SYM.F 23.2 (-0.85%)
US6687711084SoftwareSoftware - Infrastructure

Last update on 2024-06-06

Gen Digital (SYM.F) - Piotroski F-Score Analysis for Year 2023 (Final Score: 2/9)

Gen Digital (SYM.F) Piotroski F-Score for 2023: A detailed analysis of profitability, liquidity, and operational efficiency with a final score of 2/9.

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: 2

We're running Gen Digital (SYM.F) 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?
0
Leverage is declining?
0
Current Ratio is growing?
0
Number of shares not diluted?
0
Cross Margin is growing?
0
Asset Turnover Ratio is growing?
0

The Piotroski F-Score for Gen Digital (SYM.F) is 2 out of 9. This score indicates that the company has some significant areas of concern regarding profitability, liquidity, and operating efficiency. Positive factors include positive net income and positive cash flow from operations. However, challenges include declining ROA, leverage increasing, reduced current ratio, higher share dilution, declining gross margin, and decreasing asset turnover ratio. If you're looking for a strong investment, this score suggests that there are many risk factors to consider with Gen Digital.

Insights for Value Investors Seeking Stable Income

Based on the Piotroski F-Score analysis, it might be wise to be cautious about investing in Gen Digital (SYM.F). The score of 2 out of 9 indicates significant financial challenges and risks. It would be better to look for companies with higher scores that indicate stronger financial positions and more consistent operational performances. This doesn't mean Gen Digital can't be a good investment, but it requires thorough further analysis and possibly a tolerance for higher risk.

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

Profitability of Gen Digital (SYM.F)

Company has a positive net income?

Net income assesses a company's profitability over a period. Positive net income indicates profitability, while negative indicates losses.

Historical Net Income of Gen Digital (SYM.F)

For Gen Digital (SYM.F), the net income for the year 2023 is $1,349,000,000, which is positive. This is a favorable indicator, reflecting a strong profit. Analyzing data from the past 20 years, Gen Digital has experienced fluctuations in net income, with periods of both positive and negative values. Notably, in recent years, there has been an upward trajectory in profitability since 2018, culminating in the significant profit reported in 2023. Hence, based on the Piotroski analysis, 1 point is awarded for positive net income.

Company has a positive cash flow?

The Cash Flow from Operations (CFO) criterion examines whether a company can generate cash from its core business activities, instead of relying on external financing or other sources. This is crucial for assessing the company's operational efficiency and financial health.

Historical Operating Cash Flow of Gen Digital (SYM.F)

The Cash Flow from Operations (CFO) for Gen Digital (SYM.F) in 2023 is reported at $757 million. This is a positive figure, signaling that the company is generating sufficient cash from its core business operations. Over the last 20 years, Gen Digital has seen fluctuations in their CFO, with some years such as 2004 (-$15.22 million) and 2019 (-$861 million) reporting negative values. However, it's notable that in recent years, the trend has been predominantly positive, with CFO values at $706 million in 2021 and $974 million in 2022. Therefore, with a positive CFO in 2023, Gen Digital earns 1 point for this criterion, indicating strong operational performance.

Return on Assets (ROA) are growing?

Examine the change in Return on Assets (ROA). This indicator reveals the effectiveness of a company's use of its assets to generate earnings.

Historical change in Return on Assets (ROA) of Gen Digital (SYM.F)

In 2022, Gen Digital (SYM.F) had an ROA of 0.1257, which slightly declined to 0.1179 in 2023. This decrease results in a score of 0 for this criterion. Despite the current trend, it's crucial to note that Gen Digital's ROA over the past 20 years generally lags behind the industry median. This trend is not favorable, as it suggests the company might be underutilizing its assets compared to its peers.

Operating Cashflow are higher than Netincome?

This criterion assesses whether a company's operating cash flow consistently exceeds net income. A stable operating cash flow higher than net income suggests effective earnings quality as the company generates enough cash to support its earnings.

Historical accruals of Gen Digital (SYM.F)

For Gen Digital (SYM.F) in 2023, the operating cash flow is $757,000,000 while the net income is $1,349,000,000. In this case, the operating cash flow is lower than the net income. Therefore, no point is added according to this criterion. This could indicate that some of the company's earnings may be of lower quality, dependent on accounting accruals rather than actual cash generation. Reviewing historical data over the last 20 years, the operating cash flow has seen significant fluctuations. In some years, like 2005 ($1,207,459,000) and 2019 ($1,495,000,000), it significantly surpassed net income. However, in other years, such as 2020 (-$861,000,000, operating cash flow was negative, indicating underlying issues. For 2023, the current trend where net income surpasses the operating cash flow could raise concerns regarding the sustainability of reported earnings or the presence of non-cash earnings in the financial statement. Therefore, in the context of Piotroski Analysis, this trend does not favorably strengthen the company's financial robustness.

Liquidity of Gen Digital (SYM.F)

Leverage is declining?

Change in Leverage is crucial because it indicates a company's dependency on debt financing. Lower leverage often suggests better financial health.

Historical leverage of Gen Digital (SYM.F)

In 2022, Gen Digital (SYM.F) had a leverage of 0.4049, which increased to 0.5995 in 2023. This rise in leverage from 0.4049 to 0.5995 indicates a deteriorating financial health as the company is more dependent on debt financing. Over the past 20 years, the leverage trend has been erratic, peaking recently. This trend presents a cautionary signal to investors, reflecting lower financial stability.

Current Ratio is growing?

The Current Ratio measures a company's ability to meet short-term obligations with its current assets. A higher ratio indicates better liquidity.

Historical Current Ratio of Gen Digital (SYM.F)

The Current Ratio for Gen Digital (SYM.F) decreased from 0.7374 in 2022 to 0.4328 in 2023. This represents a significant decline and is a worrying trend. It indicates that the company's ability to cover short-term liabilities with current assets has weakened. The historical data also shows a steady decline in the company's Current Ratio over the past two decades, going from levels above 2.0 in the early 2000s to well below 1.0 in recent years. In contrast, the industry median current ratio has remained more stable and consistently higher than that of SYM.F. These numbers demonstrate that SYM.F's liquidity situation is currently under more pressure compared to its industry peers.

Number of shares not diluted?

This criterion assesses changes in the number of shares outstanding for Gen Digital (SYM.F). An increase in outstanding shares can dilute existing shares; a decrease signifies buybacks.

Historical outstanding shares of Gen Digital (SYM.F)

In 2022, Gen Digital had 581,000,000 shares outstanding, which increased to 614,000,000 in 2023. This represents an increase of approximately 5.7%. In the context of Piotroski's analysis, where a decrease in shares outstanding is seen as a positive signal indicating that the company is buying back shares (potentially a sign of confidence by management), this increase in 2023 does not meet the positive criterion and would result in a score of 0.

Operating of Gen Digital (SYM.F)

Cross Margin is growing?

Gross Margin reflects a company's pricing strategy, its ability to control production costs, and overall operational efficiency. An increase in Gross Margin traditionally points to healthier profit margins and better performance relative to competitors.

Historical gross margin of Gen Digital (SYM.F)

The Gross Margin for Gen Digital (SYM.F) decreased from 0.8541 in 2022 to 0.8235 in 2023. This decline suggests some pressures on profitability, which could be due too increased production costs, pricing competition, or other operational challenges. Comparing to the industry median Gross Margin of 0.715 in 2023, although the company’s margin remains higher than the industry median, the decrease is a concern and points to potential areas in operations that may require attention. Over the past decade, Gen Digital's Gross Margin has shown periods of both stability and fluctuation. For instance, it was as low as 0.1087 in 2014 but spiked to 0.8422 in 2020. Despite this year’s decline, the present margin is significantly above its lows and is relatively consistent with the past high margins in recent years.The scoring for this criteria would therefore be set to 0.

Asset Turnover Ratio is growing?

Change in Asset Turnover is a measure of how efficiently a company uses its assets to generate revenue. It is important because a higher turnover ratio indicates better utilization of assets.

Historical asset turnover ratio of Gen Digital (SYM.F)

For Gen Digital (SYM.F), the asset turnover decreased from 0.4203 in 2022 to 0.2917 in 2023, reflecting a reduction in efficiency. This decline signals a reduced ability to generate revenue from its assets. Historical data over the last 20 years shows fluctuations, with a notable high of 2.3517 in 2003 and a low of 0.1444 in 2006. The downward trend in recent years suggests challenges in asset utilization. Therefore, the Asset Turnover does not add a point to the Piotroski F-Score in 2023.


Obligatory risk notice

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