GEOS 9.41 (-1.98%)
US37364X1090Oil & GasOil & Gas Equipment & Services

Last update on 2024-06-07

Geospace Technologies (GEOS) - Piotroski F-Score Analysis for Year 2023 (Final Score: 7/9)

In-depth analysis of Geospace Technologies (GEOS) using the Piotroski F-Score for 2023. Final score: 7/9 indicating strong financial position.

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: 7

We're running Geospace Technologies (GEOS) 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?
0
Number of shares not diluted?
0
Cross Margin is growing?
1
Asset Turnover Ratio is growing?
1

Geospace Technologies (GEOS) has a pretty strong financial performance as per the Piotroski F-Score, scoring 7 out of 9. This score evaluates a company's financial health based on criteria including profitability, liquidity, and operating efficiency. Out of these, GEOS shows positive net income, strong cash flow, and improved return on assets, which is all good news for potential investors. However, there have been slight increases in leverage and a decrease in the current ratio, which aren't ideal but given the overall performance, these are minor concerns. The company did have a positive gross margin trend and a high asset turnover ratio, which means it is getting better at managing production costs and using its assets effectively. One downside is that the number of shares outstanding continues to increase, which could potentially dilute shareholder value. Overall, the financial picture for Geospace Technologies looks quite solid.

Insights for Value Investors Seeking Stable Income

Although Geospace Technologies has some areas needing improvement, like the current ratio and increasing leverage, its overall financial health is impressive. Its high Piotroski score (7 out of 9) suggests it’s a strong, undervalued stock with a positive financial trajectory. Potential investors should definitely consider GEOS as a worthwhile investment opportunity, especially given its strong profitability, efficient asset usage, and significant recovery in operational areas.

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

Profitability of Geospace Technologies (GEOS)

Company has a positive net income?

Check if Netincome of 12206000 in 2023 is positive or negative. If the net income is positive, add 1 point; if not, set it to 0.

Historical Net Income of Geospace Technologies (GEOS)

The net income for Geospace Technologies in 2023 is $12,206,000, which is indeed positive. This is a significant turnaround considering the negative net incomes in previous years, such as -$32,641,000 in 2015 and -$45,970,000 in 2016. The last positive net income before 2023 was in 2012 with $36,911,000. Hence, the net income criterion adds 1 point, reflecting a positive and improving trend for the company's financial health.

Company has a positive cash flow?

Cash Flow from Operations (CFO) indicates the amount of cash a company generates from its regular operating activities. Positive CFO is crucial as it reflects a company's ability to generate sufficient cash to maintain and grow operations without needing external financing.

Historical Operating Cash Flow of Geospace Technologies (GEOS)

In 2023, Geospace Technologies reported a positive CFO of $15,558,000. This is a strong figure, especially given the fact that the company experienced negative CFOs in several of the previous years such as 2012, 2013, 2014, and 2021. Over the last 20 years, the company has had fluctuating CFO figures, with notable highs like in 2013 ($43,224,000) and significant lows in 2012 (-$57,161,000). The positive CFO in 2023 not only adds 1 point to the Piotroski score but also indicates operational improvements compared to recent years. This trend suggests that the company is currently in a better position to support its operations using internally generated cash flow, which is a positive development for investors.

Return on Assets (ROA) are growing?

Return on Assets (ROA) compares the company's annual earnings to its total assets, giving a gauge of profitability.

Historical change in Return on Assets (ROA) of Geospace Technologies (GEOS)

Analyzing Geospace Technologies' ROA, it improved from -15.29% in 2022 to 8.47% in 2023. Clearly, turning a negative ROA into a positive figure is favorable, as it indicates the company's resurgence in generating profit relative to its assets. Historically, the latest ROA is commendable but still under the industry median. Over 20 years, the company’s operating cash flow widely fluctuated, perplexing overall ROA trends which ranged previously from highly profitable years like 2012 to deep losses in years like 2013.

Operating Cashflow are higher than Netincome?

Operating Cash Flow is an important measure of a company's liquidity and its ability to generate cash from its operations. When Operating Cash Flow exceeds Net Income, it usually indicates good earnings quality and strong financial health.

Historical accruals of Geospace Technologies (GEOS)

In 2023, Geospace Technologies reported an Operating Cash Flow of $15,558,000 compared to a Net Income of $12,206,000. Since the Operating Cash Flow is higher than the Net Income, it fulfills this criterion and scores 1 point. Historically, the company's Operating Cash Flow has seen significant fluctuations over the past two decades, peaking at $67,650,000 in 2014 and dipping to negative values at various points. In contrast, Net Income has also shown volatility, reaching a high of $69,557,000 in 2013 and a low of -$56,791,000 in 2017. The positive differential between Operating Cash Flow and Net Income this year suggests improved financial management and robust operational performance.

Liquidity of Geospace Technologies (GEOS)

Leverage is declining?

Change in Leverage assesses whether a company has increased or decreased its reliance on debt over time.

Historical leverage of Geospace Technologies (GEOS)

The leverage ratio for Geospace Technologies increased from 0.0057 in 2022 to 0.0033 in 2023. This rise in leverage is considered negative from a financial health perspective, as it indicates the company is using more debt relative to equity. Over the past two decades, the company's leverage has fluctuated significantly, peaking at 0.1271 in 2005, and hitting zero in multiple years. This latest increase is a reversal from generally decreasing leverage in recent years.

Current Ratio is growing?

This criterion measures the company's ability to cover short-term obligations with short-term assets. A higher current ratio is preferable as it indicates better liquidity.

Historical Current Ratio of Geospace Technologies (GEOS)

The Current Ratio for Geospace Technologies (GEOS) decreased from 4.7486 in 2022 to 3.8276 in 2023. This trend is negative because it implies a reduction in the company's liquidity, making it more challenging to cover short-term liabilities. A further evaluation of the data shows that the current ratio has been historically stable but has witnessed fluctuations, reaching as high as 16.9784 in 2016. Comparatively, the industry median in 2023 stands at 1.821, which is substantially lower than GEOS's Current Ratio. Thus, although the current ratio has declined, it remains significantly higher than the industry median. Nevertheless, this decrease results in a 0 point for this criterion.

Number of shares not diluted?

This criterion examines whether the number of shares outstanding has decreased over the period. A decrease indicates management is potentially buying back shares, which is often a signal of confidence and a way to return value to shareholders.

Historical outstanding shares of Geospace Technologies (GEOS)

The outstanding shares for Geospace Technologies have increased from 12,987,996 in 2022 to 13,146,085 in 2023, signifying an increase of 158,089 shares. Over the last 20 years, the number of shares outstanding has generally trended upwards, with notable jumps in certain years, such as in 2012 (25,672,478 shares). The increasing trend in 2023 does not meet the criterion, so we assign it 0 points. This increase could imply potential dilution of shareholders' equity, which needs to be scrutinized in terms of its rationale, such as potential capital raising efforts or stock-based compensation.

Operating of Geospace Technologies (GEOS)

Cross Margin is growing?

Gross Margin is the ratio of Gross Profit to Revenue, reflecting the company’s efficiency in controlling production costs. It highlights the profitability ratio across sales.

Historical gross margin of Geospace Technologies (GEOS)

Comparing the Gross Margin of Geospace Technologies shows a significant increase from 0.2022 in 2022 to 0.4152 in 2023, doubling in this period. Adding a point for this improvement, it indicates better cost management and sales effectiveness. Over 20 years, Geospace’s margins have fluctuated significantly, notably falling negative in 2015 and 2016. Since then, there's a recovering trend; the 2023 margin substantially surpasses both its 2022 value and the industry median (0.2368 in 2023), signaling a commendable performance. This growth reaffirms optimistic perspectives on Geospace’s managerial and operational improvements. Thus, the score for this criterion is 1 point.

Asset Turnover Ratio is growing?

Asset Turnover measures a company's efficiency in utilizing its assets to generate sales revenue. An increasing Asset Turnover implies greater efficiency.

Historical asset turnover ratio of Geospace Technologies (GEOS)

In comparing Geospace Technologies' (GEOS) Asset Turnover ratios from 2022 (0.597) to 2023 (0.8644), there is a notable increase. This positive trend signifies an enhancement in the company's efficiency in using its assets to generate revenue. Historically, reviewing the data over the last 20 years, we observe the 2023 value being significantly higher except for years such as 2006-2007, reflecting a significant recovery phase after earlier downturns. Hence, GEOS earns a point in the Piotroski Score for improved asset utilization.


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