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Last update on 2024-06-07

AstroNova (ALOT) - Piotroski F-Score Analysis for Year 2023 (Final Score: 2/9)

Review AstroNova (ALOT) Piotroski F-Score Analysis for 2023. Detailed insights on financial strength, profitability, liquidity, and risk.

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: 2

We're running AstroNova (ALOT) 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?
0
Return on Assets (ROA) are growing?
0
Operating Cashflow are higher than Netincome?
0
Leverage is declining?
0
Current Ratio is growing?
0
Number of shares not diluted?
0
Cross Margin is growing?
0
Asset Turnover Ratio is growing?
1

In the analysis using the Piotroski F-Score, AstroNova (ALOT) scored 2 out of 9. Key findings include: a positive net income for 2023 but a negative cash flow, declined Return on Assets (ROA), lower operating cash flow than net income, increased leverage, decreased current ratio, slight share dilution, and declining gross margin. However, there was a notable improve in the Asset Turnover Ratio, indicating better asset utilization.

Insights for Value Investors Seeking Stable Income

Given that AstroNova (ALOT) only scored 2 out of 9 on the Piotroski F-Score, it indicates a potentially weak financial position overall. The company faces challenges such as negative cash flow, increased leverage, declining ROA and gross margin. If you are an investor looking for strong, undervalued stocks, it might be wise to be cautious with AstroNova (ALOT). Further detailed analysis or professional advice should be considered before making 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 AstroNova (ALOT)

Company has a positive net income?

Net income is the total profit of a company after all expenses have been deducted. A positive net income indicates profitability and financial health.

Historical Net Income of AstroNova (ALOT)

The net income of $2,661,000 in 2023 is positive. This adds 1 point to AstroNova's (ALOT) Piotroski score, indicating a good performance in terms of profitability. Assessing the historical data, AstroNova has experienced ups and downs over the last 20 years, including negative net income in 2003, 2020, and dips in 2009 and 2011. The positive trend in 2023 suggests an improvement in overcoming financial hurdles, marking a recovery phase post-2020.

Company has a positive cash flow?

Cash Flow from Operations (CFO) measures the cash a company generates from its regular business operations and is crucial in assessing its financial health.

Historical Operating Cash Flow of AstroNova (ALOT)

AstroNova's CFO for 2023 stands at -$2,936,000, indicating a negative cash flow. This is a concerning sign as it points to AstroNova utilizing more cash than it is generating through its standard operational activities. Historically, AstroNova has seen positive CFO in many years, most notably in 2020 and 2021, which had $13,903,000 and $15,544,000 respectively. The negative trend observed in 2023 could suggest potential difficulties in sustaining operational liquidity, necessitating measures to improve cash generation moving forward. Consequently, for the Piotroski analysis, AstroNova earns 0 points for this criterion.

Return on Assets (ROA) are growing?

Change in ROA measures the company's efficiency in converting assets into profits from one year to the next. It is a key profitability metric. If the ROA has increased, it indicates improved efficiency and management effectiveness.

Historical change in Return on Assets (ROA) of AstroNova (ALOT)

In 2023, AstroNova (ALOT) reported an ROA of 0.0209, down from 0.0558 in 2022. This decline in ROA from 2022 to 2023 is a negative indicator, suggesting a decrease in the company's efficiency in generating profit from its assets. Historically, the company's ROA has been highly volatile, with significant fluctuations over the past 20 years. For instance, the ROA peaked in years like 2016 and then dropped substantially in subsequent years. Comparatively, the industry median ROA has been much more stable and significantly higher, standing at 0.3501 in 2023, which puts AstroNova well below its industry peers. Given this downward trend, the ROA criterion scores 0 points for 2023.

Operating Cashflow are higher than Netincome?

The criterion assesses whether the operating cash flow is higher than net income, indicating higher cash-generating capacity. This is essential as it highlights strong cash flow management and the ability of the company to generate cash from its operations.

Historical accruals of AstroNova (ALOT)

For 2023, AstroNova (ALOT) reported an operating cash flow of -$2,936,000, which is notably lower than its net income of $2,661,000. Consequently, the company earns a score of 0 for this criterion. Over the past 20 years, AstroNova's operating cash flow has fluctuated significantly, reaching a peak of $15,544,000 in 2020 and a low of -$3,567,000 in 2014. In contrast, net income has also shown variability but generally demonstrates a smoother uptrend, peaking at $10,767,000 in 2013. The notable variance between operating cash flow and net income, especially in 2023, raises concerns about AstroNova's ability to convert its earnings into actual cash, highlighting potential issues in working capital management or significant non-cash earnings components.

Liquidity of AstroNova (ALOT)

Leverage is declining?

Change in Leverage for AstroNova (ALOT) measures debt relative to equity, vital for assessing financial risk.

Historical leverage of AstroNova (ALOT)

AstroNova's leverage ratios of 0.078 in 2022 and 0.0905 in 2023 indicate an increase in leverage this past year. This rising leverage, moving from 0.078 to 0.0905, implies a higher degree of debt relative to its equity. Historically, the company's leverage has seen fluctuating trends, peaking at 0.1443 in 2018 and showing inconsistent decreases and increases. An increasing leverage ratio typically signals higher financial risk, as the company is relying more on debt financing—a potential red flag for risk-averse investors. Therefore, this trend denotes a lower Piotroski score for this criterion, resulting in 0 points. Long-term leverage trends are vital for contextual decision-making.

Current Ratio is growing?

The Current Ratio assesses a company's ability to pay short-term obligations with its short-term assets. A higher ratio typically indicates better liquidity.

Historical Current Ratio of AstroNova (ALOT)

AstroNova's Current Ratio has decreased from 3.1833 in 2022 to 2.1271 in 2023, which is a concerning trend as it suggests diminished liquidity. Over the last two decades, AstroNova's Current Ratio had been consistently above the industry median. However, the significant drop in 2023 raises questions about short-term financial stability. This unfavorable change results in no points for this criterion according to the Piotroski Analysis.

Number of shares not diluted?

The change in shares outstanding represents the company's issuance or repurchase of shares. An increase in shares can dilute existing shareholders' value.

Historical outstanding shares of AstroNova (ALOT)

Between 2022 and 2023, AstroNova's shares outstanding increased from 7,207,000 to 7,307,000, signaling a net issuance of 100,000 shares. This trend is negative, indicating shareholder dilution and hence receives 0 points.

Operating of AstroNova (ALOT)

Cross Margin is growing?

Gross Margin is a company's net sales revenue minus its cost of goods sold, divided by net sales revenue. It is an indication of how effectively a company produces its goods relative to its revenue. A higher gross margin indicates high efficiency, and tracking this over time can demonstrate operational improvements or deteriorations.

Historical gross margin of AstroNova (ALOT)

The Gross Margin for AstroNova (ALOT) decreased from 37.23% in 2022 to 33.79% in 2023. This marks a decline of nearly 3.44 percentage points. Given the Piotroski F-Score criteria, this would therefore add 0 points. Historically, AstroNova's Gross Margin peaked at 43.28% in 2009 and has been fluctuating, exhibiting a gradual downward trend recently. Conversely, the industry median for gross margins presented year-to-year fluctuations but showed an overall rise in average efficiency, standing at 35.01% for 2023, which is higher than AstroNova's 2023 performance. The downward trend puts AstroNova at a competitive disadvantage in terms of operational efficiency.

Asset Turnover Ratio is growing?

Asset Turnover Ratio is a financial metric that measures the efficiency of a company's use of its assets to generate sales revenue. The ratio is important as it reflects how well the management is using its assets to increase sales. Higher ratios typically indicate better performance.

Historical asset turnover ratio of AstroNova (ALOT)

AstroNova's Asset Turnover increased from 1.0197 in 2022 to 1.1215 in 2023. This represents an improvement in how effectively the company is using its assets to generate revenue. Historically, a ratio above 1 is favorable, showing that AstroNova is maintaining a strong operational efficiency. Given this increase, 1 point is awarded.


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