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Last update on 2024-06-06

Robert Half (RHI) - Piotroski F-Score Analysis for Year 2023 (Final Score: 4/9)

Comprehensive Piotroski F-Score analysis for Robert Half (RHI) in 2023. Learn about profitability, liquidity, leverage, and operating efficiency.

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: 4

We're running Robert Half (RHI) 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?
0
Current Ratio is growing?
0
Number of shares not diluted?
1
Cross Margin is growing?
0
Asset Turnover Ratio is growing?
0

The Piotroski F-Score is a measure from 0 to 9, assessing a company’s financial health based on profitability, liquidity, and operating efficiency. Robert Half (RHI) scored 4 out of 9, reflecting a mixed performance. The company boasts consistent net income and strong cash flow from operations, indicating good profitability. Nonetheless, its Return on Assets (ROA) has dropped, which points to reduced efficiency in using its assets over the past year. The company’s leverage has increased slightly, posing potential risks. Additionally, the company's gross margin and asset turnover declined, signaling inefficiencies. However, RHI has been buybacking shares, maintaining a high current ratio signifying strong liquidity, despite a slight downturn.

Insights for Value Investors Seeking Stable Income

With a Piotroski F-Score of 4, Robert Half (RHI) stands on a middle ground. It shows positive signs of profitability and steady cash flow, but has areas needing attention, like declining ROA, gross margin, and asset turnover. If you're looking to invest, it might be beneficial to delve deeper into the company's current and future strategies to address these issues. Given the mixed signals, it’s recommended to keep a cautious approach and monitor for improvements in key areas.

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

Profitability of Robert Half (RHI)

Company has a positive net income?

Analyzing a company's net income is crucial as it indicates profitability.

Historical Net Income of Robert Half (RHI)

In 2023, Robert Half's net income stands at $411,146,000, reflecting a positive net income. This metric adds 1 point to the Piotroski score. Examining the historical data over the last 20 years, we observe fluctuations with peaks in 2021 and 2022 with net incomes of $598,626,000 and $657,919,000 respectively. Despite the decline in 2023 compared to 2022, the sustained positive net income demonstrates the company's consistent profitability, which is a favorable sign.

Company has a positive cash flow?

Cash Flow from Operations (CFO) evaluates the cash-generating efficiency of a company's core business operations. It is crucial to ensure a firm can sustain its operational expenses through internal cash flow.

Historical Operating Cash Flow of Robert Half (RHI)

For Robert Half (RHI), the CFO for 2023 stands at $636,881,000, which is unequivocally positive. This signifies a robust ability to generate cash from its core business activities, adding a critical layer of financial stability. When we examine the aggregate CFO trajectory over the past 20 years, a positive trend is discernible. There's been a consistent uptrend, peaking in 2022 at $683,750,000 before dipping slightly but still maintaining an impressive $636,881,000 in 2023. Such consistent performance not only ensures the addition of 1 point in the Piotroski score but also strengthens investor confidence in the company's operational prowess. The year-over-year growth underscores a well-managed and sustainable business model, making this trend distinctly favorable.

Return on Assets (ROA) are growing?

The change in Return on Assets (ROA) is crucial as it indicates a company's efficiency in generating profit from its assets year-over-year.

Historical change in Return on Assets (ROA) of Robert Half (RHI)

In 2023, Robert Half (RHI) had an ROA of 0.1376, compared to an ROA of 0.2224 in 2022. This marks a decline rather than an increase in profitability relative to its assets. Consequently, based on this criterion of the Piotroski analysis, Robert Half would score 0 points, as the ROA did not improve. However, it is noteworthy to consider historical trends. Specifically, the company's ROA has generally oscillated over the past two decades but has been mostly trailing the industry median. For example, while operating cash flow has generally risen steadily, the industry median ROA for 2023 stood at 0.3223, compared to RHI's 0.1376. This gap suggests missed opportunities for efficiency gains.

Operating Cashflow are higher than Netincome?

This criterion measures whether a company's operating cash flow exceeds its net income. It's essential because it reflects the company's ability to generate sufficient cash from its operations, which is necessary for reinvesting in the business, paying down debt, and returning value to shareholders.

Historical accruals of Robert Half (RHI)

For Robert Half (RHI) in 2023, the Operating Cash Flow stands at $636.88 million while Net Income is $411.15 million. Since Operating Cash Flow exceeds Net Income, this trend is favorable and earns 1 point in the Piotroski Score. This indicates that Robert Half is generating ample cash flow relative to its reported earnings, showcasing strong operational efficiency and potential for future growth. The trend over the last 20 years has generally shown a steady increase in Operating Cash Flow, reinforcing the robustness of their financial performance.

Liquidity of Robert Half (RHI)

Leverage is declining?

Change in Leverage indicates how the company is managing its debt levels over time. It is important as higher leverage can indicate higher financial risk.

Historical leverage of Robert Half (RHI)

The leverage of Robert Half (RHI) increased from 0.0512 in 2022 to 0.0536 in 2023. This is a negative indication as it suggests that the company has increased its debt level relative to its equity. Over the span of the last 20 years, the leverage remained relatively low and only started increasing significantly in recent years, peaking at 0.0875 in 2019 and somewhat stabilizing after that. Given the trend in 2023, Robert Half receives 0 points for this criteria as a lower leverage ratio generally indicates better financial health.

Current Ratio is growing?

Assessing the change in the current ratio for Robert Half (RHI) from 2022 to 2023 is crucial as it helps determine the company's ability to meet its short-term obligations. A higher current ratio indicates better liquidity.

Historical Current Ratio of Robert Half (RHI)

In 2023, the current ratio for Robert Half decreased slightly to 1.8599 from 1.8789 in 2022, marking a downturn. This small decrease places it slightly below the industry median of 1.3723 for 2023, indicating a relatively strong position despite the dip. Historically, looking over the last 20 years, RHI's current ratio reflects a downward trend from 3.6984 in 2003 to its current levels, showcasing tighter liquidity periods particularly post-2015. Observing this 20-year context helps frame the 2023 figure in perspective, albeit at a modest decrease.

Number of shares not diluted?

The criterion evaluates whether the company is able to decrease its outstanding shares over a period, signifying a potential share buyback program or other strategic initiatives to enhance shareholder value. A decrease in shares outstanding is generally considered favorable as it can indicate stronger financial health.

Historical outstanding shares of Robert Half (RHI)

In 2023, Robert Half's outstanding shares decreased to 105.53 million from 108.21 million in 2022. This equates to a reduction of approximately 2.68 million shares. In the context of Piotroski's analysis, where a decreasing trend in outstanding shares is viewed positively, Robert Half earns 1 point for this criterion. Over the last 20 years, RHI has demonstrated a consistent ability to reduce the number of shares annually, barring a few fluctuations. This consistent reduction indicates disciplined share buyback strategies, which could enhance shareholder value by increasing earnings per share (EPS). A decreasing trend in outstanding shares often reflects a confident management outlook on the company's future performance. For this criterion, Robert Half's trend is positive.

Operating of Robert Half (RHI)

Cross Margin is growing?

Evaluate whether the Gross Margin increased or decreased from the previous year. This criterion is important as it helps measure a company’s financial health and efficiency in managing production costs compared to revenues.

Historical gross margin of Robert Half (RHI)

The Gross Margin for Robert Half (RHI) has decreased from 0.4275 in 2022 to 0.4028 in 2023. Therefore, 0 points are awarded for this criterion. This decline suggests the company has been less efficient in managing its cost of goods sold relative to its revenues. Spanning the last 20 years, RHI's Gross Margin has seen fluctuations; however, it consistently stayed above the industry median, which is a positive indicator of performance. The industry median Gross Margin was fairly stable in the same period, hovering around 0.32-0.33, with brief peaks. Although RHI's margin dipped in 2023, it remains competitive within its industry.

Asset Turnover Ratio is growing?

Change in Asset Turnover is a critical ratio that measures a company's efficiency in using its assets to generate sales revenue. It can indicate shifts in operational effectiveness.

Historical asset turnover ratio of Robert Half (RHI)

The Asset Turnover for Robert Half (RHI) in 2023 was 2.1397, which shows a decrease from 2.4466 in 2022. This downward trend suggests that RHI became less efficient in using its assets to generate revenue. Based on the 20 years of historical data, RHI had generally maintained relatively high Asset Turnover ratios, with a peak of 3.3069 in 2012 and a low of 2.062 in 2003. Considering this historical performance, the recent decline in Asset Turnover may indicate some operational inefficiencies or challenges in converting assets into sales. Therefore, for the Piotroski Analysis, we assign 0 points for this criterion.


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