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Last update on 2024-06-06

Bio-Techne (TECH) - Piotroski F-Score Analysis for Year 2023 (Final Score: 3/9)

Detailed Piotroski F-Score analysis of Bio-Techne (TECH) for 2023. Discover criteria impacts on profitability, liquidity, and operational 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: 3

We're running Bio-Techne (TECH) 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?
1
Number of shares not diluted?
0
Cross Margin is growing?
0
Asset Turnover Ratio is growing?
0

The Piotroski F-Score is a rating between 0 and 9 that evaluates a company's financial stability using 9 criteria. Bio-Techne (TECH) was analyzed and scored a 3, which indicates a relatively weak financial position. Positive points were earned for profitability, consistent cash flow, and increasing current ratio. However, the company scored 0 on criteria like return on assets, operating cash flow exceeding net income, declining leverage, shares not diluted, growing gross margin, and asset turnover ratio. TECH's leverage and outstanding shares both increased, while profitability metrics such as ROA and gross margin declined.

Insights for Value Investors Seeking Stable Income

Based on the Piotroski F-Score analysis, Bio-Techne (TECH) might not be a great investment at the moment. The weak score of 3 suggests there are better options out there with stronger financial health. While the company is profitable and has a strong current ratio, other areas such as leverage, gross margin, and asset turnover are concerning. If you're a risk-averse investor, it may be worth revisiting this stock once its financial metrics show more consistent improvement.

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

Profitability of Bio-Techne (TECH)

Company has a positive net income?

Net income examines the company's overall profitability and determines whether it generates sufficient income to cover its expenses.

Historical Net Income of Bio-Techne (TECH)

Bio-Techne's net income for 2023 was a positive $285.26 million. Analyzing the historical data, we observe a consistent trend of profitability over the past two decades, with particularly strong figures in the recent years: $272.05 million in 2021 and $285.26 million in 2023. This positive net income affirms that the company has sustained its ability to generate profit, showcasing robust financial health. As per Piotroski's criteria, this earns Bio-Techne 1 point, indicating effective profitability management and signaling to investors the company's solid earnings stability over time.

Company has a positive cash flow?

Cash Flow from Operations (CFO) is a measure of the cash generated by a company's regular operating activities. Positive CFO is important as it indicates that a company has sufficient capital to sustain and grow its operations.

Historical Operating Cash Flow of Bio-Techne (TECH)

For the fiscal year 2023, Bio-Techne (TECH) reported a CFO of $254,393,000. This figure is positive, which signals good performance on this front. Analyzing historical data, we see that Bio-Techne has consistently reported positive CFO over the last 20 years. The lowest CFO recorded was in 2003 at $54,088,895, and the highest was in 2021 at $352,164,000. This long-term trend of positive cash flows further reinforces Bio-Techne's operational efficiency and financial health, earning it 1 point in this criterion.

Return on Assets (ROA) are growing?

Change in ROA denotes whether the company's efficiency in using its assets to generate earnings is improving or diverging. It's crucial for assessing managerial effectiveness.

Historical change in Return on Assets (ROA) of Bio-Techne (TECH)

When comparing the ROA of 0.1156 in 2023 with 0.1194 in 2022, Bio-Techne's ROA has unfortunately decreased. Thus, no point is added for an increase in ROA, setting it at 0. This trend is disadvantageous as an elevating ROA suggests better utilization of the company's assets in generating income, which is paramount for stakeholder confidence. Despite this, it's worth appreciating historically whether the company's ROA has most often hovered close to the industry median.

Operating Cashflow are higher than Netincome?

This criterion assesses if the company's operating cash flow is greater than its net income, indicating high-quality earnings.

Historical accruals of Bio-Techne (TECH)

For the fiscal year 2023, Bio-Techne (TECH) reported an Operating Cash Flow of $254,393,000, which is lower than its Net Income of $285,263,000. As a result, this criterion scores 0 points. Historically, the company has had fluctuating operating cash flows, but 2023 stands out as a year where net income significantly outpaced cash flow from operations. This could signal potential issues with earnings quality or heavy working capital requirements, which may deserve closer scrutiny by investors.

Liquidity of Bio-Techne (TECH)

Leverage is declining?

Assessing changes in leverage ratios reveals a company's reliance on debt to finance operations. Lower leverage suggests stronger financial health.

Historical leverage of Bio-Techne (TECH)

Bio-Techne's leverage has increased from 0.1314 in 2022 to 0.1682 in 2023, marking an increased reliance on debt financing. Over 20 years, leverage has shown fluctuations, but this rise is significant after a period of decline. Despite its historical low leverage, the recent uptick points to potentially growing financial risk. No point is awarded here, reflecting a less favorable trend.

Current Ratio is growing?

The Current Ratio reflects a company's ability to pay off its short-term liabilities with its short-term assets. A higher ratio indicates better liquidity and financial health.

Historical Current Ratio of Bio-Techne (TECH)

In 2023, Bio-Techne (TECH) reported a Current Ratio of 4.8361, up from 3.4403 in 2022. This increase signifies improved liquidity and a stronger ability to cover short-term liabilities, making it a favorable shift for the company. Historically, TECH's Current Ratio has fluctuated, with significant peaks in 2008 (16.4573) and a low point in 2017 (2.568). Compared to the industry median of 5.7831 in 2023, while TECH's ratio is slightly lower, the upward trend is positive, especially considering the industry's varying medians. Consequently, TECH earns 1 point for this criterion.

Number of shares not diluted?

Analyzing the change in outstanding shares indicates whether the company is diluting shareholder value or maintaining it.

Historical outstanding shares of Bio-Techne (TECH)

For 2022, Bio-Techne (TECH) had 156,874,000 outstanding shares, which increased to 157,179,000 in 2023. This change represents a growth in outstanding shares, albeit a slight one. This increase in shares might be perceived negatively as it dilutes shareholder value, assuming the additional shares were not used to finance profitable growth. Historical data underscores that Tech has fluctuated in its share count over the years, often maintaining or slightly increasing it. This consistency suggests a cautious approach to equity financing. While the firm's current increase may not be drastic, it doesn't align with the Piotroski criteria of value preservation, earning it a score of 0 for this criterion.

Operating of Bio-Techne (TECH)

Cross Margin is growing?

Gross Margin is a company's revenue divided by its sales, representing the proportion of money left after accounting for the cost of goods sold. Analyzing trends in gross margin offers insights into a company's operational efficiency and pricing strategy, which are critical for sustaining profitability.

Historical gross margin of Bio-Techne (TECH)

Bio-Techne's (TECH) gross margin slightly decreased from 0.6842 in 2022 to 0.6772 in 2023. This signifies a contraction in operational efficiency, prioritizing cost management to safeguard profitability. Looking at the 20-year historical data, TECH has consistently outperformed the industry median, even with the recent drop. Recognition of these trends highlights TECH's resilience despite market flux. Therefore, according to the Piotroski criterion, TECH does not secure a point for this year given the reduction in gross margin.

Asset Turnover Ratio is growing?

The criterion evaluates whether the company's efficiency in using its assets to generate sales has improved.

Historical asset turnover ratio of Bio-Techne (TECH)

The Asset Turnover for Bio-Techne (TECH) decreased from 0.4851 in 2022 to 0.4608 in 2023, reflecting a decline in efficiency. Over the past 20 years, the company’s Asset Turnover ratio has exhibited fluctuations, with the highest ratio observed in 2006 at 0.6087 and a significant dip in 2020 at 0.3777. Given this historical perspective, the current year's performance exhibits a worrying trend, as the company appears to struggle in optimizing its asset usage, following the broader declining trend observed in recent years.


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