GLW 46.2 (+0.96%)
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Last update on 2024-06-07

Corning (GLW) - Piotroski F-Score Analysis for Year 2023 (Final Score: 4/9)

Comprehensive Piotroski F-Score analysis for Corning (GLW) in 2023 reveals a score of 4/9, highlighting areas of strength and weakness in financial health.

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: 4

We're running Corning (GLW) 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?
0
Cross Margin is growing?
0
Asset Turnover Ratio is growing?
0

The Piotroski F-Score is used to evaluate the strength of a company's financial position based on nine criteria. Corning (GLW) scored 4 out of 9, indicating mixed results. For profitability, Corning had positive net income and operating cash flow higher than net income, which is good. However, its return on assets (ROA) had decreased. In terms of liquidity, while the current ratio improved, leverage increased and outstanding shares were diluted. As for operating efficiency, the gross margin and asset turnover ratio both declined.

Insights for Value Investors Seeking Stable Income

Based on the Piotroski F-Score of 4, Corning shows both strengths and weaknesses. Positive factors include good cash flow and improved liquidity, but increasing leverage, stock dilution, and declining efficiency are concerns. Investors may want to proceed with caution, performing further research and considering other factors before making a decision.

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

Profitability of Corning (GLW)

Company has a positive net income?

Check if the Netincome for Corning (GLW) is positive.

Historical Net Income of Corning (GLW)

In 2023, Corning reported a net income of $581 million, which is positive; thus, it adds 1 point in the Piotroski Analysis. Over the past 20 years, Corning has shown substantial variations in net income. Although they have experienced some negative years, overall trends suggest a capability to recover, with significant profitability in certain years such as 2008 ($5.26 billion) and 2016 ($3.70 billion). Therefore, a positive net income in 2023 indicates resilience and growth potential.

Company has a positive cash flow?

Cash Flow from Operations (CFO) assesses the annual monetary inflows and outflows due to a company's core business activities. Positive CFO signifies effective cash generation.

Historical Operating Cash Flow of Corning (GLW)

Corning's CFO for 2023, amounting to $2,005,000,000, is indeed positive. This reflects the company's consistent ability to generate cash from its core business functions, adding a favorable point under the Piotroski analysis framework. Historically, Corning has shown a robust pattern in generating positive cash flows from operations, as indicated by figures over the last two decades. There have been fluctuations in CFO over these years, but the overall trend reveals resilience and an ability to sustain and grow its operating cash flows, demonstrating sound business operations and efficient cash management.

Return on Assets (ROA) are growing?

Change in return on assets (ROA) year-on-year evaluates the company’s efficiency in using assets to generate profits.

Historical change in Return on Assets (ROA) of Corning (GLW)

Comparing the return on assets (ROA) of 0.02 in 2023 with the 0.0441 in 2022 for Corning (GLW), it is evident that there is a decrease in ROA. Subsequently, Corning's performance regarding the efficient use of its assets to generate earnings has weakened. This is not favorable, and hence, we don't add a point for the ROA criteria in Piotroski Analysis.\n\nWhen contextualized over the last 20 years, it is important to note that Corning's ROA has fluctuated significantly. Despite this 2023 decline, prior years indicated occasional robust performance, as seen in 2010 (ROA: 0.3835) and 2014 (ROA: 0.4709). In comparison, these surpass not just Corning's historical performance but also the industry's median ROA, typically ranging between 0.2 and 0.3. Persistent lower ROA could concern investors and stakeholders, prompting a rigorous assessment of operational efficiencies. Thus, this downtrend in 2023 should warrant cautious scrutiny and potential strategic realignments.

Operating Cashflow are higher than Netincome?

Having Operating Cash Flow higher than Net Income indicates strong cash generation ability and less earnings manipulation.

Historical accruals of Corning (GLW)

For 2023, Corning's Operating Cash Flow stands at $2.005 billion compared to its Net Income of $581 million. This yields a ratio of approximately 3.45, underscoring a robust cash generation ability. In the context of Piotroski scores, this strong cash flow compared to net income results in adding 1 point. Historically, Corning has consistently demonstrated robust cash flows, with significant peaks (such as $4.709 billion in 2014) and maintaining an overall upward trend, albeit with occasional dips. This consistency reaffirms Corning's operational efficacy and financial health, suggesting minimal earnings manipulation and effective cash conversion.

Liquidity of Corning (GLW)

Leverage is declining?

The Change in Leverage criterion measures whether a company has reduced its leverage, indicating improved financial health and decreased risk.

Historical leverage of Corning (GLW)

For Corning (GLW), the leverage ratio has increased from 0.2536 in 2022 to 0.2825 in 2023. This is an unfavorable trend, signifying a higher level of debt relative to equity, which increases financial risk. Historically, Corning's leverage ratio showed a downward trend from 0.2481 in 2003 to 0.0995 in 2007 before gradually moving upwards again. This recent increase mirrors the higher ratios seen during financial instability and signals a potential risk of overleveraging.

Current Ratio is growing?

Current Ratio measures a company's ability to cover short-term liabilities with short-term assets. A rising ratio indicates improved liquidity.

Historical Current Ratio of Corning (GLW)

In 2023, Corning's (GLW) Current Ratio was 1.6698, compared to 1.4402 in 2022, marking an increase. This improvement indicates enhanced liquidity, giving Corning a 1-point score according to the Piotroski criterion. Over 20 years, the ratio has fluctuated, peaking at 5.0922 in 2013 and trending downward to 1.6698 in 2023. Historically, Corning generally traded below the industry median ratio, which stood at 2.0742 in 2023, underscoring a lower but improving liquidity relative to peers.

Number of shares not diluted?

Outstanding shares indicate the total number of shares currently issued and held by all shareholders—critical for understanding stock dilution.

Historical outstanding shares of Corning (GLW)

In 2022, Corning had 843 million outstanding shares, which increased to 848 million in 2023. This represents an increase of 5 million shares. Over the last two decades, Corning's outstanding shares have generally decreased from approximately 1.25 billion shares in 2003 to 848 million in 2023, with occasional increases. The recent increase from 2022 to 2023 reflects an issuance of more shares, which could lead to stock dilution. Therefore, for this criterion, Corning scores 0 points.

Operating of Corning (GLW)

Cross Margin is growing?

Change in Gross Margin: Comparing Gross Margins of consecutive years to identify whether the Gross Margin has improved or deteriorated.

Historical gross margin of Corning (GLW)

In 2023, Corning (GLW) reported a Gross Margin of 0.3123, which is a slight decrease compared to 0.3176 in 2022. This decline indicates that the company was slightly less efficient at converting revenue into profit before accounting for other costs compared to the previous year. Historically, Corning has shown fluctuations in its Gross Margin, peaking at 0.4691 in 2007 and observing a gradual decline in recent years. Despite this decrease, Corning's Gross Margin in 2023 remains higher than the industry's median Gross Margin of 0.2104, highlighting its favorable position relative to peers. Consequently, this criterion would score 0 points.

Asset Turnover Ratio is growing?

Asset Turnover is a measure of a firm's efficiency in using its assets to generate revenue.

Historical asset turnover ratio of Corning (GLW)

Corning's Asset Turnover ratio declined from 0.4757 in 2022 to 0.4341 in 2023. This decline indicates that the company became less efficient in utilizing its assets to produce revenue compared to the previous year. Historical data shows fluctuating efficiency over the last 20 years, with 2021 (0.4622) also being notable for efficiency. However, the recent decrease is not a positive signal, leading to a score of 0 for this criterion.


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