BXP 68.89 (+1.5%)
US1011211018REITsREIT - Office

Last update on 2024-06-05

Boston Properties (BXP) - Piotroski F-Score Analysis for Year 2023 (Final Score: 4/9)

Explore the Piotroski F-Score analysis of Boston Properties (BXP) for 2023, revealing key insights into financial health with a final score of 4 out of 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: 4

We're running Boston Properties (BXP) 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?
0
Asset Turnover Ratio is growing?
0

The Piotroski F-Score analysis for Boston Properties (BXP) reveals a score of 4 out of 9, indicating a mixed financial position. Key profitable signs include a positive net income of $190 million and strong operating cash flow of $1.3 billion, which consistently shows an upward trend. However, areas of concern are a declining ROA and leverage ratio, growing share counts, and reduced gross margin and asset turnover ratio.

Insights for Value Investors Seeking Stable Income

Based on the Piotroski F-Score, Boston Properties (BXP) shows some strengths, especially in cash flow and current ratio. However, substantial weaknesses include growing debt and declining asset efficiency metrics. If you are a risk-averse investor seeking strong, undervalued stocks, you may want to look for investments with a higher Piotroski score. For those interested in holding, consider monitoring improvements in leverage and asset management.

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

Profitability of Boston Properties (BXP)

Company has a positive net income?

This criterion evaluates whether the company's net income is positive in the most recent year. It helps determine if the company is profitable, which is essential for financial health.

Historical Net Income of Boston Properties (BXP)

The net income for Boston Properties (BXP) in 2023 is $190,215,000, indicating a positive net income. This contributes favorably to the Piotroski score, adding 1 point. However, historically, this value is among the lowest over the past 20 years, with the highest being $1,324,690,000 in 2007. The overall trend over the years displays volatility, with significant dips in certain years such as 2008 and 2020, but also peaks such as in 2019 and 2021. Nonetheless, maintaining profitability despite economic downturns is a positive sign.

Company has a positive cash flow?

Cash Flow from Operations (CFO) represents the amount of money a company generates from its regular business operations. Positive CFO is crucial as it indicates that a company is generating enough cash to maintain and grow its operations without relying on external financing.

Historical Operating Cash Flow of Boston Properties (BXP)

For Boston Properties (BXP), the CFO in 2023 is $1,301,520,000, which is a positive figure. This is a good trend and adds 1 point to the Piotroski Analysis score. Observing data from the past 20 years, BXP has shown a strong and generally increasing trend in its CFO. For example, in 2003, the CFO was $488,275,000 and has steadily grown, reaching over a billion dollars consistently since 2016. This positive and increasing trend in CFO demonstrates BXP's robust business operations and its capacity to generate ample operational cash flow, underscoring financial health and operational efficiency.

Return on Assets (ROA) are growing?

Return on Assets (ROA) signifies the company's ability to generate profits from its assets. A year-over-year increase is considered positive as it suggests improved efficiency in asset utilization.

Historical change in Return on Assets (ROA) of Boston Properties (BXP)

The ROA for Boston Properties (BXP) decreased from 0.0365 in 2022 to 0.0076 in 2023, which represents a significant decline rather than an increase. Despite this falling trend, it is essential to note that the industry median ROA remains significantly higher, at 0.6434 in 2023. The continuing disparity between BXP's ROA and the industry benchmark indicates underperformance in asset utilization, which is detrimental for stakeholders. Therefore, the score for this criterion in the Piotroski analysis is 0 as the ROA did not increase in 2023.

Operating Cashflow are higher than Netincome?

One of the criteria in Piotroski's analysis is to check if the company's operating cash flow is higher than its net income. This is an important indicator of the quality of earnings, as it shows that a company is able to convert its revenue into cash efficiently. Net income can sometimes be affected by non-cash items, making operating cash flow a better measure of a company's financial health.

Historical accruals of Boston Properties (BXP)

Boston Properties' operating cash flow for 2023 is $1,301,520,000, while its net income is $190,215,000. The operating cash flow is significantly higher than net income for 2023, indicating a positive trend. This suggests that the company's earnings are of high quality and are backed by actual cash flows. Given this large gap, it demonstrates that Boston Properties has strong cash conversion capabilities. Based on these numbers, Boston Properties will earn 1 point for this criterion. Additional data reveals that the company has consistently shown strong operating cash flows over two decades, which further supports a stable and healthy financial performance.

Liquidity of Boston Properties (BXP)

Leverage is declining?

Change in leverage measures the change in debt-to-equity ratio, indicating the company's reliance on debt for its financing needs.

Historical leverage of Boston Properties (BXP)

In 2023, the leverage ratio for Boston Properties increased to 0.6388 from 0.607 in 2022. This signifies that the company's reliance on debt has increased. Over the past 20 years, the leverage ratio has seen fluctuations, with the leverage ratio peaking at 0.6388 in 2023. The increasing trend reflects potential risks associated with higher debt, such as interest obligations that could impact future profitability. The 2023 increase results in a score of 0 for this criterion, as the rising debt levels denote heightened financial risk.

Current Ratio is growing?

The Current Ratio is a liquidity ratio that measures a company’s ability to pay short-term obligations or those due within one year. It is important to consider because it indicates the company's short-term financial health and its efficiency in using its assets.

Historical Current Ratio of Boston Properties (BXP)

The Current Ratio for Boston Properties (BXP) has increased from 3.1594 in 2022 to 4.1856 in 2023. This increase is favorable as it signifies a strengthened short-term liquidity position, meaning BXP has become more capable of covering its short-term liabilities with its short-term assets. Additionally, considering the industry median current ratio for 2023 is 0.7672, BXP's current ratio stands significantly higher, suggesting better liquidity compared to its peers. Looking back over the past 20 years, BXP has exhibited substantial variation in its current ratio, peaking at 9.0019 in 2011 before a general declining trend until a recent uptick. This trend reflects BXP’s efforts in enhancing its asset efficiency and managing liabilities, thus substantiating a positive outlook.

Number of shares not diluted?

Change in Shares Outstanding considers the number of shares a company has issued to investors. A decreasing share count can signal share buybacks, which often positively impact shareholder value.

Historical outstanding shares of Boston Properties (BXP)

In 2022, Boston Properties (BXP) reported 156,724,250 outstanding shares. By 2023, this number had increased slightly to 156,863,500 shares. This trend indicates that Boston Properties has issued more shares, rather than repurchasing them. Therefore, they do not get a point for this criterion. Over the past 20 years, data shows a consistent pattern of increasing shares outstanding, demonstrating a long-term strategy of issuing shares to raise capital rather than focusing on share buybacks.

Operating of Boston Properties (BXP)

Cross Margin is growing?

Gross Margin comparisons help assess the efficiency of a company's core operations by looking at the proportion of revenues remaining after accounting for direct production costs. An increasing gross margin generally signifies improving efficiencies.

Historical gross margin of Boston Properties (BXP)

In 2023, Boston Properties (BXP) posted a Gross Margin of 0.6285 compared to 0.6347 in 2022. This represents a decrease, not an increase. When we examine the long-term trend, the Gross Margin has seen fluctuations, particularly dipping from a high of 0.6737 in 2007. Comparatively, the industry median Gross Margin in 2023 was 0.6434. Despite the decrease, Boston Properties' Gross Margin is close to, but still below the industry median. This trend can be viewed as bad for this criterion.

Asset Turnover Ratio is growing?

Asset Turnover measures a company's efficiency in using its assets to generate revenue. An increase would indicate better management efficiency.

Historical asset turnover ratio of Boston Properties (BXP)

In 2023, Boston Properties reported an Asset Turnover of 0.1303, which is a decline from 0.1335 in 2022. This indicates a slight decrease in the company's efficiency in using its assets to generate revenue. Over the past 20 years, the Asset Turnover ratio has fluctuated, peaking at 0.159 in 2004 and reaching low points like 0.1197 in 2014 and 0.1199 in 2013. The recent decrease in 2023 results in a score of 0 for this criterion, suggesting room for improvement in asset utilization efficiency.


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.