RAA.DE 782 (+1.76%)
DE0007010803Industrial DistributionIndustrial Distribution

Last update on 2024-06-07

Rational (RAA.DE) - Piotroski F-Score Analysis for Year 2023 (Final Score: 7/9)

Piotroski F-Score Analysis 2023 rates Rational (RAA.DE) at 7/9, highlighting profitability, liquidity, and efficiency strengths.

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 Rational (RAA.DE) 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?
1
Operating Cashflow are higher than Netincome?
1
Leverage is declining?
0
Current Ratio is growing?
1
Number of shares not diluted?
1
Cross Margin is growing?
1
Asset Turnover Ratio is growing?
0

Rational (RAA.DE) underwent a Piotroski F-Score analysis to gauge its financial health. The stock achieved a score of 7 out of 9, indicating overall strong performance. The analysis covers nine criteria, including profitability, liquidity, and operational efficiency. Rational showed positive trends in net income, cash flow, and return on assets. It also maintained a strong current ratio and improved its gross margin. However, it lost points in areas like leverage increase, asset turnover ratio drop, and share dilution equilibrium.

Insights for Value Investors Seeking Stable Income

With a Piotroski F-Score of 7, Rational (RAA.DE) demonstrates solid financial health and operational efficiency, making it an attractive prospect for investors. The company’s consistent profitability, robust operational cash flow, and better-than-average liquidity are particularly promising. While certain areas like rising leverage and a slight drop in asset turnover are potential concerns, these do not significantly detract from its overall strength. It is worth considering for those looking to invest in fundamentally sound stocks.

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

Profitability of Rational (RAA.DE)

Company has a positive net income?

A positive net income indicates a profitable company, reflecting efficient management and suggesting good financial health.

Historical Net Income of Rational (RAA.DE)

Rational (RAA.DE) has reported a net income of €215,762,000 in 2023, which is positive. This is a significant trend, as it reflects not only the profitability of the company for that year but also an upward trajectory when compared to previous years. In fact, from 2003 through 2023, the net income has consistently been positive, growing from €26,806,000 in 2003. This upward trend suggests robust financial growth and warrants a score of 1 under the Piotroski criterion for net income.

Company has a positive cash flow?

Cash Flow from Operations (CFO) evaluates the amount of cash that a company generates from its regular operating activities within a specific period and is crucial as a measure of a company's financial health.

Historical Operating Cash Flow of Rational (RAA.DE)

For Rational (RAA.DE), the CFO in 2023 stands at €258,345,000, which reflects a positive cash flow. This is not just a single occurrence; examining the trend over the past 20 years displays a consistently positive cash flow. A positive CFO is always promising as it indicates that the company's core business operations are generating sufficient cash to sustain and grow its operations without the need for external financing. Comparing the current year’s CFO to the past, one can observe a continued upward trajectory, particularly notable from the €92,690,000 in 2020. Consequently, the trend is good, demonstrating reliable and growing operational efficiency. Thus, Rational earns 1 point for this criterion.

Return on Assets (ROA) are growing?

One important criterion in the Piotroski analysis is the Change in Return on Assets (ROA). This metric indicates the efficiency of a company in generating earnings from its assets.

Historical change in Return on Assets (ROA) of Rational (RAA.DE)

Rational's ROA increased from 0.2207 in 2022 to 0.2312 in 2023. According to the Piotroski analysis rule, this performance earns 1 point because the ROA showed an improvement. Such a positive trend suggests more efficient use of the company's assets in generating earnings. However, when we compare these figures with the industry median ROA (0.3023 in 2023), Rational is still performing below the industry norm. Although the incremental rise is favorable (e.g., from 177,670,000 in 2021 to 195,534,000 in 2022 in operating cash flow), potential investors might consider whether Rational can continue this upward performance to match or exceed industry averages.

Operating Cashflow are higher than Netincome?

One criterion in the Piotroski Score analyzes if the operating cash flow is greater than net income. Positive operating cash flow above net income indicates a high-quality revenue.

Historical accruals of Rational (RAA.DE)

With Rational AG's (RAA.DE) operating cash flow at €258,345,000 and net income at €215,762,000 in 2023, the operating cash flow exceeds net income. This is a positive indicator. Reviewing the past two decades, it shows consistent growth in operating cash flow, which signifies stability and reliability. For instance, in economically turbulent 2020, the operating cash flow was €92,690,000 recovering significantly in 2023 to €258,345,000, depicting resilience. Thus, for this criterion, Rational AG earns 1 point.

Liquidity of Rational (RAA.DE)

Leverage is declining?

Change in leverage assesses how the company's debt usage has evolved. Increasing leverage suggests higher borrowing, which can amplify returns but also risks, whereas a decrease implies improving financial stability.

Historical leverage of Rational (RAA.DE)

For Rational (RAA.DE), the leverage has increased from 0.0127 in 2022 to 0.0203 in 2023. Therefore, no point is added in the Piotroski F-Score for this criterion. While examining the historical leverage trends over the last two decades, Rational has typically maintained low leverage, peaking at 0.0825 in 2013, but largely staying below 0.04. The increase in 2023, though modest by historical standards, breaks a downward trend observed since 2016. This rise in leverage indicates the company is potentially taking on more debt, which could be in response to financing needs or investment opportunities, but also introduces higher financial risk.

Current Ratio is growing?

The current ratio measures a company’s ability to pay short-term obligations with its short-term assets. A higher current ratio indicates better liquidity and financial health.

Historical Current Ratio of Rational (RAA.DE)

The current ratio for Rational (RAA.DE) has increased from 3.4556 in 2022 to 3.7753 in 2023, resulting in a 1-point gain under the Piotroski criteria. This improvement in liquidity suggests that Rational's short-term financial health is strengthening, as it is better equipped to cover its short-term liabilities with its short-term assets. Additionally, when compared to the industry median current ratio, which was 2.4086 in 2023, Rational's current ratio is significantly higher. Historically, as seen over the last 20 years, it's clear that the company's current ratio has fluctuated but has generally remained above the industry median. Thus, Rational shows better-than-average liquidity compared to its peers.

Number of shares not diluted?

The 'Change in Shares Outstanding' criterion examines if the company has diluted its share base. A decrease in outstanding shares signals shareholder value creation.

Historical outstanding shares of Rational (RAA.DE)

In 2023, Rational (RAA.DE) reported 11,370,000 outstanding shares, identical to 2022's figure. Over a 20-year span, the outstanding shares remained largely stable, fluctuating only slightly around 11,370,000. Importantly, there was no decrease in outstanding shares in 2023. Consequently, per the Piotroski scorecard, Rational earns 0 points for 'Change in Shares Outstanding.' Stability in share count might suggest careful capital management, though no anti-dilutive effect adds value here.

Operating of Rational (RAA.DE)

Cross Margin is growing?

This criterion assesses the ability of a company to improve its production efficiency or achieve better pricing. A higher gross margin indicates more profit per dollar of revenue.

Historical gross margin of Rational (RAA.DE)

Comparing 2023's gross margin of 0.5672 to 2022's gross margin of 0.5527, Rational has indeed seen an improvement. This 0.0145 increase (from 55.27% to 56.72%) which results in an additional point for this criterion. This indicates improved efficiency or better pricing strategies. Analyzing 21 years of gross margin data shows fluctuation but generally high margins against the industry median. Consistently performing above the industry median (0.3023 in 2023) is significant. This trend signals Rational’s operational stability and ability to maintain profitability.

Asset Turnover Ratio is growing?

Asset turnover ratio indicates a company's efficiency in using its assets to generate sales. Higher ratios suggest better performance.

Historical asset turnover ratio of Rational (RAA.DE)

In 2023, Rational's asset turnover ratio was 1.2066, slightly down from 1.2149 in 2022, marking a small decrease. While the decrease is marginal, it signifies that the company has become slightly less efficient in using its assets to produce revenue compared to the previous year. This trend is not favorable, as reflected by the ratio decreasing over the year. Comparatively, the trend over the past 20 years shows highs of over 2.0 during early periods, suggesting a decline in asset utilization efficiency over time. Therefore, no point is awarded.


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