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Last update on 2024-06-04

Indra Sistemas (IDA.F) - Piotroski F-Score Analysis for Year 2023 (Final Score: 8/9)

Analyze Indra Sistemas' (IDA.F) financial health in 2023 with a strong Piotroski F-Score of 8/9, indicating robust 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: 8

We're running Indra Sistemas (IDA.F) 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?
1
Cross Margin is growing?
1
Asset Turnover Ratio is growing?
1

The Piotroski F-Score is used to evaluate a company's financial strength, with a score between 0 to 9. Indra Sistemas (IDA.F) achieved a score of 8 based on nine criteria concerning profitability, liquidity, and operating efficiency. The company showed positive net income, strong cash flow from operations, improved return on assets, higher operating cash flow than net income, decreasing leverage, growing gross margin, and improving asset turnover ratio. Except for the current ratio, which slightly declined, and the number of shares which indicated possible inaccuracies, Indra Sistemas depicts solid financial health with improvements in various sectors over the years.

Insights for Value Investors Seeking Stable Income

With a high Piotroski F-Score of 8 out of 9, Indra Sistemas demonstrates strong financial health and potential for undervalued investment. The improvements in net income, cash flow, return on assets, and decreasing leverage are positive indicators. However, potential investors should consider looking into the accuracy of outstanding shares data and the declining current ratio. Overall, Indra Sistemas appears to be a promising candidate for further research and potential investment but verifying specific details and current financial stability is recommended.

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

Profitability of Indra Sistemas (IDA.F)

Company has a positive net income?

Net income reflects a company's profit after all expenses have been deducted, crucial for valuation.

Historical Net Income of Indra Sistemas (IDA.F)

For 2023, Indra Sistemas (IDA.F) reported a net income of €205,752,000, which is a positive figure. Over the years, Indra’s net income has fluctuated significantly. After a notable loss in 2016 (€-641,189,000), there has been a gradual improvement reflecting possibly successful strategic changes. The consistent positive net income from 2021 onwards suggests a trend of recovery and stability. Adding 1 point is valid as the net income is positive.

Company has a positive cash flow?

Cash Flow from Operations (CFO) measures the money a company generates from its core business operations.

Historical Operating Cash Flow of Indra Sistemas (IDA.F)

For Indra Sistemas (IDA.F) in 2023, the Cash Flow from Operations (CFO) is €379,521,000 which is positive, therefore it adds one point to the Piotroski score. This trend is a positive indicator of the company's ability to generate cash from its operating activities. Over the past 20 years, Indra’s cash flow from operations has shown a notable increase, rising sharply from €24,112,000 in 2015 to €379,521,000 in 2023. This consistent improvement demonstrates robust core business performance and efficient cash management.

Return on Assets (ROA) are growing?

Change in ROA measures the profitability improvement over a period. It is important because it demonstrates a company's effectiveness at converting its assets into net income.

Historical change in Return on Assets (ROA) of Indra Sistemas (IDA.F)

Comparing the Return on Assets (ROA) for Indra Sistemas, we see an increase from 0.0379 in 2022 to 0.0444 in 2023. This increase translates to an addition of 1 point in the Piotroski score. This upward trend marks an improvement in asset utilization efficiency. The progression suggests that Indra Sistemas is becoming more efficient at generating profits from its assets. Despite the ROA remaining significantly below the industry median of 0.3391 in 2023, observing a consistent positive trajectory in a company's ROA points towards better financial health, encouraging investor confidence.

Operating Cashflow are higher than Netincome?

This criterion compares the operating cash flow to net income. If operating cash flow exceeds net income, it indicates strong cash generation and quality of earnings.

Historical accruals of Indra Sistemas (IDA.F)

Indra Sistemas reported an operating cash flow of €379.5 million and a net income of €205.8 million in 2023. As the operating cash flow is higher than the net income, this adds 1 point to the Piotroski score. This trend is positive as it reflects robust cash generation capabilities. Historically, the company has shown significant improvements in cash flow generation, e.g., from €241.1 million in 2015 to €379.5 million in 2023. Furthermore, net income has rebounded from negative values in earlier periods, such as 2014 with a net loss of €91.9 million, to consistent profitability in recent years.

Liquidity of Indra Sistemas (IDA.F)

Leverage is declining?

Change in leverage measures the shift in a company's debt relative to its equity over a period. It examines if the company's financial risk has increased or decreased.

Historical leverage of Indra Sistemas (IDA.F)

Indra Sistemas' leverage decreased from 0.1935 in 2022 to 0.1521 in 2023. A decrease in leverage signifies a reduction in the company's financial risk and reliance on debt, which is typically seen as a positive trend. Over the past 20 years, leverage has fluctuated significantly, with a peak around 2016 (0.3629) and a notable decrease since then, signifying a conscious effort by the company to improve its financial stability and reduce debt burdens. This trend aligns with good corporate financial health practices.

Current Ratio is growing?

The current ratio examines a company’s ability to pay off its short-term liabilities with its short-term assets and is crucial for assessing liquidity and operational efficiency.

Historical Current Ratio of Indra Sistemas (IDA.F)

In 2023, the current ratio for Indra Sistemas stands at 1.1326, showing a decline from 1.2481 in 2022. This downward trend, falling short of the industry median of 1.4169, suggests a shrinking buffer for meeting short-term liabilities. Hence, no point is assigned for this criterion.

Number of shares not diluted?

Assessing the change in outstanding shares is vital, as it can impact per-share profitability and investor's ownership percentage.

Historical outstanding shares of Indra Sistemas (IDA.F)

Upon comparing the outstanding shares in 2022 (176,321,721) with 2023 (0), there is a noticeable increase suggesting inaccuracy. Historically, the shares have fluctuated but hovered near 176 million shares, dipping close to zero periodically which could relate to buybacks, reverse splits, or data errors.

Operating of Indra Sistemas (IDA.F)

Cross Margin is growing?

Change in Gross Margin indicates the difference in the proportion of revenue that turns into profit before deducting operating expenses. It's crucial to monitor as it affects profitability and pricing strategies.

Historical gross margin of Indra Sistemas (IDA.F)

Comparing the Gross Margin of Indra Sistemas from 2022 to 2023, we see an increase from 0.3346 in 2022 to 0.3382 in 2023. This slight increase, though marginal, indicates a positive trend, suggesting the company is slightly improving in converting revenue into gross profit before operating expenses. The positive increment earns the company 1 point for this criterion. Additionally, when we consider the industry median, which moved from 0.3226 in 2022 to 0.3391 in 2023, Indra Sistema's Gross Margin is aligning closer to the industry median. While the increase is minimal, it shows the company's ability to maintain and slightly improve its efficiency in profit generation compared to its past performance and relative to the industry.

Asset Turnover Ratio is growing?

Asset Turnover measures a company's efficiency in using its assets to generate sales.

Historical asset turnover ratio of Indra Sistemas (IDA.F)

The Asset Turnover ratio for Indra Sistemas improved from 0.8492 in 2022 to 0.9382 in 2023. This increase indicates that the company has become more efficient in utilizing its assets to generate revenue, marking a positive trend. Historical values show a gradual improvement, with key milestones such as 0.8814 in 2015 and significant progress to 0.9382 in 2023, underscoring the company's continuous enhancement in operational efficiency. Hence, Indra Sistemas gains a 1 point on this criterion.


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