Last update on 2024-06-07

Microvision (MVIS) - Piotroski F-Score Analysis for Year 2023 (Final Score: 3/9)

Microvision (MVIS) Piotroski F-Score analysis for 2023: Financial health, profitability, and liquidity assessed. Final Score 3/9.

Short Analysis - Piotroski Score: 3

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

The Piotroski F-Score is a system to analyze a company's financial strength, ranging from 0-9 based on nine criteria. For Microvision (MVIS) in 2023, it scores a 3, indicating weak financial health. The company has negative net income and cash flow from operations and a decline in ROA, leading to 0 points on profitability metrics. MVIS did earn 1 point for having operating cash flow higher than net income. On liquidity, it scored 1 because leverage improved while the current ratio decreased. In operational efficiency, the asset turnover ratio improved (1 point), but gross margin decreased. The number of outstanding shares increased (0 points).

Insights for Value Investors Seeking Stable Income

Given Microvision's (MVIS) Piotroski F-Score of 3 out of 9, it is not performing well financially and operationally. The consistent negative net income and cash flow raise concerns about the company's ability to sustain itself. While there are some positive indicators like improved leverage and asset turnover, they are outweighed by severe profitability issues and share dilution. Investors might want to consider other opportunities with stronger and more stable financial metrics before investing in MVIS.

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

Profitability of Microvision (MVIS)

Company has a positive net income?

Net income is an absolute figure that indicates the profitability of a company, calculated as revenue minus expenses.

The net income for Microvision (MVIS) in 2023 is -$82,842,000, reflecting a negative figure. Historically, the company has consistently reported negative net income over the past 20 years, with amounts ranging from -$13.17 million in 2013 to as high as -$82.84 million in 2023. This persistent trend in negative net income indicates ongoing profitability challenges. Therefore, for the Piotroski score, MVIS would receive 0 points for this criterion.

Company has a positive cash flow?

Operating cash flow is the cash generated from the core business activities of a company and is crucial for assessing its financial health.

For Microvision (MVIS), the Cash Flow from Operations (CFO) in 2023 is -$67,090,000, indicating a negative cash flow which implies a point of 0 for this criterion. Over the past 20 years, MVIS has never achieved a positive CFO, consistently posting negative figures annually. This longstanding trend of negative operating cash flow raises concerns about the company's ability to generate sufficient cash to sustain its operations without external financing. It's crucial for investors to monitor this indicator closely, as a continuously negative CFO can limit the company's growth prospects and financial stability.

Return on Assets (ROA) are growing?

The Change in Return on Assets (ROA) evaluates a company's ability to generate profit from its assets. This metric is essential to understanding how efficiently a company utilizes its assets to generate earnings and is a key indicator of financial performance.

In the case of Microvision (MVIS), the ROA in 2022 was -0.4617 and in 2023 it declined to -0.6773. An increase in ROA typically indicates better performance, but since MVIS's ROA has decreased, it reflects a worsening ability to utilize assets profitably. Therefore, the score for this criterion is set to 0. Over the last 20 years, MVIS has notably underperformed compared to the industry median ROA, which has consistently stayed in positive territory, often above 0.4. MVIS's continuing negative ROA underlines management challenges in asset utilization and profitability.

Operating Cashflow are higher than Netincome?

Operating Cash Flow higher than Net Income indicates that the company's core business operations are generating more cash than the net income reported, implying better quality of earnings. Higher operating cash flow suggests strong profitability and financial health.

In 2023, Microvision (MVIS) reported an Operating Cash Flow of -$67,090,000 and a Net Income of -$82,842,000. Since the Operating Cash Flow is indeed higher than the Net Income, this is a positive trend for Microvision. It reveals that the company's core operations are generating relatively more cash compared to what the Net Income indicates. Despite being negative, the Operating Cash Flow's lesser deficit compared to Net Income is promising. Over the past 20 years, MVIS has consistently reported negative figures in both metrics. However, the lower operating cash flow loss compared to the net income loss this year suggests a mitigated financial strain from core activities, adding stability to its revenue matrix.

Liquidity of Microvision (MVIS)

Leverage is declining?

Change in Leverage indicates the change in indebtedness. It is essential for assessing how well a company is managing its debt relative to its equity.

In 2022, Microvision had a leverage ratio of 0.1203, which decreased to 0.0981 in 2023. This decrease reflects an improvement in the company’s financial leverage, signaling better debt management and possibly lower financial risk. Historically, the last 20 years show fluctuations but remained relatively low, peaking in 2019 and 2022. Adding 1 point for leverage reduction confirms a positive trend towards lower indebtedness, illustrating a favorable movement in the company's capital structure and risk profile.

Current Ratio is growing?

The Current Ratio measures a company's ability to pay short-term obligations with its short-term assets. A higher ratio indicates increased liquidity.

Microvision (MVIS) has experienced a decline in its Current Ratio from 7.965 in 2022 to 4.2313 in 2023. This is a significant shift, pointing to decreased liquidity and might raise red flags about the company's ability to cover its short-term liabilities. Historically, MVIS's Current Ratio has fluctuated significantly, notably reaching a peak of 7.965 in both 2021 and 2022, and the lowest point of 0.5421 in 2019. Compared to the industry median, which has remained relatively stable around 2.5-3.5, MVIS's current ratio is still above the median, indicating healthier liquidity than its peers despite the decrease. This drop in 2023 sets the Current Ratio point to 0 in the Piotroski score, indicating a negative trend for the year.

Number of shares not diluted?

Outstanding Shares refers to all shares currently held by shareholders, including restricted shares owned by corporate officers and insiders.

The Outstanding Shares for Microvision (MVIS) have increased from 165,958,000 in 2022 to 182,802,000 in 2023. This growth indicates a rise in the number of shares available in the market by approximately 16,844,000 shares, or around 10.15%. Such an increase might signal new equity issuances or convertible securities reaching their conversion dates. While this move could indicate capital raising efforts, it also dilutes existing ownership, which is generally viewed negatively by investors as it reduces earnings per share. Therefore, this criterion does not meet the positive threshold for the Piotroski Score, resulting in 0 points. Examining historical data over the past two decades, the trend shows a consistent increase in outstanding shares, reflecting potential regular capital infusion activities.

Operating of Microvision (MVIS)

Cross Margin is growing?

Compare the current year's Gross Margin with the previous year to determine if it has increased.

For Microvision Inc. (MVIS), the Gross Margin has moved from 0.8494 in 2022 to 0.6181 in 2023. This represents a decrease rather than an increase, and therefore, we do not assign a point in this category. Overall, evaluating trends over the last 20 years indicates that while 2021 marked an outlier high, recent fluctuations suggest that the current margin is below both the industry median of 0.4813 for the year 2023. This consistent underperformance and current negative trend would be a red flag for investors according to the Piotroski criteria.

Asset Turnover Ratio is growing?

The Asset Turnover ratio measures the efficiency of a company’s use of its assets in generating sales revenue.

The Asset Turnover ratio for Microvision (MVIS) has increased from 0.0058 in 2022 to 0.0593 in 2023, signaling an improvement. This steep upward shift (a rise of 922.41%) indicates a marked enhancement in how effectively Microvision is employing its assets to generate revenue. Over the last 20 years, the Asset Turnover ratios for MVIS have fluctuated significantly, peaking at 0.8645 in 2016. The significant improvement in 2023, albeit from very low levels, places MVIS in a more favorable stance regarding operational efficiency.