Long-established in the Insurance industry, Reliance Global Group Inc (RELI, Financial) has enjoyed a stellar reputation. It has recently witnessed a surge of 15.91%, juxtaposed with a three-month change of -53.67%. However, fresh insights from the GuruFocus Score Rating hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of Reliance Global Group Inc.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- 1. Financial strength rank: 2/10
- 2. Profitability rank: 4/10
- 3. Growth rank: 5/10
- 4. GF Value rank: 2/10
- 5. Momentum rank: 3/10
Based on the above method, GuruFocus assigned Reliance Global Group Inc the GF Score of 56 out of 100, which signals poor future outperformance potential.
Understanding Reliance Global Group Inc Business
Reliance Global Group Inc operates as a holding company with diversified interests in the insurance market, as well as other related sectors. The company focuses on growing by pursuing an acquisition strategy, initially and primarily focused on wholesale and retail insurance agencies. Its primary strategy is to identify specific risks to reward arbitrage opportunities and develop these on a national platform, thereby increasing revenues and returns, and then identify and acquire undervalued wholesale and retail insurance agencies with operations in growing or underserved segments, expand and optimize their operations, and achieve asset value appreciation while generating interim cash flows. It generates revenue in the form of commissions.
Financial Strength Breakdown
Reliance Global Group Inc's financial strength indicators present some concerning insights about the company's balance sheet health. The company's Altman Z-Scoreis just -1.87, which is below the distress zone of 1.81. This suggests that the company may face financial distress over the next few years. Additionally, the company's low cash-to-debt ratio at 0.08 indicates a struggle in handling existing debt levels.
Profitability Breakdown
Reliance Global Group Inc's low Profitability rank can also raise warning signals. Additionally, Reliance Global Group Inc's Gross Margin has also declined over the past five years, as evidenced by the data: 2019: 32.11; 2020: 28.41; 2021: 26.88; 2022: 28.52; . This trend underscores the company's struggles to convert its revenue into profits.
Next Steps
Given the company's financial strength, profitability, and growth metrics, the GuruFocus Score Rating highlights the firm's unparalleled position for potential underperformance. It's crucial for investors to consider these factors when making investment decisions. GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
