IEX 210.6 (+1.89%)
US45167R1041Industrial ProductsSpecialty Industrial Machinery

Last update on 2024-06-06

IDEX (IEX) - Piotroski F-Score Analysis for Year 2023 (Final Score: 6/9)

IDEX (IEX) scores 6/9 in the 2023 Piotroski F-Score analysis, showcasing its financial health through profitability, liquidity, and operational efficiency insights.

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 IDEX (IEX) 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?
1
Number of shares not diluted?
1
Cross Margin is growing?
0
Asset Turnover Ratio is growing?
0

The Piotroski F-Score is a tool used to measure the financial health of a company based on nine criteria. For IDEX (IEX) in 2023, the company has a Piotroski F-Score of 6 out of 9. The assessment shows that IDEX has a positive net income, cash flow from operations, and a solid current ratio. However, it has seen a decline in return on assets, gross margin, and asset turnover ratio. The number of shares has slightly increased, indicating potential dilution. Overall, while demonstrating financial strength in several areas, there are some points of concern in operational efficiencies and asset utilization.

Insights for Value Investors Seeking Stable Income

Based on the Piotroski F-Score of 6, IDEX (IEX) appears to be a relatively strong company with a positive financial health outlook. However, the areas of declining return on assets, gross margin, and asset turnover ratio suggest that potential investors should closely monitor these factors. Given the overall score and historical trends, IDEX may be a good investment, but it would be wise to further investigate the efficiency and asset utilization issues 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 IDEX (IEX)

Company has a positive net income?

The criterion considers whether the net income is positive, which is a basic indicator of profitability and financial health.

Historical Net Income of IDEX (IEX)

In 2023, IDEX (IEX) reported a net income of $596,100,000, which is a positive figure. This marks a consistent uptrend with the previous year's net income of $586,900,000. Over the last two decades, the company has shown a robust growth in net income, with a few dips and recoveries along the way, such as the decline in 2012 followed by significant growth in subsequent years. This positive trend underlines the company's consistent ability to generate profits, thus earning 1 point for the net income criterion.

Company has a positive cash flow?

Cash Flow from Operations (CFO) refers to the amount of cash generated by a company's regular business operations. It's important as it demonstrates the firm's ability to generate sufficient cash flow to maintain or grow operations without relying on external financing.

Historical Operating Cash Flow of IDEX (IEX)

In 2023, IDEX (IEX) presented a CFO of $716.7 million. This positive figure adds one point to its Piotroski score. Over the last 20 years, IDEX has consistently maintained increasing CFO, reflecting strong operational efficiency and robustness. Starting from $111.7 million in 2003 and evolving to $716.7 million in 2023, this growth trend is a positive indicator of the company's underlying financial health and stability.

Return on Assets (ROA) are growing?

Change in ROA criterion examines whether the return on assets has increased compared to the previous year. It assesses a company's profitability relative to its total assets.

Historical change in Return on Assets (ROA) of IDEX (IEX)

The ROA for IEX in 2023 is 0.1048, down from 0.1126 in 2022. Therefore, there is a decline in ROA, resulting in a 0-point score for this criterion. This downward trend can be concerning, especially when considering the industry median ROA of approximately 0.3492 in 2023. Over the last 20 years, IEX has typically posted lower ROA than the industry median, with values ranging from 0.1126 in recent years to a high of 0.3487 in 2009. This relative underperformance may suggest inefficiencies in asset utilization or challenges in generating profits from their assets.

Operating Cashflow are higher than Netincome?

Operating Cash Flow higher than Net Income: This criteria assesses if the company is generating sufficient operating cash flow compared to its net income, an indicator of earnings quality and sustainability.

Historical accruals of IDEX (IEX)

For IDEX (IEX) in 2023, the Operating Cash Flow is $716,700,000, while Net Income is $596,100,000. Operating Cash Flow exceeds Net Income, adding 1 point. This positive trend suggests that IDEX can convert its net income into actual cash. Analysis of the past 20 years shows fluctuating but generally upward trends in both metrics. Notably, Accruals are relatively low, indicating high earnings quality and less manipulation through non-cash items. Overall, the positive disparity in 2023 underscores robust financial health and operational efficiency for IDEX, as sustainable cash flows underpin long-term viability.

Liquidity of IDEX (IEX)

Leverage is declining?

Change in Leverage refers to the annual variation in a company's financial leverage, an important measure of a company's ability to meet its long-term debt obligations.

Historical leverage of IDEX (IEX)

Analyzing IDEX (IEX), the company's leverage has changed from 0.284 in 2022 to 0.2427 in 2023. This indicates a decrease, suggesting improved financial health and lower risk associated with debts. Reviewing 20-year historical data: the trend fluctuates, peaking in 2022, before declining to 0.2427, a change that supports a positive outlook financially.

Current Ratio is growing?

The current ratio measures a company's ability to pay off its short-term liabilities with its short-term assets, a critical indicator of liquidity.

Historical Current Ratio of IDEX (IEX)

The Current Ratio for IDEX (IEX) increased from 2.5741 in 2022 to 2.8909 in 2023, demonstrating an improvement in the company's liquidity position. This suggests that IDEX has enhanced its ability to cover short-term obligations with its current assets, possibly indicating sound management of working capital. The growth from 2.5741 to 2.8909 equates to an increase of approximately 12.30%. Furthermore, this new ratio remains significantly above the 2023 industry median of 1.7757, highlighting IDEX's superior liquidity in its sector. This robust positioning not only earns the company 1 point in the Piotroski analysis but may also underline strategic financial management that can be advantageous under uncertain market conditions.

Number of shares not diluted?

The criterion examines changes in shares outstanding. It is essential as a decrease suggests share buybacks, enhancing shareholder value, while an increase could indicate dilution.

Historical outstanding shares of IDEX (IEX)

In the years 2022 and 2023, IDEX (IEX) saw a slight increase in outstanding shares from 75,700,000 to 75,800,000. Over the past 20 years, the trend in shares outstanding has fluctuated, peaking at 83,641,000 in 2012 but generally showing periods of buybacks and moderations, such as the fall to approximately 75,700,000 by 2022. For the Piotroski criteria, the increase in shares outstanding in 2023 results in a score of zero for this criterion. While minor, this particular uptick often might hint at potential dilution, possibly through equity compensation plans or capital raising efforts.

Operating of IDEX (IEX)

Cross Margin is growing?

Change in gross margin measures a company's efficiency in generating revenue compared to its costs. An increasing gross margin indicates improving profitability.

Historical gross margin of IDEX (IEX)

For IDEX (IEX), the Gross Margin has decreased slightly from 0.4484 in 2022 to 0.4419 in 2023. This decrease suggests a slight decline in the company's efficiency in converting revenue into profit over the past year. While this may seem minimal, it's essential to consider broader trends and industry benchmarks. Historically, IDEX's gross margin has outperformed the industry median, which was 0.3383 in 2022 and is 0.3492 in 2023. Despite the recent dip, IDEX remains significantly more efficient than its peers. Nevertheless, for the Piotroski criteria, since the Gross Margin did not increase, the score is 0 points.

Asset Turnover Ratio is growing?

Asset Turnover Ratio examines the efficiency of a company's use of its assets in generating sales revenue.

Historical asset turnover ratio of IDEX (IEX)

In 2023, IDEX (IEX) reported an Asset Turnover Ratio of 0.5755, a decrease from 0.6102 in 2022. This downward trend is indicative of a decline in how efficiently the company is utilizing its assets to generate revenue. Effective asset management is crucial for maintaining profitability and competitiveness. The 20-year historical data reveals fluctuating asset efficiency with peaks in the mid-2000s and recent lows around the COVID-19 period. Thus, given the decrease in 2023, the Asset Turnover criterion scores 0 points.


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