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Last update on 2024-06-07

Autodesk (ADSK) - Piotroski F-Score Analysis for Year 2023 (Final Score: 8/9)

Read the comprehensive Piotroski F-Score analysis of Autodesk (ADSK) for 2023, with an excellent final score of 8/9, reflecting strong financial stability.

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: 8

We're running Autodesk (ADSK) 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?
1
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?
1

Autodesk (ADSK) scored 8 out of 9 on the Piotroski F-Score, reflecting a strong financial position. It excels in profitability and cash flow, evidenced by significant positive net income and cash flow from operations in 2023. The company's return on assets and operating efficiency show improvement, and its leverage has decreased, indicating lower financial risk. However, there was a slight decrease in gross margin, and the current ratio, while improving, still lags behind the industry median. Lastly, management confidence is indicated by share buybacks.

Insights for Value Investors Seeking Stable Income

Autodesk shows strong financial health according to the Piotroski F-Score, making it a solid candidate for investment. The company demonstrates excellent profitability, cash flow generation, and improvements in efficiency and leverage. While some areas like the current ratio and gross margin might need closer monitoring, overall, Autodesk appears to be a robust investment option for long-term investors.

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

Profitability of Autodesk (ADSK)

Company has a positive net income?

Net income is a company's total earnings, determining its profitability and influencing investment decisions.

Historical Net Income of Autodesk (ADSK)

Autodesk (ADSK) reported a net income of $823 million in 2023, which is significantly positive. This is a strong indicator of the company's profitability. Among the last 20 years, there have been only a few years (2015-2018) where net income was negative, the rest mostly show positive figures, with 2021 peaking at $1.21 billion. The trend is leaning positive overall, marking an encouraging financial health.

Company has a positive cash flow?

The Cash Flow from Operations (CFO) is crucial because it indicates the cash a company generates from its core business operations after re-investment needs. Positive CFO suggests a healthy inflow of cash.

Historical Operating Cash Flow of Autodesk (ADSK)

For Autodesk (ADSK) in 2023, the CFO is recorded at $2,071,000,000, which is a positive value. Reviewing Autodesk's historical CFO over the past 20 years, there has been a substantial upward trend from $86,234,000 in 2003 to $2,071,000,000 in 2023. This consistent positive cash flow with an impressive increase in recent years highlights Autodesk's robust operational performance and efficient cash management. Thus, this criterion earns a full point and reflects a favorable trend.

Return on Assets (ROA) are growing?

Change in ROA represents the alteration in Return on Assets from one year to the next. This metric is crucial as it indicates the efficiency with which a company utilizes its assets to generate profit.

Historical change in Return on Assets (ROA) of Autodesk (ADSK)

The Return on Assets (ROA) of Autodesk (ADSK) improved from 0.0626 in 2022 to 0.0912 in 2023. This positive trend shows that the company has become more efficient in generating profit from its assets. An increase in ROA is a good indicator of financial health and managerial efficiency. Given this improvement in ROA, one point is added according to the criteria. To provide some context, the industry median ROA in 2023 was 0.6741. Although Autodesk's ROA is below the industry median, the company's internal ROA growth is a promising sign.

Operating Cashflow are higher than Netincome?

Operating Cash Flow higher than Net Income

Historical accruals of Autodesk (ADSK)

In 2023, Autodesk (ADSK) reported an operating cash flow of $2,071,000,000 compared to a net income of $823,000,000. This discrepancy highlights a robust cash-generating ability, scoring 1 point on the Piotroski scale. A higher operating cash flow than net income indicates quality of earnings since cash flows are harder to manipulate than accounting earnings. Autodesk's historical data further underscores this strength with operating cash flow consistently outpacing net income, especially notable in recent years with margins widening progressively since 2019. The resilience during fluctuation in net income years, particularly between 2017 and 2020, strengthens this positive indicator for robust financial health. With accruals decreasing from 0.3208 in 2007 to 0.2194 in 2023, we observe a concerted move towards transparent and quality reporting.

Liquidity of Autodesk (ADSK)

Leverage is declining?

The change in leverage compares the current level of a firm's leverage to the previous period. Leverage is the ratio of a company’s loan capital (debt) to the value of its common stock (equity), used to evaluate a company's use of debt to finance its assets.

Historical leverage of Autodesk (ADSK)

The leverage of Autodesk (ADSK) has indeed decreased from 0.3049 in 2022 to 0.2735 in 2023. This reduction implies that the company's reliance on debt to finance its activities has decreased, which is generally perceived as favorable as it reduces financial risk. Over the past two decades, Autodesk's leverage has fluctuated, peaking at around 0.4414 in 2019 before decreasing in subsequent years. With the most recent data indicating a leveraged position lower than the previous year, this trend can be seen positively as the company is potentially reducing its debt burden. Therefore, 1 point is warranted for the reduction in leverage.

Current Ratio is growing?

The Current Ratio is a liquidity ratio that measures a company's ability to pay short-term obligations. A higher ratio indicates better short-term financial health.

Historical Current Ratio of Autodesk (ADSK)

In 2023, Autodesk's Current Ratio rose to 0.8353 from 0.6894 in 2022. This improvement signals better short-term liquidity, moving closer to the industry's median of 1.7519. The trend suggests Autodesk is somewhat improving its short-term financial health, but it still lags behind the industry's median. The increased current ratio earns Autodesk a score of 1 point for this criterion.

Number of shares not diluted?

The comparison of outstanding shares between different years provides insight into a company's share dilution or buyback activities. A lower number of outstanding shares usually indicates that the company is buying back shares, which can signal management's confidence in the company or an attempt to improve financial ratios such as earnings per share (EPS).

Historical outstanding shares of Autodesk (ADSK)

In 2022, Autodesk had 220,000,000 outstanding shares, which decreased to 216,000,000 in 2023. This reduction in outstanding shares by 4,000,000 suggests that the company has undertaken share buybacks. Historically, looking at the past 20 years, Autodesk's outstanding shares have mostly fluctuated within a narrow range, with periods of both share dilution and buybacks. This is a positive indicator for this criterion, adding 1 point to the Piotroski F-Score, since a reduction in outstanding shares typically signifies a shareholder-friendly approach.

Operating of Autodesk (ADSK)

Cross Margin is growing?

Change in Gross Margin is a critical element for evaluating the financial health of a company. It shows the core efficiency of the business strategy in converting revenues into actual profit and serves as a measure of operational success.

Historical gross margin of Autodesk (ADSK)

Comparing the gross margin of 0.9041 in 2023 with 0.9047 in 2022, there is a slight decrease. Thus, the point assigned for this criterion is 0. However, Autodesk's gross margin is substantially higher than the industry median of 0.6741 in 2023, displaying the company’s strong competitive positioning and operational efficiency. Historically, Autodesk has maintained a stronger gross margin than the industry median, reflecting consistent operational effectiveness.

Asset Turnover Ratio is growing?

Asset Turnover measures a company's efficiency in using its assets to generate revenue. It's crucial for assessing operational performance.

Historical asset turnover ratio of Autodesk (ADSK)

In 2023, Autodesk's Asset Turnover is 0.5547, up from 0.5522 in 2022. This subtle increase indicates a slight improvement in asset utilization. Historically, Autodesk's Asset Turnover has faced a downward trend, peaking at 1.2171 in 2006 and reaching low points like 0.3939 in 2017. The most recent increase, while minor, contributes positively to operational efficiency, adding 1 point according to the Piotroski criterion.


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