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Vitesco Technologies Group (0AAF.L) - Piotroski F-Score Analysis for Year 2023 (Final Score: 6/9)

Vitesco Technologies Group (0AAF.L): Piotroski F-Score Analysis for 2023 with a final score of 6/9, assessing profitability, liquidity, and operating efficiency.

Knowledge hint:
The Piotroski F-Score is a number between 0 to 9 which reflects the strength of a company's financial position. It is based on 9 criteria involving profitability, liquidity, and leverage. This model helps investors identify stocks that are strong, undervalued investments.
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Short Analysis - Piotroski Score: 6

We're running Vitesco Technologies Group (0AAF.L) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

Criteria
Company has a positive net income?
0
Company has a positive cash flow?
1
Return on Assets (ROA) are growing?
0
Operating Cashflow are higher than Netincome?
1
Leverage is declining?
0
Current Ratio is growing?
1
Number of shares not diluted?
1
Cross Margin is growing?
1
Asset Turnover Ratio is growing?
1

Vitesco Technologies Group (0AAF.L) was analyzed using the Piotroski F-Score, which evaluates profitability, liquidity, and operational efficiency based on 9 criteria. The company scored 6 out of 9, reflecting a moderate financial position. While it demonstrated positive cash flow from operations and improved gross margins and asset turnover, Vitesco struggled with negative net income, decreasing return on assets, and increasing leverage. Their current ratio improved but remained below industry median, and although they saw a reduction in outstanding shares, overall profitability trends indicated inconsistency.

Insights for Value Investors Seeking Stable Income

Based on the Piotroski F-Score analysis, Vitesco Technologies Group shows a mixed financial standing. With a score of 6 out of 9, it demonstrates some strengths in cash flow and operational efficiency. However, the company faces challenges in profitability and leverage. Prospective investors might find it worthwhile to monitor this stock but should be cautious due to its inconsistent profitability and relatively high financial risk. More in-depth research and analysis of industry conditions and future strategic plans are recommended before making any investment decisions.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of Vitesco Technologies Group (0AAF.L)

Company has a positive net income?

The criterion assesses whether the net income of the company is positive, indicating profitability, which is crucial for sustainable growth and investor confidence.

Historical Net Income of Vitesco Technologies Group (0AAF.L)

The net income for Vitesco Technologies Group (0AAF.L) in 2023 is -€96.4 million, which is negative. According to the Piotroski Score methodology, this criterion would receive 0 points because the company did not achieve profitability for this year. When examining the historical net income data, we observe a fluctuating trend over the past six years. The company had a positive net income in 2018 (€86.5 million) and 2022 (€23.6 million), but experienced losses in 2019 (-€659.9 million), 2020 (-€376.7 million), 2021 (-€122 million), and now again in 2023 (-€96.4 million). Despite occasional positive outcomes, the overall trend highlights inconsistencies in achieving and maintaining profitability. This negative result in 2023, particularly following a positive year, may signal underlying strategic or operational challenges that need addressing. Assessing such trends over time can be vital for investors reevaluating long-term investment potential and for identifying cyclic problems within the company.

Company has a positive cash flow?

Cash Flow from Operations (CFO) indicates how well a company can generate cash from its core business operations. Positive CFO is a sign of good financial health.

Historical Operating Cash Flow of Vitesco Technologies Group (0AAF.L)

For Vitesco Technologies Group (0AAF.L), the CFO in 2023 stands at €629 million, which is indeed positive, thus earning 1 point under the Piotroski score. This is a good sign as it indicates strong cash generation from the company's core operations. For additional context, looking at the past six years, the CFO figures reveal fluctuation but a general upward trend: from €679.6 million in 2018 to €629 million in 2023 with a dip in 2020 during which the CFO was negative at -€5.9 million likely due to the impact of the COVID-19 pandemic. Positive CFO in the recent year adds to the financial robustness of the company.

Return on Assets (ROA) are growing?

The change in Return on Assets (ROA) measures a company's efficiency in generating profit relative to its total assets from one period to the next. It's crucial for investment analyses.

Historical change in Return on Assets (ROA) of Vitesco Technologies Group (0AAF.L)

For Vitesco Technologies Group (0AAF.L), the ROA decreased from 0.0031 in 2022 to -0.0127 in 2023. Therefore, according to the Piotroski criteria, this would be assigned a score of 0, indicating a negative trend. The decreasing ROA highlights inefficiencies in utilizing assets to generate earnings. Additionally, when compared with the industry median ROA, which increased from 0.1863 to 0.196 from 2022 to 2023, Vitesco Technologies underperformed significantly, shedding light on potential management or operational challenges within the firm. Historical data also shed light on Vitesco's fluctuating operating cash flow, with a significant negative spike in 2020 (-5,900,000), although it has improved to 629,000,000 in 2023, indicating some recovery in cash generation capabilities but not enough to positively impact ROA.

Operating Cashflow are higher than Netincome?

Explain the criterion for Vitesco Technologies Group (0AAF.L) and why it is important to consider

Historical accruals of Vitesco Technologies Group (0AAF.L)

Operating Cash Flow higher than Net Income

Liquidity of Vitesco Technologies Group (0AAF.L)

Leverage is declining?

Change in leverage measures the change in a company's debt level, which indicates financial risk. A decrease in leverage is favorable as it shows improved financial health.

Historical leverage of Vitesco Technologies Group (0AAF.L)

For Vitesco Technologies Group (0AAF.L), the leverage ratio increased from 0.0517 in 2022 to 0.0887 in 2023. An increase in leverage suggests higher financial risk possibly due to taking on more debt. Over the last 20 years, the company’s leverage trend has generally increased, from 0.0003 in 2018 to 0.0887 in 2023. Hence, for this Piotroski criterion, Vitesco Technologies gets a score of 0, indicating a negative trend in financial stability.

Current Ratio is growing?

The current ratio is a financial metric that measures a company's ability to pay short-term liabilities with short-term assets. A higher ratio indicates better liquidity.

Historical Current Ratio of Vitesco Technologies Group (0AAF.L)

Comparing the current ratios, Vitesco Technologies Group has seen an increase from 1.1695 in 2022 to 1.2136 in 2023. This upward trend is positive, reflecting an improvement in the company's liquidity position, albeit slightly. However, it's important to note that while Vitesco's current ratio is improving, it remains below the industry median for 2023, which stands at 1.7153. This suggests that while Vitesco is making progress in liquidity, its cushion to meet short-term obligations is still less robust than its peers. Thus, for the Piotroski Score, a point is awarded for this positive change.

Number of shares not diluted?

Shares Outstanding refers to the number of shares that are currently owned by all shareholders, including blocks held by institutional investors and restricted shares owned by the company’s officers and insiders. It is important because it impacts factors such as earnings per share (EPS) and market capitalization.

Historical outstanding shares of Vitesco Technologies Group (0AAF.L)

Comparing the Outstanding Shares of Vitesco Technologies Group, we observe that the shares stood at 40,021,196 in 2022 and dropped to 0 in 2023. This indicates a significant decrease in the number of shares outstanding. According to the Piotroski score criteria, a decrease in shares outstanding is viewed positively as it can signal that the company is buying back its shares, representing managerial confidence and providing a possible boost to EPS. Thus, Vitesco Technologies Group gains 1 point for this criterion.

Operating of Vitesco Technologies Group (0AAF.L)

Cross Margin is growing?

Gross Margin is a key indicator of a company's financial health, reflecting the financial efficiency with which it produces goods or services.

Historical gross margin of Vitesco Technologies Group (0AAF.L)

Vitesco Technologies Group's Gross Margin increased from 0.1276 in 2022 to 0.153 in 2023. This is a positive trend, indicating improved efficiency and cost management. A 1-point score is thus applicable. Historically, the company’s margins were 0.1342 (2021), 0.1315 (2020), 0.133 (2019), and 0.1524 (2018). In contrast, the industry shows a declining trend from 0.2271 (2018) to 0.196 (2023), showcasing Vitesco Technologies’ relative strength against industry pressures.

Asset Turnover Ratio is growing?

Change in Asset Turnover: This measures a company's efficiency in using its assets to generate sales. An increasing ratio indicates better performance.

Historical asset turnover ratio of Vitesco Technologies Group (0AAF.L)

The Asset Turnover ratio for Vitesco Technologies Group has increased from 1.2084 in 2022 to 1.216 in 2023, an increment which signifies improved efficiency in using its assets to generate revenue, earning it 1 point in the Piotroski Analysis. The historical data indicates a positive trend, showing a gradual increase since 2020 when it was 0.9747, demonstrating a progressive enhancement in asset utilization efficiency.


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