Last update on 2024-06-07

MorphoSys (MOR) - Piotroski F-Score Analysis for Year 2023 (Final Score: 0/9)

MorphoSys (MOR) Piotroski F-Score Analysis for 2023 reveals a final score of 0/9. Comprehensive evaluation of financial health based on key profitability and liquidity criteria.

Short Analysis - Piotroski Score: 0

We're running MorphoSys (MOR) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

MorphoSys (MOR) scored 0 on the Piotroski F-Score, which ranges from 0 to 9 and indicates a company's financial health. This score is derived by evaluating nine criteria related to profitability, liquidity, and operational efficiency. MOR showed persistent financial struggles with a negative net income, declining Return on Assets (ROA), negative operating cash flow, and an increasing gap between cash flow and net income. Their liquidity is weak as indicated by increasing leverage and a declining current ratio. Additionally, the dilution in shares outstanding and a dropping asset turnover ratio signaling reduced efficiency are alarming signs. Overall, MOR didn't meet any of the nine criteria to earn positive points, underlining severe financial instability and inefficient operations.

Insights for Value Investors Seeking Stable Income

Considering the Piotroski F-Score of 0, MorphoSys (MOR) appears to be in poor financial health with ongoing issues in profitability, liquidity, and operational efficiency. This should be a significant red flag for potential investors. It's highly advisable to avoid investing in this stock as the current indicators suggest high risk and poor performance prospects. As an investor, you may want to look into other stocks with better financial metrics and stability.

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

Profitability of MorphoSys (MOR)

Company has a positive net income?

Net income, also known as net profit or earnings, is a key indicator of a company's profitability. A positive net income suggests that a company is efficient at generating profit from its operations, while a negative net income indicates the opposite.

The net income of MorphoSys (MOR) for the year 2023 is -189734199, which is negative. This results in a score of 0 for this criterion in the Piotroski analysis, reflecting the company's struggle to generate profit. Analyzing the historical data, it's noticeable that MorphoSys has experienced fluctuations in its net income over the past 20 years, with significant losses in several years. For instance, the company had positive net incomes in years like 2005 (4676369), 2013 (13321930), and an exceptional 2020 (97890576), but also extreme negatives such as 2020 (-514460016) and 2021 (-151058190). The consistent negative figures in recent years highlight ongoing challenges in achieving sustainable profitability.

Company has a positive cash flow?

Operating cash flow signifies a company's ability to generate sufficient positive cash from its core business operations. Positive CFO means the company is healthy at its basic operations level.

For MorphoSys (MOR), the Operating Cash Flow (CFO) for 2023 stood at -€295.8 million. This negative CFO is a concerning indicator about MorphoSys's core operational performance in the year 2023. Over the last 20 years, the company has had mixed results, with several years showing negative CFOs, especially notable in recent years (negative since 2019), suggesting a trend towards operational cash struggles. Given this context, in the Piotroski analysis, MorphoSys earns 0 points for this criterion.

Return on Assets (ROA) are growing?

Return on Assets (ROA) gauges how efficient a company's management is in generating earnings relative to its total assets.

For MorphoSys (MOR), the ROA in 2022 was -0.061, which further declined to -0.0858 in 2023. This indicates a deterioration in the company's ability to generate profit from its assets. Consequently, this criterion earns a score of 0, reflecting a negative trend. This performance is notably poor compared to the industry median ROA, which stood at 0.4518 in 2023. Throughout the past two decades, the industry's median ROA has consistently outperformed MorphoSys's ROA, exemplifying the company's ongoing struggles in asset efficiency.

Operating Cashflow are higher than Netincome?

This criterion evaluates if a company's operating cash flow surpasses its net income. It provides insight into the firm's earnings quality.

For 2023, MorphoSys reported an operating cash flow of -295.84 million USD compared to a net income of -189.73 million USD. Given that the operating cash flow is lower than the net income, the assigned score for this criterion is 0. Over the past 20 years, MorphoSys's operating cash flow has shown significant fluctuations, with a mixed trend of positive and negative figures. Noticeably, the gap between operating cash flow and net income has been increasing, signaling potential difficulties in converting accounting profits into actual cash flows. This trend could be a red flag regarding the company's financial health and operational efficiency.

Liquidity of MorphoSys (MOR)

Leverage is declining?

The change in leverage measures the company's debt levels relative to its equity. A decrease in leverage implies better financial health.

The leverage for MorphoSys (MOR) increased from 0.2872 in 2022 to 0.3069 in 2023. This is an unfavorable sign as it indicates that the company is becoming more reliant on debt, instead of equity, to finance its operations. Over the last 20 years, MorphoSys had almost no leverage until 2015, after which it saw a sharp rise, particularly between 2017 and 2023. The trend of increasing leverage is concerning as high leverage can indicate higher financial risk. Thus, for the Piotroski criterion, 0 points should be awarded for this parameter.

Current Ratio is growing?

The Current Ratio measures a company's ability to pay off short-term liabilities with short-term assets. A higher Current Ratio indicates a stronger financial position.

The Current Ratio for MorphoSys (MOR) decreased from 3.9125 in 2022 to 3.0798 in 2023. This decline by approximately 0.83 points indicates a weakening financial position in the ability to meet short-term liabilities with short-term assets. Looking at the historical trend over the last 20 years, MorphoSys had relatively higher current ratios in previous years (e.g., 6.5132 in 2011 and 11.7386 in 2012) which further emphasizes the recent decline. This trending downward contrasts with the industry median, which, although fluctuating, has generally been higher, such as 6.3653 in 2022 and 5.7831 in 2023. Given the decrease from 2022 to 2023, this criterion would not score a point for improvement in the Piotroski Analysis.

Number of shares not diluted?

Change in shares outstanding indicates investor dilutions or buybacks which impact the value and control for existing shareholders.

In the fiscal year of 2023, MorphoSys (MOR) saw its outstanding shares increase from 136,622,600 in 2022 to 137,250,976. This is an increase of 628,376 shares. Over the last 20 years, the overall trend in the outstanding shares has generally been upwards, with a notable surge between 2018 and 2019. A rising number of outstanding shares can imply dilution, which dilutes existing shareholders' value per share. Hence, for this criterion under the Piotroski Analysis, MorphoSys would receive 0 points, marking it potentially negative from an investor standpoint as the increase in shares outstanding is not desirable.

Operating of MorphoSys (MOR)

Cross Margin is growing?

Change in Gross Margin compares the Gross Margin of two consecutive years to see if there is an improvement or decline, crucial for assessing core profitability and operational efficiency.

The Gross Margin for MorphoSys (MOR) in 2023 declined to 0.7551 from 0.8253 in 2022. This marks a decrease rather than an increase in profitability, translating to a score of 0 for this criterion. While the industry's median Gross Margin has often been employed as a comparative benchmark, MorphoSys's 2023 Gross Margin falls short of even the industry's reduced median of 0.4518. Over a span of 20 years, MorphoSys displayed significant variations in its Gross Margin, peaking at 1.3151 in 2005,

Asset Turnover Ratio is growing?

Asset Turnover indicates how efficiently a company uses its assets to generate sales. Comparing this ratio over time helps gauge the efficiency improvements.

The Asset Turnover ratio for Morphosys (MOR) decreased from 0.1124 in 2022 to 0.1077 in 2023. This decline suggests a decrease in efficiency in using assets to generate revenue. Over the past 20 years, the ratio has generally been volatile, peaking at 0.4571 in 2011, and showing a significant drop to 0.0852 in 2021. Despite the small decrease this year, a consistent decrease since 2018 is notable, indicating a broader trend of declining operational efficiency. Therefore, this trend is bad, and no point is added.