AMT 210.15 (+0.63%)
US03027X1000REITsREIT - Specialty

Last update on 2024-06-06

American Tower (AMT) - Piotroski F-Score Analysis for Year 2023 (Final Score: 6/9)

Explore American Tower's (AMT) Piotroski F-Score Analysis for 2023, highlighting profitability, liquidity, and operational efficiency with a score of 6/9.

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.
Learn more...

Short Analysis - Piotroski Score: 6

We're running American Tower (AMT) 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?
0
Current Ratio is growing?
1
Number of shares not diluted?
0
Cross Margin is growing?
1
Asset Turnover Ratio is growing?
1

The Piotroski F-Score is a model that assesses a company's financial health based on criteria like profitability, liquidity, and leverage, scoring from 0 to 9. American Tower (AMT) has been analyzed based on this model and scored a 6 out of 9. Here’s a breakdown: AMT shows positive signs in several areas such as net income, operating cash flow, and gross margin. The company reported a net income of $1.48 billion and an operating cash flow of $4.72 billion in 2023, both positive metrics. However, AMT's Return on Assets (ROA) declined, and its leverage increased from last year, indicating potential risks. Additionally, there was an increase in the number of shares outstanding, implying dilution. The current ratio improved but remains below the industry median, pointing out areas for improvement. On a positive note, the Asset Turnover Ratio and Gross Margin saw improvements, signaling operational efficiency.

Insights for Value Investors Seeking Stable Income

Given the score of 6 out of 9, American Tower (AMT) appears to have a solid financial foundation overall, but there are some concerns specifically regarding increased leverage and share dilution. While the company has shown strength in profitability and operational cash flow, investors should be cautious and conduct further research into its rising debt levels and stock dilution before deciding to invest. AMT's long-term stability and growth prospects look promising, but attention to its debt management strategies is essential.

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

Profitability of American Tower (AMT)

Company has a positive net income?

Analyzing the net income criterion evaluates a company's profitability, where positive net income usually indicates profit and operational success.

Historical Net Income of American Tower (AMT)

For 2023, American Tower (AMT) reported a net income of $1,483,300,000, which is positive. This net positive income merits an addition of 1 point according to the Piotroski F-Score criteria. When examining historical data, AMT has consistently demonstrated profitability over the past two decades, apart from the early 2000s. This positive trend underscores the company's strong financial standing and operational efficiency, albeit with some fluctuations in certain years. The continuity of positive net income in recent years signals robust organizational health.

Company has a positive cash flow?

Cash Flow from Operations (CFO) is an important indicator of a company's ability to generate sufficient positive cash flow to maintain and grow its operations.

Historical Operating Cash Flow of American Tower (AMT)

American Tower's (AMT) Cash Flow from Operations (CFO) in 2023 is $4,722,400,000, which is positive. This indicates that the company is generating sufficient cash flow from its core business operations. Over the past 20 years, AMT's CFO has shown consistent growth, rising from $156,386,000 in 2003 to its current level. This positive trend not only highlights the company's robust operational efficiency but also builds confidence among investors about its long-term viability. Consequently, AMT scores 1 point for this Piotroski criterion.

Return on Assets (ROA) are growing?

Criterion 1: Change in ROA measures the company's ability to generate profits from its assets over a period of time. An increasing ROA is a sign of improving efficiency in asset utilization, which is a crucial indicator of management effectiveness and profitability.

Historical change in Return on Assets (ROA) of American Tower (AMT)

The Return on Assets (ROA) for American Tower (AMT) decreased from 0.0258 in 2022 to 0.0223 in 2023. This represents a decline in the efficiency with which the company is using its assets to generate earnings, marking a decrease of 0.0035. In the context of the last 20 years, American Tower's ROA has generally followed an upward trend since the early 2000s, with notable increases particularly post-2010. However, this recent downward trend in ROA is concerning, especially when juxtaposed with the industry median ROA, which stands significantly higher at 0.4759 in 2023. Therefore, for this criterion, we set the score to 0, as the ROA did not increase.

Operating Cashflow are higher than Netincome?

The criterion compares whether operating cash flow is higher than net income for American Tower (AMT) and assesses the quality of earnings.

Historical accruals of American Tower (AMT)

For 2023, American Tower (AMT) reported an Operating Cash Flow of $4,722,400,000 and Net Income of $1,483,300,000. Since the Operating Cash Flow is significantly higher than the Net Income, we award 1 point for this criterion. A higher Operating Cash Flow compared to Net Income is a positive sign, suggesting that earnings are high quality and more cash is generated from core operations. For the past 20 years, the overall trend has shown an increasing and positive relationship between Operating Cash Flow and Net Income, indicative of consistent operational efficiency and effectiveness. This trend boosts the reliability of earnings reported by AMT and assures investors of the company’s robust financial health over an extended period.

Liquidity of American Tower (AMT)

Leverage is declining?

Change in Leverage measures a company's solvency over time and its ability to meet long-term obligations. Lower leverage is generally favorable.

Historical leverage of American Tower (AMT)

In 2023, American Tower's leverage ratio increased to 0.6539 from 0.6213 in the previous year, reflecting a higher level of debt. Over the last 20 years, there have been fluctuations in leverage, peaking in 2020 at 0.7491 and reaching lows in 2006 (0.3819). The current increasing trend, observed from 2022 to 2023, which shows an ongoing reliance on debt, indicates a higher risk profile. Consequently, no point is awarded for this criterion as the leverage has worsened.

Current Ratio is growing?

The criterion analyzes the year-over-year change in a company's current ratio, reflecting its short-term liquidity and financial health. An increasing current ratio indicates better ability to cover short-term liabilities.

Historical Current Ratio of American Tower (AMT)

American Tower's current ratio improved from 0.4358 in 2022 to 0.5118 in 2023, representing an increase. Hence, AMT earns 1 point for this metric. This improvement suggests that AMT has enhanced its short-term liquidity, although it remains below the industry median ratio of 1.282 in 2023. Over the past two decades, AMT's current ratio has seen considerable fluctuation, peaking at 2.5898 in 2010 and dipping to a low of 0.4113 in 2021. Despite recent gains, AMT's current ratio lags behind the industry median, indicating potential areas for further improvement in liquidity management.

Number of shares not diluted?

Change in shares outstanding is crucial as it reflects a company's capital structure dynamics impacting shareholder value.

Historical outstanding shares of American Tower (AMT)

From 2022 to 2023, the outstanding shares of American Tower increased from 461.52 million to 466.06 million. This indicates a dilution of shares, suggesting potential financing for growth but reducing existing shareholder value. Historically, AMT's shares have fluctuated, rising notably from 208.10 million in 2003 to 466.06 million in 2023. Given this increase in 2023, the Piotroski score for this criterion is 0.

Operating of American Tower (AMT)

Cross Margin is growing?

Change in Gross Margin compares the corporate Gross Margin between years to determine profitability trends. Gross Margin is calculated as (Revenue - Cost of Goods Sold) / Revenue. An increasing Gross Margin indicates greater efficiency and profitability, making this a critical metric for investors.

Historical gross margin of American Tower (AMT)

The Gross Margin for American Tower (AMT) has increased from 0.6953 in 2022 to 0.7074 in 2023, reflecting a rise of 0.0121. This increase points to improved operational efficiency and better cost management, resulting in higher profitability. Over the last 20 years, American Tower's Gross Margin has generally been on an upward trend, with some fluctuations. The current Gross Margin significantly outperforms the industry median of 0.4759 in 2023, solidifying AMT's position as a market leader in terms of profitability. Thus, we award a point for this positive trend.

Asset Turnover Ratio is growing?

Asset turnover measures a firm's efficiency in using its assets to generate sales. A higher ratio implies better efficiency.

Historical asset turnover ratio of American Tower (AMT)

Comparing the Asset Turnover of 0.1673 in 2023 to the 0.1563 in 2022, we observe an increase. This indicates improved efficiency in utilizing assets to generate revenue, adding 1 point. Historically, the 2023 ratio marks a reversal of the downtrend from the peak of 0.2247 in 2018, suggesting a potential recovery.


Obligatory risk notice

We would like to point out that the contents of this website are for general information purposes only and do not constitute recommendations for the purchase or sale of specific financial instruments, and therefore do not constitute investment advice. In particular, marketstorylabs.com and its creators cannot assess the extent to which information / recommendations made on the pages correspond to your investment objectives, your risk tolerance and your ability to bear losses. Therefore, if you make any investment decisions based on information on the site, you do so solely on your own responsibility and at your own risk. This in turn means that neither marketstorylabs.com nor its creators are liable for any losses incurred as a result of investment decisions based on the information on the marketstorylabs.com website or other media used.