AMSC 31.19 (+4.66%)
US0301112076Industrial ProductsSpecialty Industrial Machinery

Last update on 2024-06-07

American Superconductor (AMSC) - Piotroski F-Score Analysis for Year 2023 (Final Score: 2/9)

American Superconductor (AMSC) scored 2/9 in the 2023 Piotroski F-Score analysis. The score assesses AMSC's financial performance and profitability.

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 American Superconductor (AMSC) 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?
0
Return on Assets (ROA) are growing?
0
Operating Cashflow are higher than Netincome?
1
Leverage is declining?
1
Current Ratio is growing?
0
Number of shares not diluted?
0
Cross Margin is growing?
0
Asset Turnover Ratio is growing?
0

The Piotroski F-Score is a metric used to measure the financial health of a company, particularly focusing on profitability, liquidity, and leverage. American Superconductor (AMSC) scored a 2 out of 9, indicating a struggling financial position. Key issues include negative net income and cash flow, poor return on assets, declining gross and asset turnover ratios, and an increasing number of shares. Though it has shown improvement in leverage, the current ratio and other profitability metrics are concerning.

Insights for Value Investors Seeking Stable Income

Based on the Piotroski score of 2, American Superconductor does not seem to be a financially strong or stable investment at this time. The company shows continuous negative trends in significant areas like net income, cash flow, and asset efficiency while struggling with liquidity and profitability. It may be wise for investors to avoid this stock and consider companies with a higher Piotroski score, reflecting stronger financial health and better growth potential.

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

Profitability of American Superconductor (AMSC)

Company has a positive net income?

Net Income is a measure of a company's profitability and is important for assessing financial health.

Historical Net Income of American Superconductor (AMSC)

American Superconductor (AMSC) has reported a net income of -$35,041,000 in 2023. This result is negative. Historically, AMSC has struggled to achieve positive net income, with only two instances—2009 and 2018— showing positive figures, which were $16,248,000 and $26,761,000, respectively. The latest negative net income suggests ongoing profitability challenges for the company. This trend is concerning and highlights persistent profitability issues in AMSC's financial performance.

Company has a positive cash flow?

Cash Flow from Operations (CFO) is a critical metric reflecting the cash a company produces from its regular business operations. Positive CFO indicates solid operational performance.

Historical Operating Cash Flow of American Superconductor (AMSC)

The American Superconductor (AMSC) had a negative Cash Flow from Operations (CFO) of -$22,485,000 in 2023. This is a concerning trend, confirming weak operational performance. Historically, the company has struggled to maintain a positive CFO, with only three instances of positive CFO in the last 20 years. Therefore, for the Piotroski score, AMSC earns 0 points for this criterion.

Return on Assets (ROA) are growing?

Comparing the Return on Assets (ROA) for American Superconductor between 2022 and 2023 highlights the company's efficiency in generating profit relative to its assets.

Historical change in Return on Assets (ROA) of American Superconductor (AMSC)

In 2023, American Superconductor's ROA was -0.2006, representing a decline from the 2022 ROA of -0.112. This negative trend signifies a deterioration in the company's ability to utilize its assets to generate returns. While the industry median ROA has been substantially positive and consistently around 0.34 in the same period, indicating stronger profitability practices within the industry, AMSC's performance starkly contrasts indicating perhaps strategic or operational inefficiencies. Hence, the assigned score for ROA change is 0 as the ROA did not improve but rather worsened.

Operating Cashflow are higher than Netincome?

Operating Cash Flow higher than Net Income

Historical accruals of American Superconductor (AMSC)

For the fiscal year 2023, American Superconductor (AMSC) reported an operating cash flow of -$22,485,000 and a net income of -$35,041,000. In this instance, operating cash flow is higher than net income. Hence, this criterion is satisfied, and a score of 1 point is awarded (higher operating cash flow is preferred as it indicates better liquidity and earnings quality). Historical comparison shows that while both metrics are generally negative, the operating cash flow tends to outperform net income, reflecting better cash generation capability relative to reported earnings. Such trends favorably impact AMSC's liquidity position.

Liquidity of American Superconductor (AMSC)

Leverage is declining?

Change in leverage measures how a company's financial obligations compare to its equity, which indicates financial risk.

Historical leverage of American Superconductor (AMSC)

The leverage ratio of American Superconductor (AMSC) has decreased from 0.0172 in 2022 to 0.0125 in 2023. This is a positive trend as the company appears to be reducing its financial risk and reliance on debt. According to the data for the last 20 years, such a low leverage ratio underscores a cautious approach towards debt, giving them a score of 1 for this criterion.

Current Ratio is growing?

The current ratio measures the company's ability to pay short-term obligations with short-term assets, indicating liquidity and financial stability.

Historical Current Ratio of American Superconductor (AMSC)

As of 2023, American Superconductor's current ratio is 1.2623, a sharp decrease from 1.7481 in 2022. This results in a point of 0 as the ratio decreased. Over the last 20 years, AMSC's current ratio has seen significant fluctuations, reaching a high of 6.0155 in 2005 and a low of 1.2623 in the current year. Comparatively, the industry's median current ratio has remained more stable, averaging between 1.5905 and 1.9186. The concerning downward trend for AMSC could signal liquidity issues, particularly since its current ratio is consistently below the industry median over the past few years.

Number of shares not diluted?

A decrease in the number of shares outstanding indicates potential stock buybacks or fewer shares being issued, which can signify strong financial health and shareholder value.

Historical outstanding shares of American Superconductor (AMSC)

Comparing the outstanding shares of American Superconductor (AMSC) in 2022 (27,203,000 shares) to 2023 (27,848,000 shares), we notice an increase of 645,000 shares. This trend is unfavorable under the Piotroski criteria, resulting in 0 added points. Over the span of 20 years, AMSC's outstanding shares generally show an increasing trend, indicating that the company has often raised capital through equity issuance.

Operating of American Superconductor (AMSC)

Cross Margin is growing?

The Gross Margin criterion examines the change in gross margin relative to the previous year to evaluate profitability.

Historical gross margin of American Superconductor (AMSC)

American Superconductor (AMSC) experienced a decrease in Gross Margin from 0.1244 (2022) to 0.0804 (2023). This represents a decline, thus resulting in a score of 0 for this criterion. A noticeable observation is the historical fluctuation in gross margins, with peak values like 0.3639 in 2010, but persistent variability. Relative to the industry median, which has been consistently above 0.3154 for the same period, AMSC's gross margin trend signifies ongoing competitive pressures and possibly operational inefficiencies.

Asset Turnover Ratio is growing?

The asset turnover ratio measures the efficiency of a company's use of its assets in generating sales revenue within a specific period.

Historical asset turnover ratio of American Superconductor (AMSC)

Comparing American Superconductor's asset turnover for the years 2022 and 2023, we observe a slight decrease from 0.6327 in 2022 to 0.6066 in 2023. This decline results in a score of 0 for this criterion in the Piotroski analysis. Though the overall trend over the last two decades shows significant improvements from the early 2000s, the recent decrease indicates a momentary setback in asset utilization efficiency.


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