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Last update on 2024-06-04

Siemens Healthineers (SHL.DE) - Piotroski F-Score Analysis for Year 2023 (Final Score: 5/9)

Analyze Siemens Healthineers' (SHL.DE) Piotroski F-Score for 2023 in detail. Final score: 5/9, assessing financial strengths in profitability, liquidity, and 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: 5

We're running Siemens Healthineers (SHL.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?
0
Operating Cashflow are higher than Netincome?
1
Leverage is declining?
1
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 for Siemens Healthineers (SHL.DE) is 5, indicating a moderately strong financial position but also hinting at potential areas of concern. The company demonstrates solid profitability with sustained positive net income and operational cash flow, although the Return on Assets and Gross Margin have recently declined. Liquidity indicators are mixed, with a slight decrease in the Current Ratio indicating weaker short-term liquidity, but a positive change in leverage signaling better financial stability. Additionally, a reduction in outstanding shares is a positive sign regarding share dilution.

Insights for Value Investors Seeking Stable Income

Given the Piotroski F-Score analysis, Siemens Healthineers shows certain strengths in profitability and long-term stability but also exhibits some weaknesses in asset efficiency and short-term liquidity. For an investor, this stock might be worth considering due to its stable profitability and sound leverage management. However, the decline in asset turnover and Gross Margin should be watched closely. If you're looking for balanced risk with room for improvement, this could be a reasonable choice, contingent on future performance monitoring. Comprehensive due diligence is advised before making any investment decision.

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

Profitability of Siemens Healthineers (SHL.DE)

Company has a positive net income?

Net income is the total profit of a company after all expenses and taxes have been deducted. It is crucial as it reflects a company's profitability.

Historical Net Income of Siemens Healthineers (SHL.DE)

Siemens Healthineers (SHL.DE) posted a net income of €1,509,000,000 in 2023, which is indeed positive, adding 1 point in the Piotroski analysis. Despite a decrease from the 2022 net income of €2,038,000,000, the net income has consistently been positive over the past nine years, underlining the company's stable profitability trend.

Company has a positive cash flow?

This criterion involves evaluating the company's cash flow from operations (CFO), essential for understanding its ability to generate sufficient cash to maintain and grow operations. A positive CFO signals healthier liquidity and typically stronger financial health.

Historical Operating Cash Flow of Siemens Healthineers (SHL.DE)

For Siemens Healthineers (SHL.DE), the CFO for 2023 is positively reported at €2.119 billion. Over the last nine years, Siemens Healthineers has shown robust CFO figures, with recent years like 2021 boasting figures as high as €2.933 billion. This sustained positive trend in CFO is highly favorable, indicating solid operational efficiency and liquidity. As the cash flow is positive, we add 1 point for this criterion. The overall positive trend strengthens the trust in management's operational competence and the company's intrinsic strength. Hence, this criterion is deemed good.

Return on Assets (ROA) are growing?

Return on Assets (ROA) measures a company's profitability relative to its total assets. A rising ROA indicates more efficient use of assets.

Historical change in Return on Assets (ROA) of Siemens Healthineers (SHL.DE)

For Siemens Healthineers (SHL.DE), the ROA decreased from 0.0447 in 2022 to 0.0315 in 2023. This represents a decline in the company's ability to generate profit from its assets. This downward trend is concerning, particularly when juxtaposed against the Industry Median ROA, which has observed a slight fluctuation but generally remains above 0.46. The company's operating cash flow has also seen a decline from €2.5 billion in 2022 to €2.1 billion in 2023, hinting at broader operational challenges. Hence, for this criterion, the score is 0.

Operating Cashflow are higher than Netincome?

Operating Cash Flow higher than Net Income is a sign of quality earnings and efficient cash management.

Historical accruals of Siemens Healthineers (SHL.DE)

For 2023, Siemens Healthineers reported an Operating Cash Flow of €2.119 billion and a Net Income of €1.509 billion. Since the Operating Cash Flow is higher than Net Income, this is a positive indicator and adds 1 point to the Piotroski Score. This trend indicates that the company is effectively converting its earnings into cash, which is a sign of robust financial health. Historically, the Operating Cash Flow for Siemens Healthineers has shown a consistent pattern with fluctuations, peaking in 2021 at €2.933 billion before declining slightly in recent years. Conversely, Net Income has shown a slightly more volatile trend with a peak in 2022. Both metrics having higher peaks reflect the company's operational strength, bolstering investor confidence in the company's financial management.

Liquidity of Siemens Healthineers (SHL.DE)

Leverage is declining?

The 'Change in Leverage' criterion evaluates whether the company's use of debt relative to its equity has decreased, suggesting more financial stability.

Historical leverage of Siemens Healthineers (SHL.DE)

For 2022, Siemens Healthineers had a leverage of 0.0094, which slightly decreased to 0.0093 in 2023. This marginal decrease in leverage indicates an improvement in the company's financial stability. Historically, the leverage ratio has shown fluctuations with particularly high values in 2016 (0.2606) and 2017 (0.2528). However, the recent trend of reduced leverage in the past few years is favorable for the company. Therefore, for 2023, this criterion would add 1 point to the Piotroski score. This trend reflects prudent financial management amid potentially volatile markets.

Current Ratio is growing?

The Current Ratio measures a company's ability to cover its short-term liabilities with its short-term assets. It indicates liquidity.

Historical Current Ratio of Siemens Healthineers (SHL.DE)

The Current Ratio for Siemens Healthineers decreased from 1.1127 in 2022 to 1.0518 in 2023. The lower Current Ratio means the company's short-term liquidity slightly worsened. Compared to the industry median of 2.3682 in 2023, Siemens Healthineers is below the industry norm. This trend is not good for liquidity, and thus it scores 0 points for the Piotroski criterion.

Number of shares not diluted?

Change in shares outstanding refers to the difference in a company's shares available in the market. It's crucial as dilution impacts per-share metrics.

Historical outstanding shares of Siemens Healthineers (SHL.DE)

The outstanding shares for Siemens Healthineers decreased from 1,122,794,000 in 2022 to 1,119,472,000 in 2023. This 0.28% decrease in shares is a positive indicator, suggesting the company may have executed share buybacks, reducing dilution. Over the last 20 years, the company's outstanding shares have varied but trending higher in recent years until this recent decrease. Hence, for this year, we add 1 point.

Operating of Siemens Healthineers (SHL.DE)

Cross Margin is growing?

Gross Margin evaluates a company's financial health by revealing the percentage of revenue exceeding the production costs. It indicates how efficiently the company is producing its goods.

Historical gross margin of Siemens Healthineers (SHL.DE)

For Siemens Healthineers, the Gross Margin decreased from 0.3747 in 2022 to 0.3556 in 2023. This decline reflects a less effective cost management or higher production costs relative to sales. In the broader context of its historical performance since 2015, Siemens Healthineers has witnessed a fluctuating Gross Margin, peaking at 0.4177 in 2017 and then gradually declining. Comparatively, the industry median Gross Margin from 2015 to 2023 shows higher margins, consistently hovering around 0.46 to 0.50, with a similar decline in 2023 to 0.504. This consistent underperformance relative to industry peers signals that Siemens Healthineers needs to revisit its pricing strategy or cost structures to enhance profitability. Hence, this criterion gets a score of 0.

Asset Turnover Ratio is growing?

The asset turnover ratio measures how efficiently a company uses its assets to generate sales. A higher ratio indicates better performance.

Historical asset turnover ratio of Siemens Healthineers (SHL.DE)

In 2023, Siemens Healthineers (SHL.DE) reported an Asset Turnover of 0.4529, lower than the 2022 figure of 0.4761. Over the last 20 years, the lowest Asset Turnover was reported in 2023, showing a consistent decline since 2019. This year's decrease suggests reduced efficiency in utilizing assets to generate revenue. Therefore, for the Piotroski score, we assign this criterion a score of 0. Continual monitoring and potential structural adjustments may be necessary to bolster these figures.


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