IONS 48 (+1.46%)
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Last update on 2024-06-07

Ionis Pharmaceuticals (IONS) - Piotroski F-Score Analysis for Year 2023 (Final Score: 4/9)

Ionis Pharmaceuticals (IONS) Piotroski F-Score Analysis 2023: Scoring 4/9 for profitability and financial health insights. Learn more in our detailed analysis.

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 Ionis Pharmaceuticals (IONS) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

Criteria
Company has a positive net income?
0
Company has a positive cash flow?
0
Return on Assets (ROA) are growing?
0
Operating Cashflow are higher than Netincome?
1
Leverage is declining?
1
Current Ratio is growing?
0
Number of shares not diluted?
0
Cross Margin is growing?
1
Asset Turnover Ratio is growing?
1

We assessed Ionis Pharmaceuticals (IONS) against the 9 criteria of the Piotroski F-Score to evaluate their profitability, liquidity, and operational efficiency. The overall score was 4 out of 9. Only criteria for Operating Cashflow being higher than Net Income, Gross Margin growth, and Asset Turnover Ratio showed positive score improvements. However, Net Income, Cash Flow from Operations, Return on Assets, Leverage, Current Ratio, and Number of Shares Outstanding did not meet the favorable outcomes, indicating inconsistency and potential financial instability with a growing debt dependency and negative cash flows.

Insights for Value Investors Seeking Stable Income

Based on the Piotroski F-Score analysis, Ionis Pharmaceuticals exhibits risk factors with low profitability and negative cash flows. Although some operational metrics show improvement, the overall inconsistencies and financial instability suggest caution. Investors should delve deeper into specific business strategies and long-term plans if considering Ionis Pharmaceuticals, but it might be better to explore other more stable and profitable companies for a safer investment.

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

Profitability of Ionis Pharmaceuticals (IONS)

Company has a positive net income?

Net income is the profit a company makes after deducting all costs and expenses. A positive net income indicates profitability, a critical measure for investors assessing a company's ability to generate earnings.

Historical Net Income of Ionis Pharmaceuticals (IONS)

The net income for Ionis Pharmaceuticals (IONS) in 2023 is -366,286,000, placing it in the negative category. This means we must assign 0 points according to the Piotroski F-Score criteria. Over the last two decades, Ionis Pharmaceuticals has exhibited a highly volatile net income trend. For example, the years 2018 and 2019 showed positive net incomes of 273,741,000 and 294,000,000, respectively. However, substantial negative figures in the subsequent years, such as -444,263,000 in 2020 and -269,722,000 in 2022, indicate inconsistency in achieving sustained profitability. This inconsistency flags potential risks for investors.

Company has a positive cash flow?

Cash Flow from Operations (CFO) assesses the amount of cash generated by a company's regular operational activities. Positive CFO is crucial for paying expenses, repaying loans, and funding future growth.

Historical Operating Cash Flow of Ionis Pharmaceuticals (IONS)

For 2023, Ionis Pharmaceuticals (IONS) reported a CFO of -307.5 million USD, which is negative. Historically, Ionis has shown volatile cash flow from operations over the last 20 years. While there have been instances of positive CFO, such as in 2018 with 602.8 million USD and in 2015 with 174.1 million USD, the negative CFO in recent years, including -274.4 million USD in 2022 and -307.5 million USD in 2023, indicates persistent operational cash flow challenges. This negative trend scores 0 in Piotroski's criteria and suggests that Ionis is struggling to generate enough cash through its core business operations, potentially impacting its financial stability.

Return on Assets (ROA) are growing?

Return on Assets (ROA) indicates how efficiently a company is using its assets to generate profit. A positive change in ROA is seen as a sign of improving efficiency.

Historical change in Return on Assets (ROA) of Ionis Pharmaceuticals (IONS)

In 2023, Ionis Pharmaceuticals (IONS) reported an ROA of -0.1326 compared to -0.1048 in 2022. This represents a decrease in ROA, moving further into negative territory. This trend is not favorable as it signals decreasing efficiency in using assets to generate profits. Additionally, the company's ROA is significantly below the industry median ROA of 0.4518 in 2023, highlighting a substantial underperformance relative to its peers over the years. Therefore, Ionis Pharmaceuticals doesn't earn this point in the Piotroski analysis since the ROA has worsened.

Operating Cashflow are higher than Netincome?

The criterion examines whether Operating Cash Flow is higher than Net Income. It assesses the quality and sustainability of earnings.

Historical accruals of Ionis Pharmaceuticals (IONS)

For Ionis Pharmaceuticals (IONS), the operating cash flow in 2023 was -$307.5 million, which is higher than the net income of -$366.3 million. This discrepancy indicates that while the company is not generating positive net income, its cash flow situation is somewhat better, albeit still negative. The company's performance in this criterion would score 1 point, signaling a relatively better cash flow position when compared to net earnings. Over the last 20 years, Ionis Pharmaceuticals has exhibited fluctuating performance in operating cash flow, peaking in 2018 at approximately $602 million and experiencing significant downturns, particularly from 2020 onwards. This trend raises concerns about the long-term sustainability of its cash-generating capabilities in light of recent negative figures. Accrual data corroborates this unstable trend, as actual cash inflows and outflows don't always align smoothly with net income figures. Regular significant discrepancies, like those seen recently, could imply issues with earnings quality or accounting irregularities. An experienced investor should delve deeper into underlying business processes and management strategies to grasp the context of these figures fully.

Liquidity of Ionis Pharmaceuticals (IONS)

Leverage is declining?

The change in leverage criterion measures the variation in the company's financial leverage year over year.

Historical leverage of Ionis Pharmaceuticals (IONS)

Comparing 2022 and 2023, Ionis Pharmaceuticals (IONS) saw an increase in leverage from 0.5374 to 0.4683. This increase signifies a higher reliance on debt to finance its assets, potentially increasing financial risk. Over the last 20 years, Ionis's leverage shows significant fluctuations, peaking in 2004 at 1.1352 and reaching its lowest in 2019 at 0.2196. Vigilance is required as sustained higher leverage could impact its creditworthiness and cost of borrowing.

Current Ratio is growing?

Current Ratio measures a company's ability to pay short-term obligations with its short-term assets. It is calculated by dividing current assets by current liabilities. A higher ratio indicates better short-term financial health and lower liquidity risk. For companies like Ionis Pharmaceuticals, which operate in the biotechnology sector, maintaining a strong Current Ratio is crucial due to the capital-intensive nature of the industry.

Historical Current Ratio of Ionis Pharmaceuticals (IONS)

In 2023, Ionis Pharmaceuticals (IONS) reported a Current Ratio of 5.8958, compared to 7.0699 in 2022. This represents a decrease, which indicates a slight decline in the company's short-term liquidity position. Historically, Ionis Pharmaceuticals has managed varying Current Ratios, but it's essential to note that 2023's ratio is relatively closer to the industry's historical median than previous years. For example, while the biotechnology industry's median Current Ratio was 5.7831 in 2023, Ionis Pharmaceuticals' 5.8958 is slightly above this benchmark but still reflects a reduction from the previous year. This decrease might raise concerns regarding the company's ability to meet its short-term obligations as efficiently as in the prior year. Hence, the score for Current Ratio is set to 0 because the ratio decreased from 2022 to 2023.

Number of shares not diluted?

Shares Outstanding represent the total number of shares of a company that are currently owned by all its shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s officers and insiders.

Historical outstanding shares of Ionis Pharmaceuticals (IONS)

For Ionis Pharmaceuticals (IONS), the Outstanding Shares increased from 141,848,000 in 2022 to 143,190,000 in 2023. This denotes a rise rather than a fall. As per Piotroski Analysis, a decrease in the number of outstanding shares would warrant adding one point, thus we assign 0 points here. This trend can raise questions about potential shareholder dilution, which could be a sign of capital raising activities. Studying the past 20 years of data, we notice a general uptrend from 55,463,000 in 2003 to 143,190,000 in 2023, suggesting consistent growth in equity financing, possibly to fuel R&D and expansion.

Operating of Ionis Pharmaceuticals (IONS)

Cross Margin is growing?

The Change in Gross Margin criterion within the Piotroski F-Score assesses whether a company's gross margin has improved year-over-year. An increasing gross margin typically indicates better profitability and cost management, crucial for value investors when identifying financially healthy firms.

Historical gross margin of Ionis Pharmaceuticals (IONS)

Comparing the Gross Margin of Ionis Pharmaceuticals (IONS), we observe an increase from 0.976 in 2022 to 0.9884 in 2023. This upward trend is favorable and warrants adding 1 point for this criterion. Over the past 20 years, IONS's gross margin showcases an overall positive trend, outperforming the industry median of 0.4518 for 2023. This historical performance underscores their competitive edge in cost efficiency and profitability.

Asset Turnover Ratio is growing?

Asset Turnover evaluates a company's efficiency in generating sales from its assets. A higher ratio indicates better utilization.

Historical asset turnover ratio of Ionis Pharmaceuticals (IONS)

Ionis Pharmaceuticals saw an Asset Turnover increase from 0.2283 in 2022 to 0.2852 in 2023. This improvement, reflecting a 25% increase year-on-year, suggests improved efficiency in using its assets to generate sales. Over the past 20 years, the Asset Turnover reached its peak at 0.4544 (2017). Thus, the upward trend in 2023 is a positive sign, adding 1 point to Piotroski's F-Score.


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