S92.DE 26.46 (-2.65%)
DE000A0DJ6J9SemiconductorsSolar

Last update on 2024-06-07

SMA Solar Technology (S92.DE) - Piotroski F-Score Analysis for Year 2023 (Final Score: 7/9)

Comprehensive Piotroski F-Score analysis of SMA Solar Technology (S92.DE) for 2023, achieving a favorable score of 7/9 based on financial strength criteria.

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 SMA Solar Technology (S92.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?
0
Leverage is declining?
1
Current Ratio is growing?
0
Number of shares not diluted?
1
Cross Margin is growing?
1
Asset Turnover Ratio is growing?
1

SMA Solar Technology (S92.DE) has a Piotroski F-Score of 7. This score is based on various criteria assessing profitability, liquidity, and operating efficiency. The company shows positive net income and cash flow from operations, an improving return on assets, and higher gross margin and asset turnover ratios compared to 2022. However, it has a stagnant leverage ratio, a slightly declining current ratio, and its operating cash flow is below its net income. The number of outstanding shares remained constant, indicating no dilution.

Insights for Value Investors Seeking Stable Income

Given the Piotroski F-Score of 7, SMA Solar Technology appears financially strong and might be a promising investment opportunity, especially if you are looking for companies with good profitability and improving operational efficiencies. However, you should be cautious about its slightly declining liquidity and the fact that operating cash flow is not surpassing net income, which could indicate potential cash conversion issues.

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

Profitability of SMA Solar Technology (S92.DE)

Company has a positive net income?

Net income an important indicator of profitability, revealing the company's financial health and operational efficiency.

Historical Net Income of SMA Solar Technology (S92.DE)

The net income for SMA Solar Technology in 2023 is 225,670,000, marking a positive figure. Historically, analyzing the last 20 years of net income data, the company experienced periods of losses especially between 2012-2014 and 2018-2020, but recent years have shown a trend towards recovery and positive gains. For the Piotroski score, a positive net income for 2023 adds 1 point, reflecting improved financial health.

Company has a positive cash flow?

Cash Flow from Operations (CFO) represents the cash inflow from day-to-day business operations, excluding investments or financing-related inflows. Examining SMA Solar Technology's (S92.DE) CFO is crucial as it showcases the firm's ability to generate cash from its operational performance. A positive CFO indicates healthy operational efficiency and underlines the company's capacity to sustain and grow without relying on external financing.

Historical Operating Cash Flow of SMA Solar Technology (S92.DE)

The Cash Flow from Operations (CFO) for SMA Solar Technology (S92.DE) in 2023 is €140,777,000, indicating a positive cash flow from the company's core business operations. Looking at the historical trend over the last 20 years, the annual CFO has shown significant fluctuation, with certain years depicting negative cash flow, such as 2013 with -€2,447,000, 2014 with -€27,570,000, and 2018 with -€54,268,000. However, the positive turn in recent years, peaking at €140,777,000 in 2023, suggests improved operational efficiency and financial health. This improvement from negative CFOs in several past years to a considerably positive in 2023 points towards better management and streamlined operations, adding a point under the Piotroski criterion and highlighting a positive trend for SMA Solar Technology. Therefore, this trend is favorable.

Return on Assets (ROA) are growing?

ROA (Return on Assets) measures the efficiency of a company in generating profits from its assets. It is calculated by dividing net income by total assets.

Historical change in Return on Assets (ROA) of SMA Solar Technology (S92.DE)

SMA Solar Technology (S92.DE) has shown a marked improvement in its Return on Assets (ROA), increasing from 0.0516 in 2022 to 0.1652 in 2023. This essentially means that in 2022, for every euro in assets, the company generated approximately 5.16 cents in profit, whereas in 2023, this value jumped to 16.52 cents. Historically, this is a positive change, indicative of better asset utilization and operational efficiency. Viewing this in light of broader sector trends, since the industry median ROA was 0.2636 in 2023, SMA Solar's ROA is still below the median, but the remarkable improvement shows a strong effort to close the gap. Considering this robust improvement, 1 point is added according to the Piotroski scoring model. Moreover, the company's positive change could encourage investor confidence given this trend compared to the previous year’s figures. This step will potentially strengthen the overall financial health and market perception of SMA Solar Technology.

Operating Cashflow are higher than Netincome?

Operating Cash Flow being higher than Net Income indicates that a company is efficiently converting its revenue into real cash flows. This criterion signals financial health and robustness.

Historical accruals of SMA Solar Technology (S92.DE)

In 2023, SMA Solar Technology reports an Operating Cash Flow of €140.78 million compared to a higher Net Income of €225.67 million, failing this Piotroski F-Score criterion. Historically, the company has shown fluctuating Operating Cash Flows and Net Incomes, with significant deviations in years such as 2014 and 2018, confirming inconsistent cash conversion efficiency. As such, for 2023, this criterion is marked with 0 points, reflecting a potentially less robust financial condition despite the reported net income growth.

Liquidity of SMA Solar Technology (S92.DE)

Leverage is declining?

This criterion examines whether the company's leverage—measured as the ratio of total debt to total assets—has decreased. It is crucial as a lower leverage indicates reduced financial risk and improved financial stability.

Historical leverage of SMA Solar Technology (S92.DE)

Despite leverage being consistently low for SMA Solar Technology over the last two decades, maintaining a leverage ratio of 0 in both 2022 and 2023 indicates no change in financial risk in that period. However, since the task stipulates an increase in 2023, the leverage evidently hasn't reduced. Historical data shows SMA Solar's leverage has been chiefly negligible, highlighting the company’s robust financial strategy to eschew substantial debt and bolster financial stability. Thus, based on Piotroski's scoring system, we would assign this a 0, marking no positive movement in leverage.

Current Ratio is growing?

Current Ratio measures a company's ability to pay short-term obligations with its current assets. It is important as it reflects financial health and liquidity.

Historical Current Ratio of SMA Solar Technology (S92.DE)

The Current Ratio for SMA Solar Technology slightly decreased from 1.8925 in 2022 to 1.8298 in 2023, thus the trend does not warrant a point in the Piotroski analysis. A drop in the ratio indicates a reduced buffer for meeting short-term liabilities with short-term assets, which may be a warning signal of potential liquidity issues ahead. Although still above the industry median of 1.8298 in 2023, the consistent decrease over the past two years suggests waning short-term financial robustness. Interestingly, the company achieved higher Current Ratios in multiple years over the past two decades, peaking at 3.3085 in 2012, which provides context for how the present ratio compares historically.

Number of shares not diluted?

Change in Shares Outstanding reflects how much new capital a company has been raising by issuing shares, potentially diluting existing shareholders' equity.

Historical outstanding shares of SMA Solar Technology (S92.DE)

The Outstanding Shares for SMA Solar Technology (S92.DE) remained constant at 34,700,000 from 2022 to 2023. Therefore, there was no increase or decrease in the number of shares outstanding. No additional shares dilution has occurred, maintaining shareholder value. This trend can be considered neutral in this context, as it indicates stability in the company's equity structure. Hence, for this criterion, the point remains 0.

Operating of SMA Solar Technology (S92.DE)

Cross Margin is growing?

Change in Gross Margin reflects a company's operational efficiency improvement or deterioration year over year. For SMA Solar Technology, a higher Gross Margin could indicate better cost management, pricing power, or both.

Historical gross margin of SMA Solar Technology (S92.DE)

For the fiscal year 2023, SMA Solar Technology (S92.DE) posted a Gross Margin of 29.38%, an improvement over the 21.04% Gross Margin in 2022. This signifies an increase of 8.34 percentage points, thus adding 1 point to the Piotroski F-Score. Comparing this with the last 20 years of Gross Margin data, the latest Gross Margin figure represents a significant recovery to levels last seen in the mid-2000s. Additionally, the industry's median Gross Margin in 2023 was 26.36%, indicating that SMA Solar Technology has outperformed the industry average by approximately 3 percentage points. This positive Gross Margin trend for 2023 indicates enhanced operational efficiency and competitive positioning for SMA Solar Technology.

Asset Turnover Ratio is growing?

Asset Turnover measures the efficiency of a company's use of its assets to generate sales. A higher ratio is preferable as it indicates better performance.

Historical asset turnover ratio of SMA Solar Technology (S92.DE)

In 2023, SMA Solar Technology witnessed an Asset Turnover ratio of 1.3939, up from 0.9853 in 2022. This increase signifies improved operational efficiency, indicating that the company is generating more sales per asset.


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