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Last update on 2024-06-07

EZCORP (EZPW) - Piotroski F-Score Analysis for Year 2023 (Final Score: 6/9)

EZCORP (EZPW) Piotroski F-Score Analysis for 2023 with a final score of 6/9. Detailed financial insights on profitability, liquidity, and efficiency.

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: 6

We're running EZCORP (EZPW) 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?
1
Current Ratio is growing?
0
Number of shares not diluted?
1
Cross Margin is growing?
0
Asset Turnover Ratio is growing?
1

The Piotroski F-Score is a measure to assess the financial strength of a company, using criteria related to profitability, liquidity, and leverage. EZCORP (EZPW) scored a 6 out of 9, indicating a moderately strong financial position. Specific observations include a positive net income and cash flow, an efficient asset turnover, and a reduction in the number of shares outstanding. However, declines were noted in the Return on Assets (ROA), Current Ratio, and Gross Margin, suggesting some areas of weakness.

Insights for Value Investors Seeking Stable Income

Based on the analysis, EZCORP seems to have a mix of strengths and weaknesses in its financial health. The score of 6 suggests it is worth considering, but potential investors should be cautious about the declining ROA, Current Ratio, and Gross Margin. It's recommended to keep an eye on future performance and conduct a more detailed review before making any investment decisions.

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

Profitability of EZCORP (EZPW)

Company has a positive net income?

Assessing net income is crucial as it represents a company's profitability. A positive net income is typically a sign of financial health and operational success.

Historical Net Income of EZCORP (EZPW)

For 2023, EZCORP reported a net income of $38,463,000, which is positive. According to the Piotroski score criteria, this would add 1 point in favor of the company. Not only is this a positive result, but it also conveys a recovery trend from previous years where several instances of net income were negative, such as significant losses in 2014, 2015, and notably in 2020. Over the past two decades, the net income has oscillated, hitting as high as $143,708,000 in 2012 and dipping into negative territories for subsequent years. This return to positive territory is a healthy indicator and contributes positively to the overall financial evaluation.

Company has a positive cash flow?

The Cash Flow from Operations (CFO) assesses the company's ability to generate cash from its regular operational activities.

Historical Operating Cash Flow of EZCORP (EZPW)

The Cash Flow from Operations (CFO) for EZCORP (EZPW) in 2023 is $101,834,000, which is positive. This indicates that EZCORP was able to generate substantial cash from its operations, a critical indicator of the firm's operational efficiency. When compared to the past two decades, 2023 shows a significant recovery from the previous two years' figures of $66,535,000 in 2022 and $46,438,000 in 2021. Over the last 20 years, EZCORP's CFO has generally trended positively, albeit with fluctuations, suggesting overall stability in its core business operations. The positive trends in CFO indicate robust operating performance and potentially healthy reinvestment opportunities.

Return on Assets (ROA) are growing?

Return on Assets (ROA) measures a company's ability to generate profit from its assets, indicating efficiency and profitability. An increase in ROA is typically a positive sign of financial health and operational efficiency, making it an essential criterion for investment analysis.

Historical change in Return on Assets (ROA) of EZCORP (EZPW)

EZCORP's Return on Assets (ROA) decreased from 0.0384 in 2022 to 0.0273 in 2023. This decline implies a reduction in profitability and efficiency, which is not a positive trend. According to the last 20 years data, while EZCORP's ROA has fluctuated, the industry median ROA has consistently remained significantly higher, indicating that EZCORP has struggled to match the profitability relative to its peers. Given the decline in ROA, EZCORP scores 0 points in this criterion.

Operating Cashflow are higher than Netincome?

Piotroski F-Score's criterion that checks whether Operating Cash Flow is higher than Net Income is crucial to determine the quality of earnings. A positive relationship indicates good earnings quality.

Historical accruals of EZCORP (EZPW)

For the fiscal year 2023, EZCORP (EZPW) showcased an Operating Cash Flow (OCF) of $101.834 million, significantly surpassing its Net Income of $38.463 million. This results in a 1-point addition in the Piotroski F-Score for the company. Historically, EZCORP has varied in its alignment between OCF and Net Income, but the significant disparity between the two in 2023 marks a positive trend. Operating Cash Flow is a more reliable indicator of financial health as it strips out non-cash earnings and provides a true picture of cash earnings. Considering the past 20 years, an analysis reveals that the company's OCF has generally been higher than its Net Income, barring some fluctuations. The consistency in higher OCF suggests that EZCORP's earnings quality remains robust, especially given the $101.834 million OCF in 2023.

Liquidity of EZCORP (EZPW)

Leverage is declining?

Leverage examines a company's debt levels, critical for understanding financial risk.

Historical leverage of EZCORP (EZPW)

Comparing EZCORP's leverage ratios, leverage has indeed decreased slightly from 0.3662 in 2022 to 0.3536 in 2023. This suggests an improvement with regards to debt management, demonstrating a minor reduction in financial risk. This decline is positive when considering the historical leverage data. Over the past two decades, EZCORP has seen varied leverage levels, notably higher in some years, e.g., 0.3376 in 2020. This recent reduction continues a positive trend, albeit subtly.

Current Ratio is growing?

The Current Ratio compares a company's current assets to its current liabilities and is a measure of liquidity. It indicates a company's ability to cover short-term obligations with its short-term assets. A higher ratio typically signifies good short-term financial health.

Historical Current Ratio of EZCORP (EZPW)

For EZCORP (EZPW), the Current Ratio decreased from 4.2139 in 2022 to 3.7491 in 2023, indicating a decrease in liquidity. This decline results in a score of 0 for this criterion. Comparing to the past trends, it is noteworthy that EZCORP's Current Ratio, although volatile, has always been well above the industry median, which was 1.4517 in 2023. Historically, the lowest ratio EZCORP recorded was in 2015 with 2.6716, and the highest was in 2003 at 8.0492. Despite a decrease, EZCORP's ratio for 2023 remains healthy compared to the industry standard.

Number of shares not diluted?

Shares outstanding indicates the total number of shares held by shareholders. It’s essential to monitor changes as this impacts shareholder value.

Historical outstanding shares of EZCORP (EZPW)

In 2022, EZCORP had 56,498,000 shares outstanding, whereas in 2023, the number decreased to 55,586,000. This represents a decrease in shares outstanding by approximately 912,000 shares. Lower outstanding shares are generally positive as they indicate potential share repurchases, signaling management’s belief in undervalued stocks and thus enhancing shareholder value. Hence, EZCORP earns 1 point in the Piotroski analysis for this criterion.

Operating of EZCORP (EZPW)

Cross Margin is growing?

Gross Margin represents the percent of total sales revenue that the company retains after incurring the direct costs associated with producing the goods and services sold by a company. It is crucial because it reflects the core profitability of a company's operational efficiency.

Historical gross margin of EZCORP (EZPW)

The Gross Margin for EZCORP (EZPW) decreased from 0.596 in 2022 to 0.5813 in 2023. This results in a score of 0 for this criterion. Over the last 20 years, the company's Gross Margin has varied, peaking at 0.6952 in 2008, and experiencing a significant dip to 0.546 in 2020. Compared to the industry median, which was generally higher and more volatile, EZCORP's Gross Margin in 2023 is relatively stable. However, the slight decline over the past year is a negative indicator for the company's profitability moving forward.

Asset Turnover Ratio is growing?

Asset Turnover measures how efficiently a company uses its assets to generate sales. An increasing Asset Turnover is generally positive.

Historical asset turnover ratio of EZCORP (EZPW)

EZCORP's Asset Turnover ratio increased from 0.6779 in 2022 to 0.7452 in 2023. This improvement indicates that the company has become more efficient in utilizing its assets to generate revenue. This is a positive trend, as higher efficiency can lead to better profitability. Analyzing the historical data, EZCORP's asset turnover has gone through various stages, reaching a high of 1.7388 in 2006 but showing a downward slope in the subsequent years. However, the recent uptick suggests a potential turnaround.


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