IDXX 492.74 (+1.02%)
US45168D1046Medical Diagnostics & ResearchDiagnostics & Research

Last update on 2024-06-05

IDEXX Laboratories (IDXX) - Piotroski F-Score Analysis for Year 2023 (Final Score: 8/9)

In-depth Piotroski F-Score analysis of IDEXX Laboratories (IDXX) for 2023. Evaluates profitability, liquidity, and leverage with a final score of 8/9.

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.
Learn more...

Short Analysis - Piotroski Score: 8

We're running IDEXX Laboratories (IDXX) 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?
1
Number of shares not diluted?
1
Cross Margin is growing?
1
Asset Turnover Ratio is growing?
0

IDEXX Laboratories (IDXX) scored 8 out of 9 on the Piotroski F-Score, which suggests the company is in a strong financial position. They have a consistent history of positive net income and significant cash flow from operations. Their Return on Assets (ROA) has seen positive growth, though it still lags behind industry standards. The leverage ratio and current ratio both showed improvement, indicating a solid financial standing with decreasing dependencies on debt. Gross margins increased, showing better cost management. However, the asset turnover ratio saw a decline, suggesting some inefficiency in asset utilization. Overall, 8 out of the 9 criteria were met, demonstrating strong profitability, liquidity, and operating efficiency.

Insights for Value Investors Seeking Stable Income

Based on the high Piotroski F-Score, IDEXX Laboratories (IDXX) appears to be a financially strong company with good growth and solid management decisions. The consistent net income, robust cash flows, improving leverage, and growing gross margins make it a potentially attractive investment. However, the slight drop in asset turnover ratio is something to be aware of. Overall, IDEXX is worth considering for your investment portfolio, but keep an eye on how the company manages and utilizes its assets moving forward.

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

Profitability of IDEXX Laboratories (IDXX)

Company has a positive net income?

Net income is a key profitability metric that shows how much a company earns after all expenses, taxes, and costs. Positive net income indicates profitability and operational efficiency.

Historical Net Income of IDEXX Laboratories (IDXX)

IDEXX Laboratories (IDXX) posted a net income of $845,042,000 in 2023, which is positive. Over the last two decades, IDEXX has consistently managed to increase its net income year-over-year, except for a slight dip in 2014. Starting from a modest $57.09 million in 2003, the net income has shown an impressive upward trend peaking in 2023. This continued success highlights strong operational performance and growth strategies. Hence, one point is added for the positive net income in the Piotroski score.

Company has a positive cash flow?

Cash Flow from Operations (CFO) is a critical measure of a company's financial health as it shows the cash generated from normal business operations.

Historical Operating Cash Flow of IDEXX Laboratories (IDXX)

For IDEXX Laboratories (IDXX), the CFO for 2023 is noted to be $906.51 million, which is positive. This is a substantial increase compared to the previous year (2022), which registered a CFO of $542.98 million. Over the past two decades, IDEXX Laboratories has consistently generated positive CFO, indicating strong operational performance. This positive trend supports the financial stability of the company and adds 1 point in the Piotroski score, reinforcing the firm's ability to generate cash from its core business operations.

Return on Assets (ROA) are growing?

Return on Assets (ROA) highlights how efficiently a company manages its assets to generate earnings. A rising ROA signals improved asset efficiency.

Historical change in Return on Assets (ROA) of IDEXX Laboratories (IDXX)

In 2023, IDEXX Laboratories (IDXX) saw its ROA increase to 0.2814 from 0.262 in 2022. This 7.4% rise is a positive indicator, adding 1 point based on the Piotroski score criterion. However, despite the improvement, IDXX's ROA remains significantly below the industry median of 0.504 for 2023. While the company's asset efficiency is growing, there's still substantial ground to cover to match industry standards. Historical data shows that the ROA for IDXX has fluctuated, but the recent trend suggests a strategic focus on utilizing assets more efficiently. Given the positive change in ROA, it reflects well on management's ability to generate better returns on their asset base.

Operating Cashflow are higher than Netincome?

This criterion compares a company's operating cash flow with its net income. Operating cash flow is derived from the company's core business activities, while net income includes all revenue minus costs, taxes, and other expenses. It is important because it demonstrates the company's ability to generate enough cash from operations to sustain and grow the business, which is a sign of healthy financial management.

Historical accruals of IDEXX Laboratories (IDXX)

In 2023, IDEXX Laboratories (IDXX) has an operating cash flow of $906.51 million, which is higher than its net income of $845.04 million. This positive trend indicates that the company is generating more cash from its core operations than the net income reported. This is a good sign as it suggests that net income may not be inflated by non-cash items, and the cash inflow is sufficient to cover day-to-day operational costs. Over the last 20 years, IDEXX Laboratories' operating cash flow has consistently grown, hitting a new peak in 2023. This growth, paired with an increased net income, reflects a robust operating efficiency and strong financial health. Adding 1 point for this criterion.

Liquidity of IDEXX Laboratories (IDXX)

Leverage is declining?

Change in leverage assesses whether a company's level of debt relative to its equity has increased or decreased over time. A decrease in leverage suggests a stronger, less risky financial position, whereas an increase may indicate higher financial risk.

Historical leverage of IDEXX Laboratories (IDXX)

Between 2022 and 2023, IDEXX's leverage decreased from 0.2897 to 0.2216. This suggests an improvement in the company's financial risk profile as it is now less reliant on debt financing. Over the past 20 years, IDEXX has seen a significant evolution in its leverage profile, increasing slowly from 0 in 2003 to a peak of 0.4077 in 2020, followed by improvement in recent years. Thus, the current trend is positive and indicates prudent financial management.

Current Ratio is growing?

Comparison of current ratios over consecutive years allows for the assessment of a company's short-term financial health. The current ratio is calculated by dividing current assets by current liabilities, thus measuring a firm's ability to pay off its short-term obligations with short-term assets. An increasing current ratio suggests improvement in liquidity, whereas a decreasing one might signal potential short-term financial strain. It is crucial for ensuring operational stability and maintaining investor confidence, especially within the context of industry standards.

Historical Current Ratio of IDEXX Laboratories (IDXX)

The current ratio for IDEXX Laboratories exhibited a commendable increase from 0.8913 in 2022 to 1.5714 in 2023. This progression indicates an enhancement in short-term liquidity, marking a positive trend. By adding 1 point to the analysis, it signifies that IDEXX is better positioned to cover its short-term liabilities with its short-term assets. A sharp comparison against the industry median, which stood at 2.3682 in 2023, reveals that IDEXX is still lagging behind the average liquidity level of its peers. However, this upward movement is crucial as it demonstrates a strengthened financial footing. Over the last two decades, IDEXX's current ratio peaked in 2003 at 3.6788 and hit its lowest in 2018 at 0.8491. The increasing trend in 2023 displays resilience and a strategic liquidity management focus amid fluctuating short-term obligations and assets.

Number of shares not diluted?

Shares Outstanding reflects the total shares of a company's stock currently held by all its shareholders. A decrease typically signals share buybacks.

Historical outstanding shares of IDEXX Laboratories (IDXX)

Between 2022 and 2023, IDEXX Laboratories did see a decrease in Outstanding Shares from 83,623,000 to 83,066,000. This decrease is quite subtle, amounting to a difference of 557,000 shares or around 0.67%. Analyzing the broader trend over the past 20 years, IDXX has consistently reduced its outstanding shares from a peak of 143,724,000 in 2003 to the present figures in 2023. This steady reduction could suggest robust share repurchase programs, designed to return capital to shareholders, a practice generally perceived positively in financial markets. Monitoring such trends can be insightful for long-term investors as consistent buyback programs can hint towards a company's strong free cash flow generation.

Operating of IDEXX Laboratories (IDXX)

Cross Margin is growing?

The criterion evaluates the company's ability to manage production costs compared to its revenue. An increase indicates improved operational efficiency.

Historical gross margin of IDEXX Laboratories (IDXX)

IDEXX Laboratories' gross margin increased from 0.5952 in 2022 to 0.5982 in 2023. This positive trend is crucial as it demonstrates enhanced profitability and cost management. Historically, IDEXX's gross margin has consistently risen, as depicted in the dataset spanning 2003-2023. The 2023 gross margin is also significantly higher than the industry median of 0.504, suggesting IDEXX's superior cost efficiency relative to its peers. This increase points to an effective strategy in managing production costs, thus earning a score of 1 point for this criterion.

Asset Turnover Ratio is growing?

Asset turnover measures how efficiently a company uses its assets to generate sales. Higher ratios imply better efficiency and asset utilization.

Historical asset turnover ratio of IDEXX Laboratories (IDXX)

In 2023, IDEXX Laboratories reported an asset turnover of 1.219 compared to 1.2991 in 2022. This indicates a decrease in the company's asset efficiency. A lower asset turnover suggests less efficiency in using their assets to generate revenue. Over the last 20 years, IDEXX's asset turnover has had fluctuations, peaking at 1.4624 in 2007. This recent decrease to 1.219 moves the metric further away from its highs, reflecting a period of slightly diminished operational efficiency. Hence, for this criterion, IDEXX Laboratories earns 0 points.


Obligatory risk notice

We would like to point out that the contents of this website are for general information purposes only and do not constitute recommendations for the purchase or sale of specific financial instruments, and therefore do not constitute investment advice. In particular, marketstorylabs.com and its creators cannot assess the extent to which information / recommendations made on the pages correspond to your investment objectives, your risk tolerance and your ability to bear losses. Therefore, if you make any investment decisions based on information on the site, you do so solely on your own responsibility and at your own risk. This in turn means that neither marketstorylabs.com nor its creators are liable for any losses incurred as a result of investment decisions based on the information on the marketstorylabs.com website or other media used.