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Cboe Global Markets (C67.F) - Piotroski F-Score Analysis for Year 2023 (Final Score: 8/9)

Discover the Piotroski F-Score analysis of Cboe Global Markets (C67.F) for 2023, highlighting financial strength with a near-perfect score of 8/9.

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.
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Short Analysis - Piotroski Score: 8

We're running Cboe Global Markets (C67.F) 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?
1
Operating Cashflow are higher than Netincome?
1
Leverage is declining?
1
Current Ratio is growing?
1
Number of shares not diluted?
1
Cross Margin is growing?
1
Asset Turnover Ratio is growing?
0

The Piotroski F-Score model assesses a company's financial strength on a scale from 0 to 9 using nine criteria: profitability, liquidity, and operating efficiency. Cboe Global Markets (C67.F) has scored 8, indicating solid financial health. 1. Profitability: The company shows positive net income and cash flow, with a growing Return on Assets (ROA). 2. Liquidity: Leverage has decreased slightly, and the Current Ratio is improving but lags industry median slightly. 3. Operating Efficiency: Gross Margin is growing, but recent data reveals a drop in Asset Turnover Ratio. The number of shares has not diluted, impacting one of the criteria negatively.

Insights for Value Investors Seeking Stable Income

Cboe Global Markets (C67.F) looks like a solid choice for investors based on its high Piotroski F-Score of 8 out of 9. This strong score underscores its robust financial condition, with outstanding profitability metrics, manageable debt levels, and improving gross margins. Possibilities for continued ROI growth are promising due to efficient asset utilization and liquidity management. However, keep an eye on the declining Asset Turnover Ratio. Overall, it seems worthy of further consideration.

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

Profitability of Cboe Global Markets (C67.F)

Company has a positive net income?

This criterion examines if the company has positive net income in the current year, a fundamental indicator of profitability.

Historical Net Income of Cboe Global Markets (C67.F)

For Cboe Global Markets (C67.F), the net income recorded in 2023 stands at $761.4 million, which is positive. Over the last 13 years, the company has shown a consistent trend of significant net income, with specific note of becoming considerably positive from 2014 forward. Their performance over this period indicates strong profitability, and the positive result in 2023 warrants adding 1 point to the total Piotroski score.

Company has a positive cash flow?

Cash Flow from Operations (CFO) represents the amount of cash a company generates from its regular operating activities, crucial for fundamental health.

Historical Operating Cash Flow of Cboe Global Markets (C67.F)

For 2023, Cboe Global Markets (C67.F) reported a CFO of $1,075,600,000. This positive figure boosts investor confidence as it demonstrates the company's ability to generate sufficient cash from core operations. Comparing this CFO against its trend over the past 13 years, Cboe shows a commendable growth trajectory with CFO notably increasing from $262.7 million in 2014 to over a billion dollars in 2023. Such progress indicates robust operational performance and provides optimism for continued financial stability. Hence, this trend is viewed very positively, a key pointer for overall financial health.

Return on Assets (ROA) are growing?

Change in Return on Assets (ROA) is a key indicator of a company's operating efficiency. It measures the profitability of a company's assets. If a company's ROA improves, it implies better utilization of assets to generate earnings.

Historical change in Return on Assets (ROA) of Cboe Global Markets (C67.F)

Cboe Global Markets (C67.F) has shown a commendable improvement in ROA from 0.034 in 2022 to 0.1051 in 2023. This improvement adds 1 point to its Piotroski Score. Such a significant increase in ROA demonstrates an enhanced efficiency in asset utilization, converting into better profitability in the most recent fiscal year. Furthermore, the increase is substantial when compared to the industry median ROA, which saw a decline from 0.6643 in 2022 to 0.6043 in 2023. This deviation not only highlights Cboe's strong performance relative to its peer group but also underscores its resilience and superior operational management. Evaluating the ROA trend over the last 20 years, Cboe showcases fluctuating yet progressively better performance, culminating in consistently elevating its standing relative to the industry median. In 2023, with an operating cash flow of $1.0756 billion, the company exhibits robust earnings generation capability. The historical data indicative of incremental improvements cement Cboe's prowess in optimizing its asset base efficiently. This positive trajectory in ROA reflects well on Cboe's strategic maneuvers and positions it favorably in the market.

Operating Cashflow are higher than Netincome?

Operating Cash Flow being higher than Net Income

Historical accruals of Cboe Global Markets (C67.F)

A higher Operating Cash Flow (OCF) compared to Net Income (NI) typically indicates a company's earnings quality. For Cboe Global Markets (C67.F), the OCF in 2023 was $1,075,600,000 whereas the NI was $761,400,000. This is indicative of a strong financial health, reinforcing good liquidity and ability to sustain operations. Hence, 1 point for this criterion.

Liquidity of Cboe Global Markets (C67.F)

Leverage is declining?

Change in Leverage assesses changes in a company's use of debt over time. Lower leverage often suggests reduced financial risk.

Historical leverage of Cboe Global Markets (C67.F)

Based on the provided data, the leverage of Cboe Global Markets has slightly decreased from 0.2238 in 2022 to 0.2124 in 2023. This decrement in leverage indicates a moderate reduction in the company's financial risk, which is generally considered favorable from a Piotroski analysis perspective. Over the past few years, the leverage has fluctuated, but it's clear that the company has relatively maintained stable debt levels in recent years. For this criterion, we assign a score of 1 point.

Current Ratio is growing?

The Current Ratio measures a company's ability to cover its short-term obligations with its short-term assets. It's crucial as it reflects liquidity and financial health.

Historical Current Ratio of Cboe Global Markets (C67.F)

For Cboe Global Markets (C67.F), the Current Ratio improved from 1.0533 in 2022 to 1.4308 in 2023, receiving a score of 1. Although this increase suggests enhanced liquidity and a better capability to meet short-term liabilities, it's worth noting that this figure was still marginally lower than the industry median Current Ratio of 1.4355 in 2021. Looking at a broader time horizon, Cboe had higher Current Ratios in 2014 (3.3137) and 2015 (2.7585), indicating fluctuating liquidity management over the past decade.

Number of shares not diluted?

The change in shares outstanding assesses how the number of a company’s shares in circulation has changed over a period. Typically, a reduction in shares outstanding is favorable as it indicates share repurchase programs, which can improve earnings per share (EPS).

Historical outstanding shares of Cboe Global Markets (C67.F)

Examining the shares outstanding data for Cboe Global Markets, the outstanding shares have shown an increase from 106,300,000 in 2022 to 105,800,000 in 2023. This increase results in a score of 0 for the Piotroski F-score, as a reduction in outstanding shares would be more desirable. The broader dataset over the past 20 years displays significant variations, including notable share repurchases and issuances. For instance, between 2016 and 2017, there was a significant increase from 88,332,000 to 112,741,217 shares owing to business expansion strategies or acquisitions.

Operating of Cboe Global Markets (C67.F)

Cross Margin is growing?

Change in Gross Margin measures the variation of gross profit as a percentage of revenue. A consistent increase generally indicates an improvement of business efficiency or higher pricing power.

Historical gross margin of Cboe Global Markets (C67.F)

For Cboe Global Markets (C67.F), the Gross Margin increased from 0.3483 in 2022 to 0.3954 in 2023. This represents a positive development, demonstrating that Cboe has been able to improve its production efficiency or achieve better pricing. The increase is particularly notable compared to the industry median Gross Margin, which has decreased over the past two years from 0.6643 in 2022 to 0.6043 in 2023. Consequently, Cboe Global Markets achieves 1 point for this criterion. Over the past decade, Cboe's Gross Margin has recovered from lower levels and consistently outperforms the lower industry median.

Asset Turnover Ratio is growing?

One important determinant in the Piotroski analysis is the Change in Asset Turnover, which measures the efficiency of a company in using its assets to generate sales. A higher asset turnover ratio suggests better performance.

Historical asset turnover ratio of Cboe Global Markets (C67.F)

The Asset Turnover Ratio for Cboe Global Markets (C67.F) in 2023 is 0.521, a decrease from 0.5731 in 2022. This drop indicates that the company has been less efficient in using its assets to generate sales compared to the preceding year. Analyzing historical data, Cboe Global Markets' Asset Turnover exhibited significant changes, achieving a high of 1.7271 in 2015 and a consistent decline thereafter, particularly since 2016 when the ratio dropped to 1.5253 and further plummeted to 0.7764 and 0.5231 in subsequent years. In light of the period reviewed, the current ratio marks a disappointing downtrend rather than an improvement. Hence, for the Piotroski analysis, the score would be set to 0 for this criterion.


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