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Last update on 2024-06-06

Agilent Technologies (A) - Piotroski F-Score Analysis for Year 2023 (Final Score: 6/9)

In-depth Piotroski F-Score Analysis of Agilent Technologies (A) reveals a score of 6/9 for the year 2023, indicating moderate financial health.

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 Agilent Technologies (A) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

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

The Piotroski F-Score is a rating from 0 to 9 that measures a company's financial health using 9 criteria. Agilent Technologies' score is 6. Here's how the company fares: 1. **Profitability:** - Positive Net Income (2023: $1.24B) - Positive Cash Flow from Operations (2023: $1.772B) - Declining Return on Assets (ROA) - Operating Cash Flow > Net Income 2. **Liquidity:** - Increasing leverage (indicating rising debt) - Improved Current Ratio (better ability to pay short-term debts) - Decreased Outstanding Shares (positive share buyback) 3. **Efficiency:** - Decreasing Gross Margin (lower profitability) - Slight dip in Asset Turnover Ratio Overall, Agilent shows strong profitability and liquidity, but some concerns exist around ROA, leverage, and declining efficiency ratios.

Insights for Value Investors Seeking Stable Income

Given its Piotroski score of 6, Agilent Technologies demonstrates solid profitability and improving liquidity, which are positive signs. However, the concerns around decreasing ROA, rising debt, and declining efficiency metrics warrant caution. If you're a long-term investor, it may be worth further investigating Agilent Technologies as it shows signs of strong core operations. But, you should keep an eye on its efficiency and debt trends to ensure these don't negatively impact its financial stability and growth in the future.

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

Profitability of Agilent Technologies (A)

Company has a positive net income?

Net Income constitutes an essential measure of a company's profitability; a positive figure indicates efficient profit generation.

Historical Net Income of Agilent Technologies (A)

Agilent Technologies (A) reported a net income of $1,240,000,000 in 2023, which is positive. Historically, examining net income data over the last 20 years reveals variability, with some negative outputs in years such as 2003 and 2009. However, the past decade shows consistently positive net income values, reflecting improved and sustained profitability. Thus, Agilent Technologies earns 1 point for positive net income in 2023, showcasing financial health and operational success.

Company has a positive cash flow?

Cash Flow from Operations (CFO) is a measure of the cash a company generates from its regular business activities.

Historical Operating Cash Flow of Agilent Technologies (A)

Agilent Technologies (A) reported a Cash Flow from Operations (CFO) of $1,772 million in 2023. This positive figure indicates that the company is generating sufficient cash flows from its core business operations. Reviewing the historical data provided for the past 20 years, we can observe a general upward trend in the CFO values. This stable increase is a healthy sign for the company's operational efficiency and financial stability. For instance, the CFO has grown spectacularly from a low of -$144 million in 2003 to $1,772 million in 2023. This upward trend is an affirmative sign showing that Agilent Technologies has been able to enhance and maintain robust operational performance over the years.

Return on Assets (ROA) are growing?

Change in ROA (Return on Assets) assesses the company's efficiency over time. A higher ROA indicates improved profitability from asset investments.

Historical change in Return on Assets (ROA) of Agilent Technologies (A)

Agilent Technologies' ROA slightly decreased from 0.1181 in 2022 to 0.1165 in 2023. Although this change is marginal, it denotes a decrease in asset efficiency. Historically, company's ROA trend fluctuated, but the marginal drop does not substantially deviate from the industry median ROA values spanning the past 20 years, showing a steady performance relative to industry norms. Such data trends help investors gauge long-term performance stability.

Operating Cashflow are higher than Netincome?

Operating Cash Flow is the cash generated by a company's regular operating activities. Comparing it with Net Income helps assess the quality of earnings.

Historical accruals of Agilent Technologies (A)

For 2023, Agilent Technologies' Operating Cash Flow stands at $1.77 billion, while its Net Income is $1.24 billion. The higher Operating Cash Flow compared to Net Income indicates strong earnings quality, and thus, Agilent scores 1 point for this criterion. Historically, Agilent has shown a generally stable trend in Operating Cash Flow, particularly steady growth post-2015. Increasing operating cash flow is positive as it reflects improved operational efficiency and cash generation, ensuring the company’s ability to reinvest in growth or pay down debt.

Liquidity of Agilent Technologies (A)

Leverage is declining?

Change in leverage measures how a company's debt level is fluctuating relative to its equity. It is key to assess the company's financial risk and stability.

Historical leverage of Agilent Technologies (A)

The leverage ratio of Agilent Technologies increased from 0.2595 in 2022 to 0.2541 in 2023, marking a rise in financial leverage. Historical data over the last 20 years shows substantial fluctuations, with leverage levels peaking at 0.3815 in 2009 and hitting low points around 0.1630 in 2004. The trend over these years highlights the cyclical nature of leverage changes within the company. Despite a decrease from 2017's 0.2137 to 0.1895 in 2019, recent increases may raise questions regarding financial risk management and future stability.

Current Ratio is growing?

Current Ratio is a liquidity ratio that measures a company's ability to pay short-term obligations with short-term assets. It is important for assessing financial health.

Historical Current Ratio of Agilent Technologies (A)

In 2023, Agilent Technologies (A) has a Current Ratio of 2.6114, up from 2.0301 in 2022. This indicates an improvement in its liquidity position. Historically, Agilent's Current Ratio has fluctuated, reaching as high as 3.7766 in 2015. Compared to the industry median of 2.3682 in 2023, Agilent’s ratio is higher, signaling a better liquidity position. Overall, this trend is positive and hence, 1 point is added for this criterion.

Number of shares not diluted?

Outstanding Shares refer to the total number of a company's shares of stock that are owned by shareholders, including restricted shares and excluding repurchased or treasury shares.

Historical outstanding shares of Agilent Technologies (A)

Examining the trend in Agilent Technologies' outstanding shares from 2022 to 2023, it is noteworthy that their number decreased from 299 million to 294 million. This reduction in outstanding shares indicates a share buyback, which is generally seen as a positive signal. Buybacks reduce the number of shares in circulation, which can enhance earnings per share (EPS) and often suggests that the company believes its stock is undervalued. In the context of the Piotroski Analysis, this criterion yields a score of 1 because the number of outstanding shares has decreased, a trend determined beneficial for shareholders. Looking at the historical data, Agilent’s outstanding shares have mostly shown a downward trend from 473 million in 2003 to 294 million in 2023, underscoring a long-term buyback strategy.

Operating of Agilent Technologies (A)

Cross Margin is growing?

Analyze the change in gross margin, a metric that reflects the percentage of revenue that exceeds the cost of goods sold for Agilent Technologies (A), between 2022 and 2023.

Historical gross margin of Agilent Technologies (A)

The Gross Margin for Agilent Technologies (A) has decreased from 0.5435 in 2022 to 0.5071 in 2023, indicating a reduction of 0.0364 or 3.64 percentage points. This change yields a performance signal of 0 points for the Piotroski Score. Historically, the company's gross margin peaked at 0.5535 in 2008 and has demonstrated fluctuations over the past two decades. Comparing it with industry norms, the industry's median gross margin has typically been lower than Agilent’s except in 2023, when it posted a 0.504 margin, closely matching Agilent’s. A declining gross margin relative to the preceding year potentially points towards increased cost pressures or lower pricing power, factors that may weigh on Agilent's profitability.

Asset Turnover Ratio is growing?

Asset Turnover measures the efficiency of a company's use of its assets in generating sales revenue. A higher ratio is preferred.

Historical asset turnover ratio of Agilent Technologies (A)

The Asset Turnover for Agilent Technologies decreased marginally from 0.6449 in 2022 to 0.6417 in 2023. While this shift might seem minor, it indicates a slight reduction in the efficiency with which the company utilizes its assets to generate sales. Considering historical data from the past 20 years, the company's Asset Turnover has showcased fluctuations, peaking at 1.0756 in 2004 and hitting a low of 0.4411 in 2015. Based on the Piotroski Analysis criteria, since the ratio decreased in 2023, 0 points will be given for this criterion. Although, the dip is minimal compared to the significant drops observed in some previous years, it's crucial to monitor this trend continuously to ensure that it doesn't escalate further.


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