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Last update on 2024-06-07

Perficient (PRFT) - Piotroski F-Score Analysis for Year 2023 (Final Score: 5/9)

Analyze Perficient (PRFT) via Piotroski F-Score for 2023 with a final score of 5/9. Key financial measures assessed include profitability, liquidity, and leverage.

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: 5

We're running Perficient (PRFT) 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?
0
Cross Margin is growing?
0
Asset Turnover Ratio is growing?
0

The Piotroski F-Score evaluates Perficient's (PRFT) financial health, scoring 5 out of 9. PRFT excels in profitability indicators: positive net income of $98.93M and increasing historical cash flow, reflected by a 2023 cash flow from operations at $142.97M. However, its Return on Assets declined, impacting profits. Liquidity measures were strong, with a current ratio rising dramatically from 1.98 in 2022 to 4.15 in 2023. Leverage slightly increased, raising concerns. Operational efficiency saw mixed results, with the gross margin decreasing from 0.389 to 0.3663 and the asset turnover ratio declining over time.

Insights for Value Investors Seeking Stable Income

With a Piotroski F-Score of 5, Perficient (PRFT) presents moderate financial strength. Its strong liquidity and positive cash flows indicate robust operational health, but increasing leverage and decreasing asset efficiency are areas of concern. Potential investors should explore PRFT for its consistent profitability while being cautious of its declining operational efficiency. PRFT may be worth considering if investors look for companies with solid liquidity but should monitor leverage and efficiency for long-term growth prospects.

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

Profitability of Perficient (PRFT)

Company has a positive net income?

Net income signifies a company's profitability over a specific period. A positive net income indicates good financial health, crucial for investors.

Historical Net Income of Perficient (PRFT)

For the fiscal year 2023, Perficient's (PRFT) reported net income stands at $98,933,000, marking a positive trend. Historically, this performance remains consistent as demonstrated by the last 20 years of net income data, where the company has maintained profitability with net income figures ranging from $1,050,032 in 2003 to peaking at $104,392,000 in 2022. This sustained profitability underscores robust operational efficiency and market positioning. Therefore, according to the Piotroski criteria, this criterion earns Perficient a point.

Company has a positive cash flow?

This criterion assesses if the company's cash flow from operations (CFO) is positive, indicating its ability to generate sufficient cash through core business activities.

Historical Operating Cash Flow of Perficient (PRFT)

In 2023, Perficient (PRFT) reported a cash flow from operations (CFO) of $142,967,000. This positive figure is an excellent indication of PRFT's operational health. Historically, from 2003 to 2023, the company's CFO has shown consistent growth. Specifically, the CFO increased from merely $1,885,477 in 2003 to $142,967,000 in 2023. This steady upward trajectory over two decades highlights a robust and improving cash-generating capability. The substantial positive CFO in 2023 confirms that Perficient excels in converting revenue into actual cash flow, validating the strong operational efficiency of the company.

Return on Assets (ROA) are growing?

This criterion examines the change in Return on Assets (ROA) on a year-over-year basis. If the ROA increases, it suggests improving profitability and management effectiveness. A higher ROA indicates that a company is more efficiently using its assets to generate earnings, which is crucial for evaluating overall financial health and operational performance.

Historical change in Return on Assets (ROA) of Perficient (PRFT)

In 2023, Perficient's ROA was 0.096, down from 0.1111 in 2022. The trend shows a decrease in ROA, translating to reduced profitability and potentially less efficient asset utilization this year. Given that the ROA declined, this criterion would yield a score of 0. This decline could be perceived negatively by investors, especially since the industry median ROA consistently hovers over 0.3, underscoring Perficient’s underperformance in asset utilization relative to its peers.

Operating Cashflow are higher than Netincome?

The criterion examines whether the company’s operating cash flow is greater than its net income.

Historical accruals of Perficient (PRFT)

For Perficient (PRFT) in 2023, the Operating Cash Flow was $142.97 million compared to a Net Income of $98.93 million. Given that the Operating Cash Flow is higher than the Net Income, this criterion scores 1 point for PRFT. This is a positive indicator as it suggests that the company is generating sufficient cash from its operations to cover its reported earnings. Over the last 20 years, the operating cash flow for PRFT has exhibited a growing trend, increasing from about $1.89 million in 2003 to $142.97 million in 2023. This aligns well with the accruals data, which remain stable. This positive trend underscores the company’s robust operational efficiency.

Liquidity of Perficient (PRFT)

Leverage is declining?

Change in leverage is a crucial measure for assessing a company's financial stability. A decrease in leverage signifies reduced debt reliance, boosting financial health.

Historical leverage of Perficient (PRFT)

Comparing the leverage ratios, Perficient's leverage has increased slightly from 0.3882 in 2023 from 0.4148 in 2022. Thus, Perficient does not gain a point for this criterion, as an increase in leverage generally indicates higher debt levels, which can raise financial risks. Historically, Perficient's leverage has varied significantly. After no leverage from 2007-2009, it spiked modestly in 2010 (0.0105). The highest leverage appears in recent years, peaking at 0.4148 in 2022 before a marginal dip to 0.3882 in 2023. This variability underscores the importance of careful leverage management.

Current Ratio is growing?

Compare the Current Ratio of 4.1537 in 2023 with the Current Ratio of 1.9795 in 2022 and check if Current Ratio increased or decreased.

Historical Current Ratio of Perficient (PRFT)

Perficient's (PRFT) current ratio surged markedly from 1.9795 in 2022 to 4.1537 in 2023, indicating a 109.94% increase. Such an increase is noteworthy and underscores a stronger liquidity position compared to the previous year. Evaluating a longer-term perspective, Perficient's current ratio has mostly been robust, with fluctuations yet generally above the industry median. Specifically, the average of Perficient's current ratio over the past 10 years stands at approximately 2.47, further establishing the recent spike as significant. Similarly, the industry median has been relatively stable around the 1.5 mark over the last two decades. In 2023, Perficient's 4.1537 current ratio far exceeds the 1.4169 industry median, highlighting superior liquidity positioning. The increased ratio gets Perficient an additional point in the Piotroski analysis.

Number of shares not diluted?

The criterion examines the change in the number of shares outstanding, indicating potential dilution or buybacks.

Historical outstanding shares of Perficient (PRFT)

For Perficient (PRFT), the outstanding shares increased from 33,869,000 in 2022 to 33,992,000 in 2023, reflecting a rise of 123,000 shares. Over the last 20 years, the shares outstanding have generally been on an upward trend, with notable increases in specific years, such as from 31,086,000 in 2012 to 31,808,000 in 2013. The increase in shares outstanding indicates potential dilution, which could be unfavorable for existing shareholders. Consequently, this criterion points to a 0 score for 2023, suggestive of dilution rather than shareholder value enhancement.

Operating of Perficient (PRFT)

Cross Margin is growing?

Gross Margin compares a company's gross profit to its revenue. It is a key indicator of a company's financial health.

Historical gross margin of Perficient (PRFT)

For Perficient (PRFT), the Gross Margin has actually decreased from 0.3893 in 2022 to 0.3663 in 2023. This decrease signifies that the company is becoming less efficient at controlling its production costs, or other operational inefficiencies may have crept in. Despite a generally improved trend from 2009 to 2022 when the margin showed consistent improvement, this recent drop is a negative signal. Comparing this to the industry median of 0.3391 in 2023, Perficient still performs above average, but the decreasing trend is concerning and scores 0 points on Piotroski’s scale.

Asset Turnover Ratio is growing?

Asset Turnover Ratio indicates a company's efficiency in using its assets to generate sales. A higher ratio means better performance.

Historical asset turnover ratio of Perficient (PRFT)

Comparing the Asset Turnover of 0.8799 in 2023 with 0.9636 in 2022, this indicates a decrease in efficiency. Hence, 0 points are assigned for this criterion. Additionally, analyzing the historical data over the past 20 years, it is evident that Perficient (PRFT) has experienced fluctuations in its Asset Turnover Ratios, peaking at values above 1.5 during the early 2000s and gradually declining, showcasing a downward trend in recent years. The consecutive drop from 2021 to 2023 emphasizes the firm's consistent struggle in maintaining asset efficiency. This trend highlights potential areas for operational improvements.


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