued, it is often because the businesses behind them are poor quality. The market realized this and gave them low valuations. In a way, the market is efficient.

After multiple backtesting analyses, we granted the stocks in third-cheapest percentile the highest GF Value rank, as they have performed the best over a full market cycle. Stock performance is actually not as sensitive to valuation as it is to growth and profitability. On average, the companies in the 20%-50% valuation groups have similar performances. Therefore, we should avoid the most expensive and the least expensive stocks. We can be more tolerant of valuation.

Please click GF Score to see more details on the GF Score's 5 Key Aspects of Analysis.

Competitive Comparison of Estia Health's GF Value Rank

For the Medical Care Facilities subindustry, Estia Health's GF Value Rank, along with its competitors' market caps and GF Value Rank data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Estia Health's GF Value Rank Distribution in the Healthcare Providers & Services Industry

For the Healthcare Providers & Services industry and Healthcare sector, Estia Health's GF Value Rank distribution charts can be found below:

* The bar in red indicates where Estia Health's GF Value Rank falls into.

Estia Health GF Value Rank Related Terms

Thank you for viewing the detailed overview of Estia Health's GF Value Rank provided by GuruFocus.com. Please click on the following links to see related term pages.

Estia Health (ASX:EHE) Business Description

Industry

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Comparable Companies

Traded in Other Exchanges

N/A

Address

227 Elizabeth Street, Level 9, Sydney, NSW, AUS, 2000

Website

https://www.estiahealth.com.au

Estia Health Ltd operates residential aged care facilities in Australia. The company conducts its business through regional networks of facilities located in Victoria, South Australia, New South Wales, and Queensland. Estia's facilities provide clinical care services, daily living services, and accommodations to its residents. Its clinical care services include 24-hour nursing care, personal care, wound management, administering pharmaceuticals, physiotherapy and occupational therapy, and arranging visits from external medical practitioners. Funding from the Australian government contributes the majority of Estia's revenue.

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