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Stellantis (STLA) - Piotroski F-Score Analysis for Year 2023 (Final Score: 7/9)

Detailed Piotroski F-Score analysis of Stellantis (STLA) for the year 2023. Evaluate profitability, liquidity, and operating efficiency with a final score of 7/9.

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: 7

We're running Stellantis (STLA) 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?
0
Number of shares not diluted?
1
Cross Margin is growing?
1
Asset Turnover Ratio is growing?
0

Stellantis (STLA) was evaluated based on the Piotroski F-Score, a model that helps assess a company's financial health. Stellantis scored a 7 out of 9, indicating a relatively strong financial position. + Profitability: The company has a positive net income of $18.596 billion in 2023 and strong positive cash flow from operations. The Return on Assets (ROA) has also grown slightly, highlighting improved asset efficiency. + Liquidity: Stellantis shows a declining leverage ratio, indicating reduced dependency on debt. However, the current ratio, which measures the company's capability to cover short-term liabilities, slightly decreased. + Operating Efficiency: The number of outstanding shares has decreased, pointing to potential stock buybacks. The Gross Margin, which indicates production efficiency, has improved, while the Asset Turnover ratio has declined slightly, showing a minor decrease in asset utilization efficiency.

Insights for Value Investors Seeking Stable Income

Stellantis (STLA) exhibits a strong financial position based on the Piotroski F-Score, scoring 7 out of 9. The company shows positive trends in profitability, cash flow, and reduced leverage, making it a potentially good investment. However, there are some areas for improvement, such as the current ratio and asset turnover. Given its strong financial health and efficiency in several key areas, Stellantis seems to be a promising stock to consider. Nonetheless, potential investors should also closely monitor its liquidity management and asset utilization efficiency going forward. Overall, Stellantis is worth exploring further for investment opportunities.

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

Profitability of Stellantis (STLA)

Company has a positive net income?

Positive net income is critical as it indicates profitability and efficient cost management.

Historical Net Income of Stellantis (STLA)

For Stellantis, the net income of $18.596 billion in 2023 is significantly positive. Over the last 20 years, the company’s performance has been mixed, showing negative values in the early 2000s but steadily improving since 2009. The upward trend in recent years, culminating in the highest net income recorded in 2023, is a robust indicator of the company’s strong financial health and management effectiveness. Thus, for the Piotroski analysis, Stellantis earns 1 point in this criterion.

Company has a positive cash flow?

Cash Flow from Operations (CFO) indicates the cash generated by a company’s regular business operations.

Historical Operating Cash Flow of Stellantis (STLA)

For 2023, Stellantis (STLA) reported a CFO of $22,485,000,000, signifying a strong positive cash flow. This positive trend is indicative of efficient core business operations. Historically, Stellantis has shown a significant improvement in its CFO over the years, starting from a negative value in 2003 to consistent positive values in recent years. Particularly notable is the leap from $19,959,000,000 in 2022 to $22,485,000,000 in 2023, reflecting a robust growth trajectory. Therefore, Stellantis earns 1 point for this criterion. This improvement in CFO strengthens the financial stability and provides funds for future investments enhancing shareholders' value.

Return on Assets (ROA) are growing?

Return on Assets (ROA) measures how effectively a company is using its assets to generate earnings. An increasing ROA indicates improved efficiency.

Historical change in Return on Assets (ROA) of Stellantis (STLA)

Stellantis (STLA) reported an ROA of 0.0958 in 2023 compared to 0.0939 in 2022. This marks a slight but notable improvement in its asset efficiency, garnering it an additional point under the Piotroski F-Score. While this upward trend is inherently positive, it's crucial to contextualize this figure against longer historical data and industry benchmarks. Over the past 20 years, Stellantis's ROA has had considerable volatility but shows an overall upward momentum in recent years, aligning with an increasing operating cash flow trend. Currently, however, Stellantis's ROA still lags behind the industry median, which stood at 0.1825 in 2023. This divergence underscores that while Stellantis is making gains, there remains significant room for enhancement to meet or surpass industry performance.

Operating Cashflow are higher than Netincome?

Operating Cash Flow higher than Net Income

Historical accruals of Stellantis (STLA)

For the fiscal year of 2023, Stellantis (STLA) reported an operating cash flow of $22,485 million compared to a net income of $18,596 million. Since the operating cash flow exceeds the net income, this scenario adds 1 point according to the Piotroski F-Score criteria. This is considered a positive indicator because it suggests that the company generates sufficient internal cash to sustain operations and growth, making it less reliant on external financing. Historical data shows a positive trend in operating cash flows, from negative values in the early 2000s to consistent positive cash flow in recent years, affirming prudent cash management.

Liquidity of Stellantis (STLA)

Leverage is declining?

Change in Leverage measures the difference in the company’s leverage ratio year-over-year and indicates financial structure changes.

Historical leverage of Stellantis (STLA)

The Leverage for Stellantis (STLA) has decreased from 0.1046 in 2022 to 0.099 in 2023. A lower leverage ratio is generally a positive sign as it indicates that the company's reliance on debt is decreasing and it could be becoming less risky for investors. This trend suggests a better financial stability. Therefore, for the Piotroski score for this criteria, Stellantis adds 1 point.

Current Ratio is growing?

The Current Ratio gauges a company's ability to pay off its short-term liabilities with its short-term assets. A higher value suggests financial stability.

Historical Current Ratio of Stellantis (STLA)

In 2023, Stellantis (STLA) has a Current Ratio of 1.2378, which presents a slight decrease from the 1.2686 figure of 2022. Therefore, for the Piotroski Score, we assign 0 points for this criterion, as the ratio did not improve. Examining a broader horizon, Stellantis’ 20-year data reveals fluctuations, with an average trend mimicking the industry's volatility. For instance, in 2009, the ratio peaked at 1.4068, declining below 1 in 2016, and gradually recovering from 2017 onward. Notably, the industry median for 2023 stands at 1.262, marginally above Stellantis' current value, indicating a slightly more conservative liquidity management in the sector. Overall, the robust trend from 2020 to 2022 suggests a renewed focus on financial prudence, even though a minor dip is experienced in 2023, reflecting possible strategic investments or market shifts.

Number of shares not diluted?

Changes in shares outstanding are important because they affect the ownership structure and can impact earnings per share calculations.

Historical outstanding shares of Stellantis (STLA)

In 2022, Stellantis had 3,140,089,000 outstanding shares, which decreased to 3,107,725,000 in 2023. This represents a reduction in the number of shares by approximately 32.4 million in one year, which could be seen as a good sign as it may indicate stock buybacks or other shareholder-friendly actions. Over the last 20 years, the trend has shown periodic increases in outstanding shares until a significant rise in 2021 followed by a slight decrease in 2023. Therefore, Stellantis earns 1 point for reducing its outstanding shares in 2023.

Operating of Stellantis (STLA)

Cross Margin is growing?

This criterion examines the year-over-year change in Gross Margin, which measures the company's production efficiency and pricing strategy effectiveness.

Historical gross margin of Stellantis (STLA)

In 2023, Stellantis reported a Gross Margin of 0.2012, an improvement from 0.1964 in 2022, signifying a positive change (+0.0048). Given this increase, Stellantis earns 1 point for Gross Margin in the Piotroski analysis. Since 2020, the company has shown above-industry-median gross margins, evidencing effective production and competitive pricing strategies, bolstering favorable market standing. Historical data reinforces this upward trend.

Asset Turnover Ratio is growing?

Asset Turnover measures a company's efficiency in using its assets to generate sales. It's calculated by dividing sales by total assets. A higher ratio is preferred.

Historical asset turnover ratio of Stellantis (STLA)

For Stellantis (STLA), the Asset Turnover ratio declined from 1.0035 in 2022 to 0.9763 in 2023. This indicates that STLA was slightly less efficient in utilizing its assets to generate sales in 2023 compared to 2022. Considering the historical data, there have been fluctuations in Asset Turnover, most notably a peak of 1.2096 in 2021 and a low of 0.5101 in 2010. The minor decline from 2022 to 2023 sets the score to 0.


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