INTU 641.95 (+1.99%)
US4612021034SoftwareSoftware - Application

Last update on 2024-06-07

Intuit (INTU) - Piotroski F-Score Analysis for Year 2023 (Final Score: 5/9)

Analyze Intuit's (INTU) 2023 Piotroski F-Score of 5/9 for financial health and valuation 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.
Learn more...

Short Analysis - Piotroski Score: 5

We're running Intuit (INTU) 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?
0
Cross Margin is growing?
0
Asset Turnover Ratio is growing?
0

Intuit (INTU) received a Piotroski F-Score of 5 out of 9, reflecting its moderate financial strength. The analysis evaluates profitability, liquidity, and operating efficiency. Intuit shows positive net income and cash flow, with current liquidity improving. However, concerns include declining ROA and increasing shares, mixed leverage trends, and decreasing asset turnover. Gross margin insights were unprovided.

Insights for Value Investors Seeking Stable Income

With a moderate Piotroski F-score, Intuit demonstrates financial strengths worth examining but also flags specific concerns needing further scrutiny. Investors might consider Intuit a viable option with strong operational cash flow but should monitor operational efficiencies and debt-equity management closely.

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

Profitability of Intuit (INTU)

Company has a positive net income?

The criterion assesses if a company's net income is positive. A positive net income adds 1 point in Piotroski analyses.

Historical Net Income of Intuit (INTU)

For Intuit (INTU), the net income for 2023 stands at $2,384,000,000. This is a positive net income. Historically, Intuit's net income has shown a pattern of consistent growth over the past two decades. From a mere $343 million in 2003, the company has been able to scale up to its current figure, reflecting strong profitability and financial health. This consistent increase is a good indication of the management’s effectiveness in driving revenue, managing expenses, and reinvesting profits efficiently. Thus, Intuit receives 1 point for this criterion according to the Piotroski analysis.

Company has a positive cash flow?

Cash Flow from Operations (CFO) assesses the cash generated or used by a company's core business operations. Positive CFO indicates a firm's business is capable of generating cash.

Historical Operating Cash Flow of Intuit (INTU)

For the fiscal year 2023, Intuit (INTU) posted a CFO of $5,046,000,000, which is positive. Historically, Intuit has shown a consistent and upward trend in CFO, growing from $569,436,000 in 2003 to the current $5,046,000,000. This trend is highly favorable, reflecting strong operational cash flow generation capabilities over the past two decades. The increasing CFO is indicative of a robust core business that is reliably generating cash, which, in turn, enhances the company's ability to reinvest in growth, pay dividends, or reduce debt. Consequently, Intuit earns a full point for this criterion.

Return on Assets (ROA) are growing?

The change in Return on Assets (ROA) is a measure of how efficiently a company is increasing its profitability relative to its assets, reflecting management's effectiveness.

Historical change in Return on Assets (ROA) of Intuit (INTU)

For Intuit (INTU), the ROA decreased from 0.0955 in 2022 to 0.0859 in 2023, indicating a drop in efficiency in generating profit from its assets. In the context of the Piotroski F-Score, which assigns points based on improved financial performance, Intuit scores 0 points for the decline in ROA. Additional data over the last 20 years shows fluctuating ROA, reflecting varying performance levels, but the current trend is a decline. Such a downtrend may concern investors, signaling challenges in efficiency despite increasing operating cash flows from $569 million in 2003 to $5.05 billion in 2023.

Operating Cashflow are higher than Netincome?

Operating Cash Flow higher than Net Income

Historical accruals of Intuit (INTU)

Intuit's operating cash flow in 2023 amounted to an impressive $5.046 billion, significantly higher than its net income of $2.384 billion for the same year. This discrepancy indicates a robust ability to generate cash from its operating activities. Historically examining the company’s cash flow from operations over the last two decades, we see a consistent upward trajectory, culminating in a peak of $5.046 billion in 2023. In tandem, net income has steadily climbed but at a relatively slower pace, growing from $343 million in 2003 to $2.384 billion in 2023. This favorable trend showcases the efficiency and profitability of Intuit’s core operations. This condition is a strong positive indicator, reinforcing the financial soundness of the company. Therefore, Intuit earns 1 point for this criterion.

Liquidity of Intuit (INTU)

Leverage is declining?

Change in leverage refers to the company's ability to reduce debt relative to its equity, which indicates improving financial stability and reduced financial risk.

Historical leverage of Intuit (INTU)

Examining the leverage ratios for Intuit (INTU) from 2022 and 2023, we note an increase from 0.2508 in 2022 to 0.2376 in 2023. While this change denotes a slight reduction in the company's debt relative to its equity, the score for leverage in Piotroski's model would be 0 given that leverage hasn't decreased. Historically, Intuit has maintained a relatively stable leverage pattern with some fluctuations yearly. This rising debt level might suggest increasing financial commitments or strategic leverage expansion, signaling potential risk under unfavorable economic conditions.

Current Ratio is growing?

The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year. An increasing current ratio indicates improved liquidity.

Historical Current Ratio of Intuit (INTU)

In 2023, Intuit's current ratio stands at 1.4662, up from 1.3904 in 2022. This increase signals a better capability to cover short-term liabilities, a positive trend. Compared to the last 20 years of data, where the highest current ratio was 2.2613 (2020) and the lowest was 0.717 (2016), this improvement is modest but noteworthy. However, the ratio is still below the 2023 industry median of 1.7519, suggesting Intuit's liquidity is not yet at par with industry standards. Therefore, while adding one point is justified, the company still has room for improvement.

Number of shares not diluted?

Change in Shares Outstanding measures any changes in a company's issued shares and equity dilution.

Historical outstanding shares of Intuit (INTU)

Comparing 2022 and 2023, Intuit's Outstanding Shares increased from 280 million to 281 million, showing a year-over-year increase. Historically, over the last 20 years, there has been a general trend of decreasing Outstanding Shares from 421.91 million in 2003 to a low of 260 million around 2018-2019 before witnessing mild increases in recent years. While the incremental increase in the latest year may be a concern for some investors regarding dilution, the long-term historical trend supports a generally shareholder-friendly approach with significant share repurchase programs over a prolonged period. Given the rise in 2023, this criterion would be rated 0, indicating a less favorable outcome against dilution.

Operating of Intuit (INTU)

Cross Margin is growing?

Justify the importance of Gross Margin in the Piotroski Analysis for Intuit (INTU)

Historical gross margin of Intuit (INTU)

When evaluating a company's financial health using the Piotroski Analysis, the gross margin percentage is vital. Gross margin is the revenue percentage that exceeds the cost of goods sold. It indicates the company’s efficiency at producing and selling products or services. Higher gross margins suggest better management efficiency and pricing power. Adverse trends could raise red flags about competitive pressures or operational inefficiencies.

Asset Turnover Ratio is growing?

This criterion evaluates whether a company has improved its efficiency in using its assets to generate revenue.

Historical asset turnover ratio of Intuit (INTU)

Initial analysis of Intuit's asset turnover ratio reveals a decrease from 0.5885 in 2022 to 0.5176 in 2023. This indicates that the company's efficiency in using its assets to generate revenue has diminished over the year. Hence, Intuit scores a 0 for this criterion. Reviewing the asset turnover ratios over the past two decades also showcases a downward trend starting from 1.2901 in its peak in 2018 to the current figure of 0.5176 in 2023. This long-term decline could be a cause for concern for investors looking at the operational efficiency of Intuit.


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.