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Last update on 2024-06-05

Juniper Networks (JNPR) - Piotroski F-Score Analysis for Year 2023 (Final Score: 8/9)

Analyze Juniper Networks (JNPR) Piotroski F-Score for 2023. Key financial metrics and their impacts revealed, final score: 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.
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Short Analysis - Piotroski Score: 8

We're running Juniper Networks (JNPR) 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?
1
Asset Turnover Ratio is growing?
1

Juniper Networks (JNPR) scored an 8 on the Piotroski F-Score, indicating financial strength. The analysis shows positive net income, positive cash flow from operations, good earnings quality (cash flow higher than net income), growing current ratio, reduction in outstanding shares, increased gross margin, and higher asset turnover ratio. However, some concerns include a decrease in return on assets and slight increase in leverage. Historically, Juniper Networks has shown resilience and maintained profitability and liquidity even with some fluctuations.

Insights for Value Investors Seeking Stable Income

Based on the Piotroski F-Score of 8, Juniper Networks (JNPR) appears to be a strong investment opportunity with a solid financial position. The company demonstrates good profitability, efficient cash flow management, and improving liquidity. However, potential investors should keep an eye on the company's leverage and return on assets for any further declines. Overall, Juniper Networks is worth considering for investment due to its strong financial health indicated by the Piotroski Score.

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

Profitability of Juniper Networks (JNPR)

Company has a positive net income?

Net income is the total profit of a company after all expenses and taxes have been deducted from total revenue.

Historical Net Income of Juniper Networks (JNPR)

The net income for Juniper Networks (JNPR) in 2023 is $310,200,000, which is significantly positive. A positive net income is a crucial indicator of financial health and operational efficiency. Historically, as seen from the provided data over the past 20 years, Juniper Networks has experienced fluctuations in net income. For instance, in 2006, the company reported a significant net loss of $1,001,437,000, yet rebounded in subsequent years, demonstrating resilience. The consistent ability to generate positive net income in recent years further solidifies that the company is maintaining profitability. Therefore, the net income criterion not only adds 1 point to the Piotroski score but also underscores Juniper Networks' sound financial position for 2023.

Company has a positive cash flow?

Cash Flow from Operations (CFO) indicates a company's ability to generate sufficient positive cash flow to maintain and grow its operations. Consistent positive CFO is a strong indicator of a company’s financial health.

Historical Operating Cash Flow of Juniper Networks (JNPR)

In 2023, Juniper Networks (JNPR) reported a positive Cash Flow from Operations of $872.8 million. This positive cash flow adds 1 point to the Piotroski Score, revealing a healthy operational performance. Looking at the historical data, the company’s CFO has largely been positive over the past 20 years, underscoring its consistent capacity to generate cash from its core operating activities. This suggests that Juniper Networks has been effective in managing its operations to produce sufficient cash flow, which is a very good trend in terms of financial health.

Return on Assets (ROA) are growing?

The Change in Return on Assets (ROA) criterion assesses the year-over-year improvement in a company’s efficiency in generating profit from its assets, which is pivotal for gauging improvement in operational profitability.

Historical change in Return on Assets (ROA) of Juniper Networks (JNPR)

Juniper Networks (JNPR) posted an ROA of 0.0329 in 2023, a drop from 0.0517 in 2022. This represents a decline, earning the firm 0 points for this criterion. Despite this recent decrease, over the past 20 years, the company’s ROA has generally remained below the industry median, which fluctuated between 0.3492 and 0.4441. This consistent underperformance relative to peers could suggest systemic inefficiencies or structural challenges in Juniper Networks’ operations.

Operating Cashflow are higher than Netincome?

Comparing operating cash flow with net income helps in assessing the quality of earnings. Operating cash flow accounts for the cash generated from normal business operations, while net income includes non-cash items like depreciation and amortization, making it a better indicator of profitability.

Historical accruals of Juniper Networks (JNPR)

For Juniper Networks (JNPR) in 2023, the operating cash flow is $872.8 million, while the net income is $310.2 million. This demonstrates that the company is generating more cash from its operations than its reported net income, which is a good sign of earnings quality. Over the last 20 years, the operating cash flow has shown a general upward trend, peaking at $1.26 billion in 2017. This suggests a solid cash-generating business model. Therefore, an additional point is earned.

Liquidity of Juniper Networks (JNPR)

Leverage is declining?

Change in leverage indicates whether a company is increasing or decreasing its reliance on debt to finance its operations.

Historical leverage of Juniper Networks (JNPR)

In the case of Juniper Networks, the leverage increased slightly from 0.1843 in 2022 to 0.1786 in 2023. Hence, no point is added in this criterion. The leverage trend over the last 20 years shows significant fluctuation, starting at 0.2314 in 2003, reaching 0 in some years, and fluctuating within the range of 0.05 to 0.22 for the subsequent years. This slight increase in 2023 should be viewed with caution as consistent increases in leverage can amplify financial risk, especially in a volatile market.

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 ratio above 1 signifies better liquidity.

Historical Current Ratio of Juniper Networks (JNPR)

Juniper Networks' Current Ratio increased from 1.7399 in 2022 to 1.8039 in 2023. This improvement in liquidity garners a positive assessment and spots an upward tendency. Consequently, this criterion would assign 1 point. Over the last 20 years, Juniper Networks' Current Ratio indicates intermittent periods of fluctuation with notable peaks (such as 3.3068 in 2006) and troughs (such as 1.5137 in 2020). In contrast, the Industry Median's Current Ratio shows lesser volatility but followed a gradually decreasing trend. Comparing 2023 with the industry median value of 1.8276, Juniper Networks' Current Ratio remains closely aligned. The slight historical volatilities highlight certain strategic operational adjustments Juniper Networks might have undertaken, impacting liquidity favorably.

Number of shares not diluted?

Change in Shares Outstanding evaluates if a company is diluting or consolidating its shares, impacting earnings per share (EPS).

Historical outstanding shares of Juniper Networks (JNPR)

In 2023, Juniper Networks reported 320 million outstanding shares, down from 322.1 million in 2022. This decrease in shares outstanding is a positive signal according to the Piotroski criteria, earning a full point. Reducing shares can increase EPS and indicate strong share buyback programs. Over the last 20 years, Juniper Networks has significantly reduced its outstanding shares from a high of approximately 598.9 million in 2005 to the present 320 million, further demonstrating good capital management.

Operating of Juniper Networks (JNPR)

Cross Margin is growing?

Change in Gross Margin measures the change in company's profitability ability. Higher gross margins indicate better profitability.

Historical gross margin of Juniper Networks (JNPR)

For Juniper Networks, the gross margin in 2023 was 0.5754 compared to 0.558 in 2022. This signifies an increase, as explicitly indicated from 2022 to 2023. Consequently, we assign 1 point for this criterion, indicating a positive trend. Comparing the 0.5754 margin against the industry median of 0.3903, Juniper Networks not only improved its internal metric but also significantly outperformed the industry average, showcasing robust operational efficiency and cost management.

Asset Turnover Ratio is growing?

Asset Turnover evaluates a company's efficiency in using its assets to generate sales, indicating how well management employs its asset base.

Historical asset turnover ratio of Juniper Networks (JNPR)

For Juniper Networks, the Asset Turnover increased from 0.5821 in 2022 to 0.5905 in 2023. This represents an upward trend, indicative of improved efficiency in using its assets to generate revenue. This slight uptick, although marginal, is a positive signal in the context of the last 20 years' data. Historically, an Asset Turnover ratio fluctuating between 0.2791 and 0.5905 suggests variability, but with 2023 showing a peak, management appears better at utilizing assets recently. Hence, for the Piotroski F-Score calculations, one point is awarded here.


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