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Last update on 2024-06-07

Steven Madden (SHOO) - Piotroski F-Score Analysis for Year 2023 (Final Score: 5/9)

Analysis of Steven Madden's (SHOO) Piotroski F-Score for 2023: Achieving a 5/9, showcasing detailed insights into profitability, liquidity, 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: 5

We're running Steven Madden (SHOO) 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?
1
Asset Turnover Ratio is growing?
0

The Piotroski F-Score is a measure from 0 to 9 that gauges the financial strength of a company, based on 9 criteria involving profitability, liquidity, and leverage. Steven Madden (SHOO) has a Piotroski score of 5. Profitability: The company is profitable, showing a positive net income and positive cash flow from operations. However, the return on assets (ROA) has decreased. Liquidity: Steven Madden's leverage ratio has increased, though its current ratio remains strong despite a decrease. There is an unclear situation with the number of shares as data indicates inconsistency. Operating Efficiency: The Gross Margin is increasing, but the Asset Turnover Ratio has decreased.

Insights for Value Investors Seeking Stable Income

Given a Piotroski score of 5, Steven Madden (SHOO) presents a mixed financial picture. The company shows strength in profitability and has robust liquidity relative to the industry. However, there are concerns regarding leverage and the decrease in return on assets and asset turnover ratio. Potential investors should look into these aspects further to understand the risks associated with financial leverage and operational efficiency. Overall, Steven Madden is worth considering but requires deeper analysis of certain financial parameters before making an 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 Steven Madden (SHOO)

Company has a positive net income?

Net income is the total profit of a company after all expenses. Positive net income shows profitability.

Historical Net Income of Steven Madden (SHOO)

In 2023, Steven Madden (SHOO) reported a positive net income of $171,554,000. This is an essential metric indicating that the company is profitable. Observing the net income over the last 20 years, we can see a consistent upward trend with only minor fluctuations and a temporary decline in 2020 due to the pandemic, where net income was -$18,397,000. The rebound to $216,061,000 in 2021 and maintaining profitability in 2023 highlights the company's financial resilience. Therefore, Steven Madden receives 1 point for this criterion.

Company has a positive cash flow?

Cash Flow from Operations (CFO) indicates whether a company has sufficient inflow of cash to maintain or grow operations. This metric is crucial for understanding the company’s liquidity position.

Historical Operating Cash Flow of Steven Madden (SHOO)

Steven Madden (SHOO) recorded a positive CFO of $229,237,000 in 2023. This is good for the company and earns it 1 point in Piotroski's score. Reviewing the historical cash flow data, Madden consistently generated positive CFO over the last two decades. This reliability underscores the firm's stable financial health and operational efficiency. The highest CFO record was in 2020 with $267,883,000, while the lowest was in 2003 with $7,903,000. Such steady cash flow indicates prudent financial management.

Return on Assets (ROA) are growing?

The change in ROA criterion focuses on the company's ability to gain more profitability from its assets year over year. An increase in ROA implies that the company is becoming more efficient at generating profit from its assets.

Historical change in Return on Assets (ROA) of Steven Madden (SHOO)

Steven Madden (SHOO) has a decrease in ROA from 0.1653 in 2022 to 0.1317 in 2023, which indicates a less efficient use of its assets to generate profit. When examining the larger trend over 20 years, the company's highest ROA was considerably ahead of current numbers. Furthermore, when juxtaposed against the industry median, Steven Madden’s ROA has underperformed consistently, except for some exceptions. Therefore Steven Madden gets 0 points for this criterion. This trend is not favorable and signifies a need for focus on enhancing asset utilization efficiency.

Operating Cashflow are higher than Netincome?

This criterion examines if the company's operating cash flow is higher than its net income. It is crucial because it signifies the quality and sustainability of earnings.

Historical accruals of Steven Madden (SHOO)

For Steven Madden (SHOO) in 2023, the operating cash flow is $229,237,000, while the net income is $171,554,000. This indicates that the operating cash flow exceeds net income, thereby adding 1 point according to the Piotroski F-Score criteria. Analyzing the last 20 years of cash flow and net income data, Steven Madden has consistently shown a pattern where operating cash flow is substantial. For instance, in 2019 the operating cash flow was $233,780,000 compared to a net income of $141,311,000. Such trends highlight efficient operational management capable of generating cash flows beyond accounting profits, a positive indicator of financial health.

Liquidity of Steven Madden (SHOO)

Leverage is declining?

This criterion evaluates the company’s change in financial leverage year-over-year.

Historical leverage of Steven Madden (SHOO)

The leverage ratio for Steven Madden (SHOO) has increased from 0.0629 in 2022 to 0.0731 in 2023. This is an unfavorable trend in the context of the Piotroski analysis, which seeks to identify companies with improving financial health. Since financial leverage has increased, indicating more debt relative to equity, no point is awarded here. This is further validated by examining historical data: leverage has shown fluctuations but the raise this year reverses previous year’s downward trend, indicating a potential rise in financial risk.

Current Ratio is growing?

The current ratio measures a company's ability to pay off its short-term liabilities with its short-term assets. It is an important indicator of liquidity and financial health.

Historical Current Ratio of Steven Madden (SHOO)

In 2023, Steven Madden's current ratio was 2.2637, which decreased from 2.6287 in 2022. This marks a worsening trend in liquidity. Over the last 20 years, Steven Madden has generally maintained a solid current ratio, although it has fluctuated and shown a general downward trend. The industry median current ratio has similarly trended downward. Despite this year's decrease, Steven Madden's current ratio is still better than the industry median of 1.9271 for 2023, suggesting that the company still maintains stronger liquidity compared to its peers.

Number of shares not diluted?

The criterion here evaluates the change in the number of outstanding shares. This factor is significant in understanding potential dilution of shares, which can affect earnings per share (EPS) and shareholder value.

Historical outstanding shares of Steven Madden (SHOO)

When comparing the outstanding shares of Steven Madden between 2022 and 2023, which show 76,021,000 in 2022 and 0 in 2023, there's an evident increase in 2023. Through last 20 years data, there is a trend showing fluctuations but consistently decreasing numbers until 2022, where it hit 76,021,000 shares. But the drastic transition to 0 in 2023 suggests potential for either major corporate restructuring or data anomaly. Given the instructions - if the Outstanding Shares had decreased, a point would've been added. However, since there's an increase (or more precisely, inconsistent contemporary data), this trend scores 0 points.

Operating of Steven Madden (SHOO)

Cross Margin is growing?

Gross Margin indicates the proportion of revenue that exceeds the cost of goods sold, and it is crucial for understanding the efficiency and profitability of a company's core business.

Historical gross margin of Steven Madden (SHOO)

Steven Madden's Gross Margin has increased from 0.4118 in 2022 to 0.4201 in 2023. This is a positive trend, hence earning 1 point. Over the last 20 years, Steven Madden's Gross Margin trends show relative stability with occasional fluctuations, often trailing the industry median. However, with a consistent upward trend recently, the company's performance reflects an improved level of efficiency and profitability despite challenging market conditions.

Asset Turnover Ratio is growing?

Asset turnover is a financial ratio that measures the efficiency of a company in using its assets to generate sales. A higher ratio indicates better performance.

Historical asset turnover ratio of Steven Madden (SHOO)

In 2023, Steven Madden reported an asset turnover ratio of 1.5208, compared to 1.6239 in 2022. This represents a decrease in asset turnover. Therefore, Steven Madden earns 0 points for this criterion based on the Piotroski Analysis. This slight dip in efficiency is a concern, but it aligns with variations seen over the years. It's worth noting that Steven Madden is still performing relatively well as compared to the lows observed during 2020 (0.9947) due to the disruptions caused by the pandemic.


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