Last update on 2024-06-07

Thales (CSF.F) - Piotroski F-Score Analysis for Year 2023 (Final Score: 5/9)

Thales (CSF.F) Piotroski F-Score Analysis for 2023 with a final score of 5/9, indicating the company's performance in profitability, liquidity, and operating efficiency.

Short Analysis - Piotroski Score: 5

We're running Thales (CSF.F) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

The Piotroski F-Score evaluates a company's financial strength on a scale from 0 to 9 based on profitability, liquidity, and operating efficiency. Thales (CSF.F) has a Piotroski score of 5 out of 9. The analysis reveals that Thales demonstrated strong profitability with a positive net income and cash flow from operations. In terms of liquidity, the company struggled with declining leverage and current ratio. From an operating efficiency perspective, the company did well in gross margin growth and reducing shares outstanding but underperformed in return on assets and asset turnover ratio.

Insights for Value Investors Seeking Stable Income

Thales (CSF.F) appears to be in a reasonably strong financial position with good profitability metrics and some operational efficiencies. However, there are notable concerns in terms of liquidity and efficient asset utilization. As an investor, it's important to further investigate these areas before making a decision. Overall, Thales can be worth considering if their profitability and some aspects of operating efficiency align with your investment goals, but be cautious about their liquidity issues.

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

Profitability of Thales (CSF.F)

Company has a positive net income?

Net Income is a crucial metric for gauging a company's profitability.

Thales (CSF.F) showed a Net Income of €1,023,400,000 in 2023, indicating profitability. Over the past 20 years, Thales has had some years of losses, particularly in 2008 and 2009, with net incomes of -€201,600,000 and -€107,600,000 respectively. However, in recent years, starting from 2010, the company has consistently posted positive net income, hitting an all-time high of €1,120,600,000 in 2021. Therefore, the positive result for 2023 earns Thales 1 point in the Piotroski Analysis.

Company has a positive cash flow?

Cash Flow from Operations (CFO) reflects the amount of cash a company generates from its regular business activities. A positive CFO indicates that the company is generating more cash than it is spending, which is essential for long-term sustainability.

The CFO for Thales (CSF.F) in 2023 stands at 1,511,400,000, indicating a positive cash flow. This merits the addition of 1 point according to the Piotroski F-Score. Historical data shows that Thales has consistently maintained a positive operating cash flow over the last 20 years, highlighting robust operational efficiency. For instance, the company reported CFO values of 1,482,700,000 in 2015, 1,771,000,000 in 2019, and 3,025,400,000 in 2021. Consequently, the trend over the years has been favorable, demonstrating the company’s ability to consistently generate healthy cash flow from its core business activities. This consistent performance underscores the strong operational health of Thales, making this a positive indicator in the Piotroski analysis.

Return on Assets (ROA) are growing?

Return on Assets (ROA) measures how efficiently a company uses its assets to generate profit. A higher ROA indicates better performance.

Thales (CSF.F) reported an ROA of 0.028 in 2023, down from 0.0333 in 2022. This 5.3% decrease indicates slightly less efficient asset utilization in 2023. Over the last two decades, Thales has had better years, like 2015 with robust performance mirrored in substantial operating cash flow, highlighting its potential.

Operating Cashflow are higher than Netincome?

The first criterion examines if Operating Cash Flow (OCF) is higher than Net Income. Higher OCF indicates better earnings quality.

For Thales (CSF.F) in 2023, the Operating Cash Flow was €1,511,400,000 while the Net Income was €1,023,400,000. Since the OCF is higher, this trend is interpreted positively, suggesting robust earnings quality. This outcome deserves 1 point. Additional data reflects that Thales' OCF has frequently surpassed Net Income over the last 20 years, reinforcing its consistent earnings quality.

Liquidity of Thales (CSF.F)

Leverage is declining?

Change in Leverage evaluates a company's debt management over time by comparing its leverage ratio across consecutive periods.

Thales (CSF.F) has seen an increase in its leverage ratio from 0.116 in 2022 to 0.1475 in 2023. Over the last 20 years, Thales' leverage has generally varied, peaking at 0.1638 in 2020. This recent increase in leverage, therefore, adds a degree of credit risk to the company's financial profile, signaling a potential rise in debt obligations relative to equity. Consequently, no point is awarded for this criterion.

Current Ratio is growing?

The Current Ratio measures a company's ability to cover its short-term liabilities with its short-term assets. A higher ratio indicates better liquidity and financial health.

The Current Ratio for Thales (CSF.F) decreased from 1.0131 in 2022 to 0.894 in 2023, indicating a deterioration in the company's liquidity. Thales was unable to improve its liquidity position, as evidenced by the declining Current Ratio, which fell below the industry median at every point in the last 20 years. The company's 2023 Current Ratio of 0.894 is significantly lower than the industry's current value of 2.1805, suggesting potential liquidity challenges. Comparing with the last two decades, Thales has consistently struggled to exceed even the 1 mark, indicating persistent liquidity management issues. This negative trend warrants attention from both investors and stakeholders. Therefore, no points are awarded for this criterion.

Number of shares not diluted?

Change in Shares Outstanding measures the company's equity dilution or consolidation, affecting shareholder ownership and market perception.

In comparing Thales' outstanding shares, we observe a decrease from 211,833,000 in 2022 to 208,507,000 in 2023. This 1.57% reduction is a positive trend as it indicates fewer shares are now circulating in the market. This maneuver typically signifies corporate buybacks or insider buy-ins, manifesting increased investor confidence and potentially boosting earnings-per-share (EPS). Historically, from 2003 (162,264,000 shares) to 2023, shares have generally increased; however, the 2023 figures suggest strategic reacquisition, aligning with shareholder interests and financial consolidation. Hence, for Piotroski analysis, Thales earns 1 point in this criterion.

Operating of Thales (CSF.F)

Cross Margin is growing?

Gross Margin, calculated as (Revenue - Cost of Goods Sold) / Revenue, measures a company's financial health and pricing power.

In 2023, Thales (CSF.F) saw an increase in its Gross Margin to 0.2586, up from 0.2536 in 2022. This uptick of 0.005 points or 0.5% indicates improved operational efficiency or successful cost management, earning an additional point in the Piotroski Analysis. Over the last 20 years, Thales' Gross Margin has averaged around 0.232, generally below the industry median. The consistency and recent surpassing of the industry median suggest a positive trajectory in performance. This favorable trend marks Thales' strong capacity to enhance its profitability. Therefore, this trend is good for the given criteria.

Asset Turnover Ratio is growing?

Asset Turnover is a measure of a firm's efficiency in generating sales revenue from its assets. Higher values indicate better performance.

Comparing the asset turnover ratios, 0.5035 in 2023 and 0.5224 in 2022, we observe a decrease. Therefore, in 2023, the asset turnover has decreased, marking a decline in the company's efficiency in utilizing its assets to generate revenue. The long-term data reveals fluctuation, highlighting some years with high ratios (e.g., 2005 with 0.7495) and low points in recent years. Hence, Thales scores 0 points for this criterion, as a higher ratio is preferred for a positive evaluation.