Fair Value Uncertainty gives equity researchers an idea of how Morningstar classifies the company�s level of business risk and how tightly bound Morningstar feels to our fair value estimate for any given company. To generate the Morningstar Fair Value Uncertainty Rating, Morningstar analysts consider the following factors:
� Sales predictability
� Operating leverage
� Financial leverage
� A firm�s exposure to contingent events
Based on these factors, analysts classify the stock into one of several uncertainty levels: Low, Medium, High, Very High, or Extreme. The greater the level of uncertainty, the greater the discount to fair value required before a stock can earn 5 stars, and the greater the premium to fair value before a stock earns a 1-star rating.