BLDP 2.67 (+7.66%)
CA0585861085Industrial ProductsSpecialty Industrial Machinery

Last update on 2024-06-07

Ballard Power Systems (BLDP) - Piotroski F-Score Analysis for Year 2023 (Final Score: 2/9)

Ballard Power Systems (BLDP) scores 2/9 in the 2023 Piotroski F-Score analysis, reflecting challenges in financial health, profitability, and liquidity.

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 Ballard Power Systems (BLDP) 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?
0
Current Ratio is growing?
0
Number of shares not diluted?
0
Cross Margin is growing?
0
Asset Turnover Ratio is growing?
1

The Piotroski F-Score is used to evaluate a company's financial strength, with a score between 0 and 9. For Ballard Power Systems (BLDP), the company scored a 2, indicating weak performance. The analysis considered nine criteria covering profitability, liquidity, and efficiency. BLDP struggles with negative net income and cash flow, declining ROA, and increasing leverage. Although it showed some strengths like higher operating cash flow compared to net income and improved asset turnover, its overall financial health is concerning.

Insights for Value Investors Seeking Stable Income

Based on the low Piotroski score of 2, it's recommended to approach Ballard Power Systems (BLDP) with caution. The company's financial performance shows several red flags, particularly in profitability and liquidity. Unless there is a significant turnaround, this stock might not be the best investment choice at the moment, especially for risk-averse investors looking for strong financial stability.

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

Profitability of Ballard Power Systems (BLDP)

Company has a positive net income?

Net income indicates a firm's profitability. Positive net income reflects profitable operations, while negative signifies a loss.

Historical Net Income of Ballard Power Systems (BLDP)

Ballard Power Systems' net income for 2023 is -$177,716,000, indicating a loss. Analyzing historical data, the company has frequently recorded losses over the last two decades, with only a small profit in 2008. This trend suggests challenges in achieving consistent profitability. For Piotroski scoring, this criterion gets 0 points due to the negative net income, reflecting a concerning sign for potential investors.

Company has a positive cash flow?

Cash Flow from Operations (CFO) indicates the amount of cash a company generates from its normal business operations. It is crucial for assessing financial health.

Historical Operating Cash Flow of Ballard Power Systems (BLDP)

In 2023, Ballard Power Systems (BLDP) reported a negative Cash Flow from Operations (CFO) of $-104.57 million. According to the Piotroski Score criteria, a negative CFO results in 0 points. Over the past 20 years, BLDP has consistently struggled to generate positive operating cash flow, with the best performance recorded in 2013 at $-17.42 million. This persistent trend of negative CFO highlights ongoing challenges in the company's core business operations, posing concerns for sustainability and long-term financial health.

Return on Assets (ROA) are growing?

Change in ROA, or Return on Assets, reflects how efficiently a company is using its assets to generate earnings. Improving ROA signifies better asset utilization.

Historical change in Return on Assets (ROA) of Ballard Power Systems (BLDP)

For Ballard Power Systems (BLDP), the ROA in 2023 was -0.1529, compared to -0.1291 in 2022. This indicates a decline, as the ROA became more negative. This suggests that BLDP's efficiency in using its assets to generate earnings has worsened over the past year. Given this trend, 0 points would be added in the Piotroski score for this criterion. Additionally, it's essential to consider the consistent underperformance compared to the industry median ROA, which has remained positive over the last 20 years, highlighting a potential competitive disadvantage.

Operating Cashflow are higher than Netincome?

Comparing Operating Cash Flow and Net Income shows the quality of the company's earnings. A higher Operating Cash Flow suggests that the earnings are supported by actual cash flow, not just accounting adjustments.

Historical accruals of Ballard Power Systems (BLDP)

For Ballard Power Systems (BLDP) in 2023, the Operating Cash Flow (-$104.57 million) is indeed higher than the Net Income (-$177.716 million). This earns a score of 1 point according to the Piotroski criteria. Although both figures are negative, the smaller negative number for Operating Cash Flow compared to Net Income indicates that the company is generating more cash than it is earning in accounting profits. Historically, Ballard Power Systems has frequently had higher Operating Cash Flow compared to Net Income, reflecting a consistent pattern (e.g., 2003: -$42.77 million vs. -$125.092 million, 2022: -$132.171 million vs. -$173.494 million). This suggests that the company is not overly reliant on non-cash accounting items.

Liquidity of Ballard Power Systems (BLDP)

Leverage is declining?

Leverage assesses the degree to which a company is utilizing borrowed money. It is crucial in evaluating the risk level and long-term financial sustainability.

Historical leverage of Ballard Power Systems (BLDP)

Ballard Power Systems' leverage ratio increased from 0.0095 in 2022 to 0.0124 in 2023, reflecting a rise in the company's borrowed funds usage. Over the last 20 years, leverage had significant spikes in 2010 and 2011. The recent increase breaks a declining trend observed since 2020, indicating potential financial risk ahead. This increase in leverage scores zero points in Piotroski analysis.

Current Ratio is growing?

Change in Current Ratio is a measure of a company's ability to pay off its short-term liabilities with its short-term assets.

Historical Current Ratio of Ballard Power Systems (BLDP)

For Ballard Power Systems (BLDP), the Current Ratio decreased from 14.0568 in 2022 to 12.2509 in 2023, indicating a decline in liquidity. This suggests that while still well above the industry median of 1.7757 in 2023, the company is less able to cover its short-term obligations than it was the previous year. This decline from a high of 16.4004 in 2020 signifies a potential trend of decreasing liquidity, which could be alarming if it continues. Hence, it scores 0 points for this criterion.

Number of shares not diluted?

Evaluating change in shares outstanding helps investors understand potential dilution of their equity stake, which can affect per-share metrics and voting power.

Historical outstanding shares of Ballard Power Systems (BLDP)

Ballard Power Systems (BLDP) saw an increase in outstanding shares: from 298,093,270 in 2022 to 298,661,041 in 2023. Thus, no point is awarded for this criterion, since shares increased. Over the last 20 years, the shares have generally trended upwards, exemplified by a multiplier of approximately 2.5 since 2003. This continual increase indicates a potential dilution which may concern long-term investors counting on capital appreciation from limited share expansion.

Operating of Ballard Power Systems (BLDP)

Cross Margin is growing?

Gross Margin evaluates a company's financial health by indicating the percent of revenue that exceeds the cost of goods sold. A higher or improving Gross Margin suggests better operational efficiency.

Historical gross margin of Ballard Power Systems (BLDP)

Comparing the Gross Margin of Ballard Power Systems (BLDP) in 2023 and 2022 is critical in understanding its operational efficiency. The Gross Margin decreased from -0.1626 in 2022 to -0.2133 in 2023, which shows a decline rather than an improvement. This indicates that the company's cost of goods sold outpaced revenue generation at a worsening rate. Gross Margin not only deteriorated but also lagged significantly behind the Industry Median for 2023 of 0.3492. Given the results over the last 20 years, BLDP's Gross Margin has faced consistent declines since 2018, moving into negative territory by 2021. This trend can signal potential underlying issues in operational efficiency or cost management for Ballard Power Systems and adds zero points based on Piotroski's scoring method.

Asset Turnover Ratio is growing?

Change in Asset Turnover assesses the efficiency of a company’s use of its assets to generate sales. An increase suggests improved efficiency.

Historical asset turnover ratio of Ballard Power Systems (BLDP)

Ballard Power Systems showed a notable increase in asset turnover from 0.0609 in 2022 to 0.0881 in 2023, a positive development indicating more effective asset utilization in generating revenue. This improved ratio, despite being lower than earlier years, reflects a slight operational advancement. Following the Piotroski F-Score methodology, this increase in asset turnover allows Ballard Power Systems to earn 1 point for this criterion, suggesting improved asset management effectiveness compared to the previous year.


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