ROK 294.05 (+3.1%)
US7739031091Industrial ProductsSpecialty Industrial Machinery

Last update on 2024-06-06

Rockwell Automation (ROK) - Piotroski F-Score Analysis for Year 2023 (Final Score: 9/9)

Get a complete Piotroski F-Score analysis of Rockwell Automation (ROK) for 2023. Discover insights into its financial health and investment attractiveness with a perfect 9/9 score.

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: 9

We're running Rockwell Automation (ROK) 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?
1
Current Ratio is growing?
1
Number of shares not diluted?
1
Cross Margin is growing?
1
Asset Turnover Ratio is growing?
1

Rockwell Automation, with a high Piotroski F-Score of 9, shows strong financial health. The company has a positive net income of $1,278M and cash flow from operations of $1,374.6M in 2023. Its ROA grew from 8.57% in 2022 to 11.59% in 2023. Additionally, the operating cash flow is higher than net income, indicating good earnings quality. However, leverage slightly increased from 2022 to 2023. Positively, the current ratio improved, reflecting better short-term financial stability. The number of outstanding shares decreased due to buybacks, and gross margin and asset turnover ratio both showed growth in 2023. Overall, these points suggest robust profitability and operational efficiency.

Insights for Value Investors Seeking Stable Income

Given Rockwell Automation's strong Piotroski F-Score of 9, indicating strong financials, profitability, and operational efficiency, it may be a promising investment opportunity. However, potential investors should also consider the slight increase in financial leverage and whether the company's positive trends in key metrics can be maintained. Conducting further due diligence, considering future market conditions, and comparing with other industry players would be prudent steps before investing.

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

Profitability of Rockwell Automation (ROK)

Company has a positive net income?

Net income is the company's total profit or loss after all expenses, including taxes, have been deducted from its total revenue. It is a crucial indicator of profitability and business performance.

Historical Net Income of Rockwell Automation (ROK)

Rockwell Automation (ROK) reported a net income of $1,278,000,000 in 2023, which is positive. This is a strong number and indicates profitability. Based on the Piotroski F-Score analysis, this criterion would earn 1 point for Rockwell Automation. When compared to the historical data spanning the past 20 years, we see fluctuations, but the net income has generally been positive and particularly robust in recent years. The 2023 figure is the second-highest in the 20-year span, signifying good financial health and growth. The positive net income aligns with a strong financial performance, contributing positively to Rockwell's investment attractiveness.

Company has a positive cash flow?

The Cash Flow from Operations (CFO) is a measure of the amount of cash generated by a company's normal business operations. It is important because it indicates the efficiency and sustainability of a company's core business activities.

Historical Operating Cash Flow of Rockwell Automation (ROK)

Rockwell Automation (ROK) has reported a Cash Flow from Operations (CFO) of $1,374,600,000 in 2023. This is a positive figure; hence, it adds 1 point to the Piotroski score. Analyzing the 20-year trend, ROK has demonstrated consistent growth in CFO, with notably high figures in recent years. This positive trend showcases the resilience and operational efficiency of ROK's core business activities. For instance, there is a significant increase from $436 million in 2003 to $1,374.6 million in 2023, reflecting a robust growth trajectory. Thus, the positive CFO for 2023 is a good indicator of the company’s strong operational health.

Return on Assets (ROA) are growing?

Return on Assets (ROA) measures a company's profitability relative to its total assets. An increasing ROA indicates effective management of assets to generate earnings.

Historical change in Return on Assets (ROA) of Rockwell Automation (ROK)

Rockwell Automation's (ROK) ROA increased from 0.0857 in 2022 to 0.1159 in 2023. Although Rockwell Automation has increased its ROA, boasting figures of 11.59% from 8.57%, it still lags behind the industry median ROA of 34.92% in 2023. Despite this disparity, the uptick from 2022 to 2023 is undoubtedly positive. Over the past 20 years, Rockwell's operating cash flow also shows a general uptrend, peaking at approximately 1.37 billion in 2023, which fortifies the positive outlook and reflects robust operational performance. Rockwell Automation receives 1 point for this criterion.

Operating Cashflow are higher than Netincome?

Operating cash flow higher than net income: This criteria checks if the company's core operations are generating sufficient cash to cover its reported earnings. A higher operating cash flow compared to net income suggests good earnings quality

Historical accruals of Rockwell Automation (ROK)

For Rockwell Automation (ROK) in 2023, the operating cash flow was $1,374.6 million, while net income stood at $1,278 million. This yields a positive result as the operating cash flow is indeed higher than the net income. Thus, the criterion awards 1 point to Rockwell Automation, implying healthy earnings quality. Historically, analyzing over 20 years of data shows that Rockwell Automation frequently maintained higher operating cash flows than net income, particularly in the most recent year—2023—where operating cash flow was $1,374.6 million compared to a net income of $1,278 million. This consistent trend suggests robust operating efficiency and earnings durability, reinforcing investor confidence.

Liquidity of Rockwell Automation (ROK)

Leverage is declining?

The Piotroski criterion assesses whether leverage has increased or decreased from the previous year. Lower leverage is preferable.

Historical leverage of Rockwell Automation (ROK)

By comparing the leverage ratios, it's evident that Rockwell Automation's leverage has seen a slight increase from 0.2785 in 2023, coming from 0.291 in 2022, failing this Matthew 1 criterion of the Piotroski F-score. Examining the leverage trend over the past 20 years reveals fluctuations but a general increase overall. Current levels are elevated compared to earlier years, like 2003 (0.1917) and 2004 (0.1804). This uptick in financial leverage can imply higher financial risks, impacting Rockwell Automation’s ability to cover its financial obligations.

Current Ratio is growing?

The Current Ratio compares a company's current assets to its current liabilities, reflecting its ability to cover short-term obligations. An increase is generally a positive sign.

Historical Current Ratio of Rockwell Automation (ROK)

From 2022 to 2023, Rockwell Automation's Current Ratio has increased from 1.0108 to 1.4592, meriting an additional point in the Piotroski Analysis. Analyzing the broader data, Rockwell's Current Ratio has remained below the industry median (1.7757) in 2023, though there has been an improvement from its declining trend in recent years. The increase is a good indicator of improved liquidity and short-term financial strength for Rockwell Automation, particularly important as it shows a rebound from previous lows and a move towards a more favorable position within the industry. Nonetheless, sustainability of this trend should be closely monitored.

Number of shares not diluted?

Change in shares outstanding assesses stock buybacks or additional issuances.

Historical outstanding shares of Rockwell Automation (ROK)

In 2022, Rockwell Automation had 115,900,000 outstanding shares, which decreased to 114,800,000 in 2023. This reduction indicates a share buyback, suggesting a decrease of approximately 1.0%. Over the last 20 years, Rockwell has generally trended towards reducing its outstanding shares, from a high of 191,100,000 in 2004 to the current 114,800,000. This is a continuation of the trend, reflecting positively on shareholder value by making existing shares more valuable. Therefore, Rockwell Automation gains 1 point for this criterion.

Operating of Rockwell Automation (ROK)

Cross Margin is growing?

Gross Margin indicates the company’s profitability after the cost of goods sold and is a critical indicator of financial health.

Historical gross margin of Rockwell Automation (ROK)

In 2023, Rockwell Automation (ROK) posted a Gross Margin of 0.4104 compared to 0.3997 in 2022. This indicates an increase in Gross Margin in 2023, thereby scoring 1 point in the Piotroski Analysis. Over the past 20 years, the Gross Margin for Rockwell Automation has exhibited fluctuations but generally maintained an upward trend, outperforming the industry median annually. This improvement in Gross Margin is positive, showcasing the company's growing efficiency in managing production costs relative to its revenue generation.

Asset Turnover Ratio is growing?

The change in asset turnover ratio measures the efficiency of a company in generating sales from its assets. An increase in this ratio is a positive indicator.

Historical asset turnover ratio of Rockwell Automation (ROK)

In 2023, Rockwell Automation (ROK) exhibited an Asset Turnover of 0.8211 compared to 0.7232 in 2022. This marks a notable improvement in its ability to generate sales from its assets, as evidenced by the increase from the previous year. Historically, the firm's Asset Turnover ratio has fluctuated, peaking at 1.2469 in 2008 and hitting a low of 0.7232 in 2022. The rise in 2023 suggests enhanced operational efficiency, likely attributed to better asset utilization or increased sales volumes. Hence, according to the Piotroski Analysis, Rockwell Automation would earn 1 point for this criterion.


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