CHRW 87.03 (+0.31%)
US12541W2098TransportationIntegrated Freight & Logistics

Last update on 2024-06-06

C.H. Robinson Worldwide (CHRW) - Piotroski F-Score Analysis for Year 2023 (Final Score: 5/9)

C.H. Robinson Worldwide (CHRW) Piotroski F-Score analysis for 2023 rates the company's financial health and efficiency with a final score of 5 out of 9 points.

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: 5

We're running C.H. Robinson Worldwide (CHRW) 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?
1
Cross Margin is growing?
0
Asset Turnover Ratio is growing?
0

We're analyzing C.H. Robinson Worldwide (CHRW) using the Piotroski F-Score to determine its financial health and investment potential. CHRW scores a 5 out of 9, indicating moderate financial strength. The score is derived from 9 criteria focused on profitability, liquidity, and operating efficiency.

Insights for Value Investors Seeking Stable Income

Based on the Piotroski F-Score of 5, C.H. Robinson Worldwide (CHRW) demonstrates a moderate level of financial health. While the company shows strengths in profitability and liquidity, indicated by positive net income and cash flow, as well as a growing current ratio, there are also concerns, such as increasing leverage and declining asset turnover. As an investor, this stock might be worth further investigation, but be cautious of its mixed performance indicators.

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

Profitability of C.H. Robinson Worldwide (CHRW)

Company has a positive net income?

Net Income: This indicates whether a company is generating profit. Positive net income adds one point in Piotroski analysis.

Historical Net Income of C.H. Robinson Worldwide (CHRW)

C.H. Robinson Worldwide (CHRW) recorded a net income of $325,129,000 in 2023, which is positive. This indicates the company has generated a profit in the most recent fiscal year, adding one point in the Piotroski analysis. Looking at the historical data for the past 20 years, CHRW has consistently maintained positive net income, fluctuating between $114,123,000 in 2003 and reaching a peak of $940,524,000 in 2022. Although 2023's value indicates a significant drop from the previous year's peak, the positive net income is still a favorable indicator, highlighting the company's year-over-year profitability. Hence, CHRW scores 1 point for this criterion.

Company has a positive cash flow?

A positive cash flow from operations (CFO) indicates a company's ability to generate sufficient cash to maintain and grow its operations, which is a critical measure of financial health.

Historical Operating Cash Flow of C.H. Robinson Worldwide (CHRW)

For the fiscal year 2023, C.H. Robinson Worldwide (CHRW) reported a cash flow from operations (CFO) of $731,946,000, which is positive. This suggests that CHRW is generating adequate cash flow from its core operating activities, indicative of good financial health. Compared to the previous years, this CFO figure demonstrates a notable reduction from the peak of $1,650,171,000 reported in 2022, yet it remains robust and well above the negative outlier year of 2021, which showcased just $94,955,000. Consequently, the company earns one point for this criterion in the Piotroski Analyses, underscoring its capability to consistently produce cash from its operations.

Return on Assets (ROA) are growing?

Explain the criterion for C.H. Robinson Worldwide (CHRW) and why it is important to consider

Historical change in Return on Assets (ROA) of C.H. Robinson Worldwide (CHRW)

The criterion examines the change in Return on Assets (ROA) between successive years, in this case, 2022 and 2023. ROA is a key indicator of how effectively a company is using its assets to generate earnings. It reflects the profitability and efficiency of a company. An increase in ROA generally signifies that the company is improving its ability to convert its investments into net income.

Operating Cashflow are higher than Netincome?

Operating Cash Flow higher than Net Income

Historical accruals of C.H. Robinson Worldwide (CHRW)

The Operating Cash Flow (OCF) for C.H. Robinson Worldwide (CHRW) in 2023 stands at $731,946,000, whereas the Net Income is $325,129,000. Since the OCF is higher than the Net Income, this generates a Piotroski score of 1 for this criterion. Generally, a higher OCF compared to Net Income is a positive sign, indicating good cash generation relative to reported earnings. per the Piotroski F-Score methodology, this bodes well for shareholders as it suggests the company’s earnings quality is robust.

Liquidity of C.H. Robinson Worldwide (CHRW)

Leverage is declining?

Change in leverage measures the change in a company’s debt versus its equity. A decrease in leverage indicates improved financial stability.

Historical leverage of C.H. Robinson Worldwide (CHRW)

C.H. Robinson Worldwide's (CHRW) leverage has increased from 0.2082 in 2022 to 0.3295 in 2023, marking a significant uptick in its leverage ratio. Historically, leverage peaked slightly in 2018 at 0.303 and trended downward until 2023. The rise in leverage in 2023 is therefore concerning as it indicates the company is relying more on debt, making its financial position riskier. Consequently, this change deserves a score of 0, reflecting the increased financial risk for the company.

Current Ratio is growing?

The current ratio compares a company's current assets to its current liabilities. An increasing current ratio often signifies improving liquidity and financial health, allowing the company to cover its short-term obligations.

Historical Current Ratio of C.H. Robinson Worldwide (CHRW)

The current ratio for C.H. Robinson Worldwide (CHRW) has increased from 1.0802 in 2022 to 1.4039 in 2023. This is a notable improvement and suggests that CHRW's liquidity has strengthened, enabling better coverage of short-term liabilities. Adding historical perspective, the current ratio in 2022 was relatively low compared to its historical values, implying potential past liquidity challenges. With a current ratio closer to its historical norm now, CHRW signals a rebound towards more stable financial footing. Consequently, 1 point is added for this criterion, reflecting positive liquidity trends.

Number of shares not diluted?

Change in Outstanding Shares provides insight into a company's capital management. A decrease typically indicates share buybacks, which can be a sign of financial health and confidence by management.

Historical outstanding shares of C.H. Robinson Worldwide (CHRW)

C.H. Robinson Worldwide's outstanding shares decreased from 125,743,000 in 2022 to 118,551,000 in 2023. This represents a reduction of approximately 7,192,000 shares. Historically, the number of outstanding shares has seen a downward trend, particularly significant reductions since 2014. This decrease is positive as it suggests that the company has been actively buying back shares, which could be perceived as a signal of management’s confidence in the company's prospects. Buybacks can enhance shareholder value by reducing the share supply and potentially increasing the stock price. Consequently, for this criterion, 1 point is awarded.

Operating of C.H. Robinson Worldwide (CHRW)

Cross Margin is growing?

Change in Gross Margin evaluates if the company's profitability and efficiency in production have improved or deteriorated year-over-year. It's significant because increased Gross Margins signify better cost management and higher revenue from operations.

Historical gross margin of C.H. Robinson Worldwide (CHRW)

Comparing the Gross Margin of C.H. Robinson Worldwide (CHRW) over the past two years, we see that it decreased from 0.0757 in 2022 to 0.0647 in 2023. This would result in a score of 0 for this Piotroski criterion, indicating a negative trend in profitability and cost control. Over the past 20 years, the company's Gross Margin reached its peak at 0.1824 in 2009, but since has generally been on a declining trend. Meanwhile, the Industry Median Gross Margin has been significantly higher, closing at 0.1817 in 2023. CHRW's margin falling from an already perilous position compared to the industry benchmark suggests underlying issues with either pricing power or operational efficiency, or possibly both.

Asset Turnover Ratio is growing?

The criterion focuses on the change in Asset Turnover, which measures a company's efficiency in using its assets to generate revenue.

Historical asset turnover ratio of C.H. Robinson Worldwide (CHRW)

Between 2022 and 2023, C.H. Robinson Worldwide's Asset Turnover decreased from 3.8195 to 3.1592. This indicates a less efficient use of assets in generating revenue in 2023 compared to the previous year. This trend is unfavorable in the context of the Piotroski Analysis, as a decrease in Asset Turnover suggests declining operational efficiency. Hence, the rating for this criterion is 0 points. Historically, C.H. Robinson Worldwide has demonstrated varying efficiency, with a noticeably higher Asset Turnover ratio in earlier years, peaking at 5.001 in 2011 before experiencing a general downtrend.


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