We assign a fundamental rating of 4 out of 10 to SOLV. SOLV was compared to 184 industry peers in the Health Care Equipment & Supplies industry. While SOLV is still in line with the averages on profitability rating, there are concerns on its financial health. SOLV is not valued too expensively and it also shows a decent growth rate.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

SOLV had positive earnings in the past year.
In the past year SOLV had a positive cash flow from operations.

1.2 Ratios

SOLV's Return On Assets of 10.91% is amongst the best of the industry. SOLV outperforms 95.11% of its industry peers.
The Return On Equity of SOLV (30.57%) is better than 98.91% of its industry peers.
SOLV's Return On Invested Capital of 5.13% is fine compared to the rest of the industry. SOLV outperforms 76.63% of its industry peers.
The Average Return On Invested Capital over the past 3 years for SOLV is in line with the industry average of 8.81%.
The last Return On Invested Capital (5.13%) for SOLV is well below the 3 year average (9.85%), which needs to be investigated, but indicates that SOLV had better years and this may not be a problem.

		Industry Rank	Sector Rank
ROA	10.91%
ROE	30.57%
ROIC	5.13%

ROA(3y)7.62%

ROA(5y)N/A

ROE(3y)13.05%

ROE(5y)N/A

ROIC(3y)9.85%

ROIC(5y)N/A

1.3 Margins

Looking at the Profit Margin, with a value of 18.14%, SOLV belongs to the top of the industry, outperforming 94.02% of the companies in the same industry.
SOLV's Profit Margin has declined in the last couple of years.
SOLV's Operating Margin of 8.44% is fine compared to the rest of the industry. SOLV outperforms 76.09% of its industry peers.
SOLV's Operating Margin has declined in the last couple of years.
SOLV has a Gross Margin (54.18%) which is comparable to the rest of the industry.
In the last couple of years the Gross Margin of SOLV has declined.

		Industry Rank	Sector Rank
OM	8.44%
PM (TTM)	18.14%
GM	54.18%

OM growth 3Y-16.68%

OM growth 5YN/A

PM growth 3Y-31.26%

PM growth 5YN/A

GM growth 3Y-2.48%

GM growth 5YN/A

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

SOLV has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for SOLV remains at a similar level compared to 1 year ago.
The debt/assets ratio for SOLV is higher compared to a year ago.

2.2 Solvency

SOLV has an Altman-Z score of 1.96. This is not the best score and indicates that SOLV is in the grey zone with still only limited risk for bankruptcy at the moment.
The Altman-Z score of SOLV (1.96) is comparable to the rest of the industry.
SOLV has a debt to FCF ratio of 102.74. This is a negative value and a sign of low solvency as SOLV would need 102.74 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 102.74, SOLV is doing good in the industry, outperforming 66.30% of the companies in the same industry.
A Debt/Equity ratio of 1.03 is on the high side and indicates that SOLV has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 1.03, SOLV is doing worse than 75.54% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	1.03
Debt/FCF	102.74
Altman-Z	1.96

ROIC/WACC0.51

WACC10.11%

2.3 Liquidity

SOLV has a Current Ratio of 1.50. This is a normal value and indicates that SOLV is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.50, SOLV is not doing good in the industry: 73.91% of the companies in the same industry are doing better.
A Quick Ratio of 1.14 indicates that SOLV should not have too much problems paying its short term obligations.
SOLV has a worse Quick ratio (1.14) than 69.57% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.5
Quick Ratio	1.14

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 108.76% over the past year.
Measured over the past years, SOLV shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -31.19% on average per year.
SOLV shows a small growth in Revenue. In the last year, the Revenue has grown by 2.28%.
Measured over the past years, SOLV shows a small growth in Revenue. The Revenue has been growing by 0.34% on average per year.

EPS 1Y (TTM)108.76%

EPS 3Y-31.19%

EPS 5YN/A

EPS Q2Q%-8.54%

Revenue 1Y (TTM)2.28%

Revenue growth 3Y0.34%

Revenue growth 5YN/A

Sales Q2Q%0.67%

3.2 Future

Based on estimates for the next years, SOLV will show a small growth in Earnings Per Share. The EPS will grow by 4.39% on average per year.
Based on estimates for the next years, SOLV will show a small growth in Revenue. The Revenue will grow by 0.73% on average per year.

EPS Next Y-8.14%

EPS Next 2Y-1.56%

EPS Next 3Y1.68%

EPS Next 5Y4.39%

Revenue Next Year0.54%

Revenue Next 2Y-1.38%

Revenue Next 3Y0.15%

Revenue Next 5Y0.73%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

SOLV is valuated correctly with a Price/Earnings ratio of 12.90.
SOLV's Price/Earnings ratio is rather cheap when compared to the industry. SOLV is cheaper than 91.85% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.60, SOLV is valued rather cheaply.
With a Price/Forward Earnings ratio of 11.82, the valuation of SOLV can be described as very reasonable.
Based on the Price/Forward Earnings ratio, SOLV is valued cheaper than 92.93% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 25.83. SOLV is valued rather cheaply when compared to this.

		Industry Rank	Sector Rank
PE	12.9
Fwd PE	11.82

4.2 Price Multiples

83.70% of the companies in the same industry are more expensive than SOLV, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, SOLV is valued a bit cheaper than 66.85% of the companies in the same industry.