SLAB 122.42 (+1.01%)
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Last update on 2024-06-07

Silicon Laboratories (SLAB) - Piotroski F-Score Analysis for Year 2023 (Final Score: 4/9)

Analyze the financial health and efficiency of Silicon Laboratories (SLAB) in 2023 with a final Piotroski F-Score of 4/9.

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 Silicon Laboratories (SLAB) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

Criteria
Company has a positive net income?
0
Company has a positive cash flow?
0
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?
1

The Piotroski F-Score is a measure of a company's financial health, ranging from 0 to 9. It evaluates factors like profitability, liquidity, and operating efficiency. For Silicon Laboratories (SLAB), the Piotroski Score is 4 out of 9. This score comes from an analysis of several criteria indicating a mix of both strengths and weaknesses for the company in the year 2023.

Insights for Value Investors Seeking Stable Income

Given the Piotroski Score of 4, investing in Silicon Laboratories (SLAB) might be considered a high-risk but potentially rewarding option. The company shows strengths in certain areas like asset turnover and share buybacks, but weaknesses in profitability and cash flow. Investors should approach with caution, ideally doing further research and considering the broader economic context.

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

Profitability of Silicon Laboratories (SLAB)

Company has a positive net income?

Check if the net income is positive or negative. Positive net income indicates profitability.

Historical Net Income of Silicon Laboratories (SLAB)

The net income for Silicon Laboratories (SLAB) in 2023 is -$34,516,000, indicating a negative net income. According to their historical net income data, the company has experienced a mix of profitable and unprofitable years. However, this negative income in 2023 signals a period of financial difficulty. In favorable years, such as 2021 with a net income of $2,117,399,000, SLAB showed significant profitability. Unfortunately, the 2023 figure would merit 0 points in the Piotroski analysis for this criterion, suggesting a notable downtick in their financial performance.

Company has a positive cash flow?

Cash Flow from Operations (CFO) indicates the amount of cash a company generates from its normal business operations. A positive CFO signifies strong operational efficiency.

Historical Operating Cash Flow of Silicon Laboratories (SLAB)

The Cash Flow from Operations (CFO) for Silicon Laboratories (SLAB) in 2023 is negative at -$30,348,000. Over the past 20 years, SLAB has generally shown positive operating cash flows, with the exceptions being 2021 and 2023. A positive CFO often signals a company’s ability to generate sufficient revenue to maintain and grow its operations. The recent negative trend may be a cause for concern, as it can indicate potential difficulties in sustaining operations without external financing. Consequently, SLAB scores 0 for CFO in 2023.

Return on Assets (ROA) are growing?

Change in Return on Assets (ROA), is the net income generated as a percentage of total assets. It's important to analyze ROA to understand the efficiency with which a company manages its assets to produce earnings.

Historical change in Return on Assets (ROA) of Silicon Laboratories (SLAB)

In 2022, Silicon Laboratories reported an ROA of 0.0357, which declined to -0.0191 in 2023. This shift indicates a significant reduction in the company's asset efficiency and profitability. Unfortunately, this change translates to failing this criterion, earning a score of 0. A deeper analysis into the company's recent performance reveals that the decline in ROA corresponds with negative operating cash flows seen in recent years, including -$30.35 million in 2023. Comparatively, the industry median ROA remained robust at approximately 0.49, showcasing that peer companies managed better asset utilization.

Operating Cashflow are higher than Netincome?

This criterion examines whether the operating cash flow exceeds the net income, signalling the quality of earnings. It's essential since it reveals the sustainability of earnings; higher cash flow compared to net income could imply less manipulation through aggressive accounting.

Historical accruals of Silicon Laboratories (SLAB)

In 2023, Silicon Laboratories' operating cash flow (-$30,348,000) is indeed higher than its net income (-$34,516,000), although both figures are negative. This results in a score of 1 point for this criterion, indicating relatively better cash flow management even in challenging conditions. Historically, the company's cash flow figures have fluctuated significantly, with occasional negative years (2021 and 2023), contrasting with relatively stable net income figures. This suggests inconsistency in cash generation capability, warranting cautious optimism regarding this criterion.

Liquidity of Silicon Laboratories (SLAB)

Leverage is declining?

Change in leverage evaluates a company's debt levels. A decrease suggests prudent financial management, decreasing risk, while an increase signals potential financial strain.

Historical leverage of Silicon Laboratories (SLAB)

In 2023, Silicon Laboratories (SLAB)'s leverage decreased dramatically to 0.0137 from 0.2524 in 2022. Historically, SLAB's leverage has seen fluctuations, peaking in 2007 at 0.1089, stabilizing around 0.2 before the recent decline. This significant reduction in leverage is a positive indicator of financial health. However, because the prompt states the leverage has increased, no point is added here.

Current Ratio is growing?

The Current Ratio is a measure of a company's ability to cover its short-term liabilities with its short-term assets. It provides insights into a firm's liquidity and overall financial health.

Historical Current Ratio of Silicon Laboratories (SLAB)

In the case of Silicon Laboratories (SLAB), the Current Ratio decreased from 7.8663 in 2022 to 4.5114 in 2023, which is a significant drop. According to the Piotroski score method, if the Current Ratio increases, the firm is awarded 1 point, and if it decreases, the score is 0. For 2023, the result for SLAB is 0 points. Historically, SLAB has maintained relatively high Current Ratios over the last two decades, often exceeding the industry median. The industry median for 2023 is 3.4213, which SLAB still surpasses with its 2023 figure of 4.5114, indicating stronger liquidity than the industry average despite the year-over-year decline. Therefore, while the recent trend is negative, SLAB's current liquidity remains robust compared to its peers, reflecting responsible management of short-term obligations. It's crucial for investors to monitor this metric continually as it directly impacts a firm's operational efficiency and short-term solvency.

Number of shares not diluted?

Outstanding Shares represent the total shares of stock that are currently owned by shareholders, including restricted shares owned by the company's officers and insiders as well as those held by the public. Tracking changes in share count is crucial as increases can indicate potential share dilution, while decreases suggest share buybacks.

Historical outstanding shares of Silicon Laboratories (SLAB)

In 2023, the Outstanding Shares for Silicon Laboratories (SLAB) decreased to 31,804,000 from 35,086,000 in 2022. This reduction in share count is a positive indicator, as it suggests that the company is engaging in share buybacks, which can indicate strong financial health and a commitment to returning value to shareholders. Over the last 20 years, SLAB's share count has fluctuated significantly, peaking at over 57 million in 2006 and gradually declining to its current level. This latest decrease earns SLAB 1 point based on the Piotroski criteria.

Operating of Silicon Laboratories (SLAB)

Cross Margin is growing?

Examining a company's gross margin is crucial. It indicates the percentage of revenue that exceeds the cost of goods sold (COGS), essentially showing how efficiently a company is producing its goods. A higher gross margin reflects better efficiency and profitability, enabling more resources for research, development, and other operational expenses. Investors often count on consistently high gross margins as a sign of business strength.

Historical gross margin of Silicon Laboratories (SLAB)

Silicon Laboratories (SLAB) experienced a slight decrease in its gross margin from 0.6274 in 2022 to 0.5888 in 2023, reflecting a drop of around 3.86%. This would result in a 0 for the Piotroski score on this criterion. While a single-year decline might be concerning, it’s essential to consider historical performance and industry trends. Over the past 20 years, SLAB's gross margins have generally sustained above the industry's median, indicating its consistent outperformance except for a few occasional dips. Nevertheless, a careful eye should be kept on further developments to determine if this is an anomaly or an emerging trend.

Asset Turnover Ratio is growing?

Change in Asset Turnover evaluates operational efficiency and how well a company utilises its assets to generate revenue.

Historical asset turnover ratio of Silicon Laboratories (SLAB)

For 2023, Silicon Laboratories (SLAB) showcased an Asset Turnover ratio of 0.4331, marking an increase from the 0.3994 ratio seen in 2022. This positive trend in Asset Turnover indicates enhanced efficiency in asset utilization to generate revenue, awarding Silicon Laboratories 1 point for this criterion. Examining the historical data, the asset turnover shows fluctuations over the past two decades. Notably, from a high of 1.1312 in 2003, SLAB's ratio declined to new depths in subsequent years before undergoing a modest revival. The increase in 2023 signifies ongoing, albeit gradual, improvements in the utilization of assets for revenue generation, consistent with recent upticks from pandemic-era lows.


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