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Last update on 2024-06-05

Las Vegas Sands (LVS) - Piotroski F-Score Analysis for Year 2023 (Final Score: 7/9)

Las Vegas Sands (LVS) receives a Piotroski F-Score of 7/9 for outstanding profitability, liquidity, and efficiency in 2023, highlighting its financial strength.

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: 7

We're running Las Vegas Sands (LVS) 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?
0
Number of shares not diluted?
1
Cross Margin is growing?
1
Asset Turnover Ratio is growing?
1

The Piotroski F-Score is a tool that helps investors assess the strength of a company’s financial health on a scale of 0 to 9, based on profitability, liquidity, and operating efficiency. Las Vegas Sands (LVS) has a Piotroski Score of 7 out of 9 for 2023, indicating a strong and generally healthy financial position. Key points in favor of LVS include a positive net income of $1.22 billion, strong operating cash flow of $3.23 billion, and favorable metrics like lower leverage and higher gross margin. However, areas of concern include a decline in the Return on Assets (ROA) and a dip in the current ratio, which indicates reduced liquidity.

Insights for Value Investors Seeking Stable Income

Based on the Piotroski F-Score analysis, Las Vegas Sands (LVS) appears to be a strong candidate for investment due to its high score of 7 out of 9. The company's positive financial trends, particularly in profitability and operating efficiency, make it a potentially good investment. However, investors should be cautious and consider the areas of concern, such as fluctuating ROA and current ratio, before making decisions. Overall, LVS seems to be a solid investment worth further consideration.

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

Profitability of Las Vegas Sands (LVS)

Company has a positive net income?

This criterion focuses on examining whether the company has a positive net income or not. Having a positive net income indicates profitability and the company's ability to generate more revenue than its expenses, taxes, and other costs.

Historical Net Income of Las Vegas Sands (LVS)

Las Vegas Sands (LVS) has a positive net income of $1,221,000,000 in 2023, reflecting a healthy financial standing. Over the last 20 years, the company's net income has shown periods of significant growth and some downturns, including negative net incomes in 2008, 2009, 2020, and 2021. Despite these fluctuations, the rebound to a positive figure in 2023 underscores the company's resilience and effective management. This positive net income adds 1 point to the Piotroski Score, indicating a favorable trend for Las Vegas Sands.

Company has a positive cash flow?

The operating cash flow (CFO) criterion assesses a company's ability to generate sufficient cash from its core business operations.

Historical Operating Cash Flow of Las Vegas Sands (LVS)

For Las Vegas Sands (LVS), the operating cash flow (CFO) for 2023 stands at $3,227,000,000, which is positive. This is indeed significant as it earns the company 1 point in the Piotroski score. Evaluating this in the context of LV's historical data, the company has generally maintained positive operating cash flow over the past two decades, barring a few exceptions such as 2006, 2020, and 2022. These pollutant figures provide critical insight into LVS's ability to generate cash from its smisher activities, which underscores a positive trend in 2023, especially with a substantial shift from previous year's negative figures. This trend is good as the positive cash flow is crucial for maintaining operational liquidity, paying down debts, and funding expansion projects.

Return on Assets (ROA) are growing?

Change in ROA measures the company’s improvement in profitability. A higher ROA in the current period compared to the previous period indicates better utilization of assets to generate profits.

Historical change in Return on Assets (ROA) of Las Vegas Sands (LVS)

In 2023, Las Vegas Sands reported an ROA of 0.0557, a decrease from the 0.087 ROA reported in 2022. This indicates a decline in profitability and asset utilization, scoring 0. Historically, LVS's ROA has been volatile, unlike the steady performance of the industry median ROA, which remained between 0.3909 and 0.4982 over 20 years. This fluctuating trend suggests inconsistencies in LVS's profitability and asset utilization.

Operating Cashflow are higher than Netincome?

Explain the criterion for Las Vegas Sands (LVS) and why it is important to consider

Historical accruals of Las Vegas Sands (LVS)

In Piotroski analysis, assessing whether Operating Cash Flow (OCF) exceeds Net Income is vital. OCF higher than Net Income suggests the company generates more cash through its operations than it records in profits, indicating high-quality earnings. The Operating Cash Flow for Las Vegas Sands in 2023 is $3,227,000,000, significantly higher than the Net Income of $1,221,000,000 for the same year. This results in a favorable score of 1 point. Analyzing trends, the positive operating cash flow in recent years after a dip in 2020, and growing since, is encouraging. Despite the variability in Net Income over the years, operating cash flow indicates robust operational performance, particularly post-pandemic. Hence, this is a good trend for LVS.

Liquidity of Las Vegas Sands (LVS)

Leverage is declining?

Change in leverage is a critical indicator of a company’s capital structure. Lower leverage usually indicates reduced debt burden, increasing financial stability.

Historical leverage of Las Vegas Sands (LVS)

Comparing the leverage ratios, Las Vegas Sands’ leverage decreased from 0.6328 in 2022 to 0.5569 in 2023. This improvement earns 1 point in the Piotroski score, suggesting a reduced debt burden and improved financial stability. Over the last 20 years, leverage trends have fluctuated, but the recent reduction reaffirms sound debt management.

Current Ratio is growing?

The criterion for assessing the change in the Current Ratio is to compare the liquidity and ability of Las Vegas Sands (LVS) to cover its short-term liabilities. This metric is derived by dividing current assets by current liabilities, providing insights into whether the company can meet its short-term obligations. An increasing Current Ratio generally indicates improved liquidity.

Historical Current Ratio of Las Vegas Sands (LVS)

In 2023, the Current Ratio for Las Vegas Sands (LVS) stands at 1.3064, down from 1.7283 in 2022. This is a clear decrease in the Current Ratio, reflecting a decline in liquidity. The current ratio historically fluctuates, for instance, it was notably higher in 2009 at 3.0575 and lower in 2007 at 0.9235, indicating variability in the company's liquidity management over the years. The industry median Current Ratio for 2023 is also 1.3064, illustrating that LVS is operating at the industry standard. Given the decline in Current Ratio from 2022 to 2023, no point is added for this criterion.

Number of shares not diluted?

Change in shares outstanding is an important criterion in the Piotroski Analysis to gauge the company's equity financing decisions and their impact on shareholder value.

Historical outstanding shares of Las Vegas Sands (LVS)

Las Vegas Sands (LVS) has seen an increase in its outstanding shares from 764 million in 2022 to 763 million in 2023, which marks a decrease in outstanding shares. According to the Piotroski Analysis scoring system, a decrease in outstanding shares is favorable as it suggests the company is potentially buying back shares, thus increasing shareholder value. Therefore, LVS would score 1 point for this criterion. Historically, the outstanding shares for the last 20 years show fluctuations with a peak in 2009 at approximately 656 million shares, then a more stable trend with minor fluctuations, eventually decreasing to the current 763 million shares in 2023. This downward trend in recent years confirms a favorable shareholder policy aimed at enhancing value per share.

Operating of Las Vegas Sands (LVS)

Cross Margin is growing?

This criterion assesses whether the company is improving its sales efficiency. A higher Gross Margin indicates that the company is generating more profit for each dollar of sales, which is a positive sign.

Historical gross margin of Las Vegas Sands (LVS)

In 2023, Las Vegas Sands (LVS) reported a Gross Margin of 0.4982, compared to the Gross Margin of 0.4015 in 2022. This represents a considerable increase. Given the benchmark for adding 1 point when there is an increase, LVS earns 1 point here. Over the past 20 years, LVS's Gross Margin has exhibited volatility but has generally trended upward, except during periods of economic downturns or specific industry challenges. Moreover, LVS's 2023 Gross Margin matches the industry median exactly at 0.4982, signaling that LVS is in relative parity with its industry peers. An improving Gross Margin is a positive indicator, reflecting enhanced cost management or increased pricing power.

Asset Turnover Ratio is growing?

Change in Asset Turnover compares the efficiency of a company's use of its assets to generate sales. An increase indicates better efficiency and management.

Historical asset turnover ratio of Las Vegas Sands (LVS)

The Asset Turnover for Las Vegas Sands (LVS) has significantly increased from 0.1953 in 2022 to 0.4734 in 2023. This over 140% improvement suggests that the company has become markedly more efficient in using its assets to generate revenue. Given the pandemic's negative impact on asset utilization in 2021 and 2022, evidenced by Asset Turnover ratios of 0.1336 and 0.2072 respectively, the current increase signals a strong recovery. Therefore, 1 point is added for this criterion.


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