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Teleflex (TFX) - Piotroski F-Score Analysis for Year 2023 (Final Score: 6/9)

Piotroski F-Score analysis of Teleflex (TFX) for 2023: Final Score is 6/9. Learn about the company's financial health through profitability, liquidity, and more.

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: 6

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

The Piotroski F-Score is a scale from 0 to 9 that evaluates how strong a company's financial standing is. It focuses on areas such as profitability, liquidity, and leverage using 9 different criteria. Teleflex (TFX) has a score of 6. This means the company is above average in terms of financial health.

Insights for Value Investors Seeking Stable Income

Given the Piotroski F-Score of 6, Teleflex (TFX) seems to be a relatively strong and potentially undervalued company. However, some areas like the Current Ratio and leverage need attention. An investor might find it worthwhile to investigate this stock further, considering both its strengths and areas needing improvement.

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

Profitability of Teleflex (TFX)

Company has a positive net income?

Examine if the net income is positive. This reveals profitability, a fundamental indicator of financial health.

Historical Net Income of Teleflex (TFX)

The net income of $356,328,000 for Teleflex in 2023 is positive, thereby adding 1 point according to the Piotroski criteria. Analyzing the historical net income trend for the last 20 years, Teleflex has shown resilience by maintaining positive net income for 19 out of 21 years. This solid financial performance underscores a stable and profitable operation over two decades. Such consistent profitability is a favorable sign for long-term investors, thus reflecting positively upon the company’s fundamental health.

Company has a positive cash flow?

Evaluate if Teleflex's Cash Flow from Operations (CFO) is positive or negative. Positive CFO is a sign of strong financial health.

Historical Operating Cash Flow of Teleflex (TFX)

In 2023, Teleflex's CFO stands at $510,638,000, which is decidedly positive. Over the past 20 years, while the CFO has seen fluctuations, there is a discernible upward trend with occasional dips. For example, the CFO plummeted to negative territory in 2008 at $171,169,000 amid the global financial crisis but rebounded robustly in the following years. Recent years have shown a significant uptrend from $342,141,000 in 2022 to $510,638,000 in 2023. This positive trend reflects Teleflex's strong operational efficiency and its ability to generate ample cash flow from core operating activities, earning it the full point on this Piotroski criterion.

Return on Assets (ROA) are growing?

Explain the criterion for Teleflex (TFX) and why it is important to consider

Historical change in Return on Assets (ROA) of Teleflex (TFX)

Change in Return on Assets (ROA) measures how efficiently a company utilizes its assets to generate profit. In the Piotroski Analysis, if ROA has increased from the previous year, it signifies that the company is improving in converting its investments into earnings, thereby adding 1 point in the analysis. If the ROA decreased, it scores zero points.

Operating Cashflow are higher than Netincome?

Firms with higher operating cash flow than net income are considered more financially stable and efficient.

Historical accruals of Teleflex (TFX)

For the year 2023, Teleflex (TFX) reported an operating cash flow of $510.64 million compared to a net income of $356.33 million. The operating cash flow surpasses the net income, reflecting positively on the company's ability to generate cash from its operations. This is a strong indicator of financial health and operational efficiency, as it suggests that Teleflex is capable of converting its net income into actual cash. Coupled with a substantial increase from the previous year's operating cash flow, this trend is favorable and suggests robust financial management. As a result, Teleflex earns 1 point based on this criterion.

Liquidity of Teleflex (TFX)

Leverage is declining?

Change in Leverage compares the current levels of financial leverage to the previous year's level to assess the company's debt management.

Historical leverage of Teleflex (TFX)

In 2023, Teleflex (TFX)’s leverage ratio stood at 0.2441, up from 0.2518 in 2022. This marginal increase in leverage means that Teleflex has slightly higher debt levels relative to its equity compared to last year. This transition led to zero points for this criterion in the Piotroski analysis. Historically, the leverage observed over the past two decades has varied noticeably, peaking at 0.3661 in 2008 and reaching a minimum of 0.1089 in 2003. While this trend hasn't spelled significant trouble recently, the consistency of such evaluations can be vital for continuoActive Monitoringus assessment.

Current Ratio is growing?

The Current Ratio is a liquidity ratio that measures a company's ability to cover its short-term liabilities with its short-term assets. A ratio above 1 indicates that the company has more assets than liabilities, which is a positive sign of financial health. It is crucial for assessing the company’s short-term solvency and overall financial stability.

Historical Current Ratio of Teleflex (TFX)

Teleflex's Current Ratio for 2023 is 2.3196, compared to 2.4265 in 2022. This represents a slight decrease, resulting in a score of 0 points for this criterion. A declining Current Ratio may indicate that the company is becoming less capable of covering its current liabilities with its current assets, potentially pointing toward liquidity issues. However, it's important to note that Teleflex's Current Ratio is close to the Industry Median ratio of 2.3418, which shows it is in a competitive position within its market.

Number of shares not diluted?

This criterion examines the trend in the number of outstanding shares, providing insights into potential dilution and shareholder value considerations.

Historical outstanding shares of Teleflex (TFX)

The Outstanding Shares for Teleflex (TFX) have increased from 46,898,000 in 2022 to 46,981,000 in 2023. Hence, the company will receive 0 points for this criterion according to Piotroski’s scoring method. An increase in outstanding shares typically indicates a potential dilution of shareholder value as more shares are introduced into the market. Examining the broader trend over the past 20 years, Teleflex has shown occasional increments and decrements in the number of outstanding shares. For instance, in 2015, the outstanding shares were 48,058,000, after which there were efforts to reduce the shares, reaching 46,200,000 in 2019. However, the more recent trend from 2020 onwards shows a slight but consistent increase, reflecting perhaps new issuances or stock-based compensation. Compared to 2022, the incremental increase may not be significant in dilution effects, but continuous monitoring of this trend is essential.

Operating of Teleflex (TFX)

Cross Margin is growing?

Gross Margin is a measure of a company's financial health and business model, specifically the percentage of revenue that exceeds the cost of goods sold.

Historical gross margin of Teleflex (TFX)

For Teleflex (TFX), the Gross Margin has increased from 0.5486 in 2022 to 0.5537 in 2023, resulting in an increase of 0.0051. This shows a positive trend, adding 1 point to the Piotroski Score. This trend is promising as it also aligns with Teleflex consistently outperforming the industry median Gross Margin over the past two decades. The latest industry median is 0.5549 for 2023, and the company's figure being marginally close underscores its relative performance.

Asset Turnover Ratio is growing?

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

Historical asset turnover ratio of Teleflex (TFX)

In 2023, Teleflex's Asset Turnover ratio was 0.4114, up from 0.4045 in 2022. This increase, albeit modest, signifies that Teleflex has improved its efficiency in utilizing its assets to generate revenue. Historically, the company's Asset Turnover has shown fluctuations, peaking in 2003 at 1.1633 and experiencing a general downward trend. The ratio's increase in 2023 earns it 1 point under the Piotroski F-Score, reflecting a positive momentum in asset efficiency.


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