Last update on 2024-06-07

TeamViewer (TMV.DE) - Piotroski F-Score Analysis for Year 2023 (Final Score: 8/9)

In-depth Piotroski F-Score Analysis of TeamViewer (TMV.DE) for 2023, achieving a strong score of 8/9 indicating solid financial health.

Short Analysis - Piotroski Score: 8

We're running TeamViewer (TMV.DE) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

The Piotroski F-Score rates a company's financial position between 0 and 9 based on profitability, liquidity, and leverage. A score of 8 indicates that TeamViewer is in good financial health and has strong investment potential. The company shows sustained profitability, consistently positive cash flow, and improving efficiency in its asset use. Its leverage is declining, indicating less reliance on debt, and its outstanding shares have decreased. However, there are concerns about its current ratio, which has shown a decline.

Insights for Value Investors Seeking Stable Income

TeamViewer's financials look robust overall, with a high Piotroski F-Score of 8, suggesting it's a potentially strong, undervalued stock worth considering. However, its declining current ratio poses some liquidity risks. As an investor, it would be wise to further investigate the reasons behind the liquidity decline and consider potential risks alongside the attractive financial strengths before making an investment decision.

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

Profitability of TeamViewer (TMV.DE)

Company has a positive net income?

Net income measures a company's profitability and is crucial for assessing financial health as positive values indicate profits.

In 2023, TeamViewer (TMV.DE) reported a net income of €114,015,000, marking an increase for the second consecutive year. Over the past eight years, the company transitioned from negative net incomes between 2016 and 2018 to consistently positive figures since 2019. This sustained profitability suggests robust financial health and management efficiency. Accordingly, TeamViewer earns 1 point for a positive net income.

Company has a positive cash flow?

This criterion assesses if the company generates positive cash flow from its core business activities, indicating operational efficiency and profitability.

TeamViewer has consistently shown positive cash flow from operations over the last eight years, steadily increasing from €78,043,000 in 2016 to €229,865,000 in 2023. This increasing CFO trend is a positive indicator of the company's operational efficiency and steady revenue generation, adding 1 point to the Piotroski Score. It reflects sound business practices and efficient management of operational activities, which is crucial for long-term sustainability and investor confidence.

Return on Assets (ROA) are growing?

Return on Assets (ROA) measures a company's net income relative to its total assets, indicating how efficiently management is using the company's assets to generate earnings.

TeamViewer's ROA increased from 0.0497 in 2022 to 0.0998 in 2023, marking a substantial improvement by a factor of almost 2. This indicates that TeamViewer has become significantly more efficient in generating profits from its assets. A higher ROA is generally preferable as it signifies better asset efficiency and profitability. Moreover, viewing ROA across a span of years provides a comprehensive look at performance trends. For added perspective, when comparing TeamViewer's 2023 ROA of 0.0998 with the industry median ROA of 0.6741 for the same year, it is evident that while TeamViewer's performance shows improvement, it still lags behind the broader industry average. Nonetheless, this trend is clearly positive for the company's financial health.

Operating Cashflow are higher than Netincome?

The criterion Operating Cash Flow being higher than Net Income evaluates the quality of earnings. Cash flow is a more reliable indicator of financial health than net income, which can be affected by non-cash items and accounting policies.

In 2023, TeamViewer's Operating Cash Flow of €229,865,000 is substantially higher than its Net Income of €114,015,000. This trend indicates that TeamViewer is generating solid cash flow from its operating activities, independent of accounting adjustments. Over the years, there has been a consistent growth pattern in Operating Cash Flow, rising from €78,043,000 in 2016 to €229,865,000 in 2023. In contrast, Net Income has shown more volatility, including negative figures in earlier years and a significant increase only recently. This divergence suggests strong operational efficiency and sound cash management. Therefore, based on this criterion, we add 1 point for TeamViewer, reflecting favorable financial health.

Liquidity of TeamViewer (TMV.DE)

Leverage is declining?

Leverage is a key financial metric that measures the amount of debt used by a company to finance its assets. It's important because a decrease in leverage suggests a reduction in debt relative to equity, indicating a potentially stronger financial position.

The leverage ratio for TeamViewer (TMV.DE) has decreased from 0.4429 in 2022 to 0.3888 in 2023. This downward trend is favorable as it demonstrates a 12.24% decrease in leverage year-over-year. Historically examining the last 20 years, the leverage ratios have varied significantly, with the highest at 0.7158 in 2018 and lowest at 0.3888 in 2023. This reduction in leverage suggests that TeamViewer is relying less on debt and more on equity to finance its operations, which is a positive sign for its financial health. Thus, in this criteria, TeamViewer earns a point.

Current Ratio is growing?

The current ratio measures a company's capacity to pay short-term liabilities with short-term assets, and is a key indicator of liquidity.

TeamViewer's current ratio has decreased from 0.4407 in 2022 to 0.3116 in 2023, indicating a reduction in liquidity. A current ratio below 1 suggests that the company may have difficulties in meeting its short-term obligations, which is particularly concerning given that the industry median is significantly higher at 1.7519 in 2023. Historically, TeamViewer's current ratio has fluctuated, peaking at 1.7108 in 2021 before declining again. Therefore, this negative trend results in 0 points being added for this criterion.

Number of shares not diluted?

Outstanding shares represent the total number of a company's shares that are currently owned by all its shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s officers and insiders. A reduction in outstanding shares is often a positive signal as it can imply share buybacks or other forms of capital return to shareholders.

In 2022, TeamViewer had outstanding shares of 184,618,537. By 2023, the number of outstanding shares decreased to 172,140,196. This represents a drop of approximately 6.76%. Historically, the company had a stable number of outstanding shares at 200,000,000 from 2016 to 2020. A slight increase was noted in 2021 with 200,130,077 shares, followed by a decrease in subsequent years.Therefore, we add 1 point because the outstanding shares decreased in 2023. This trend is favorable as it suggests potential share buyback programs, which could enhance shareholder value by reducing the share supply and potentially boosting the price per share.

Operating of TeamViewer (TMV.DE)

Cross Margin is growing?

Gross Margin changes are pivotal; they reveal efficiency in converting revenue into profit.

TeamViewer reported a Gross Margin of 0.8696 in 2023, an increase from 0.8563 in 2022. This improvement in margin, registering at 1.32%, is a positive indicator and scores 1 point on the Piotroski scale. This gain exemplifies the company's effective cost management and margin expansion strategies. Analyzing a broader timeframe, the company's Gross Margin trajectory from 2016 indicates consistent growth, underscoring a solid upward trend. Industry comparisons further enhance this observation: whereas the industry's median margin was 0.6741 in 2023, TeamViewer's Gross Margin significantly surpasses this benchmark, showcasing the company's superior operational efficiency in relation to peers.

Asset Turnover Ratio is growing?

Asset Turnover measures a company's efficiency in using its assets to generate sales. It is crucial for assessing operational efficiency.

In 2023, TeamViewer's Asset Turnover increased to 0.5487 from 0.4162 in 2022. This uptick, adding 1 point to the score, signals an enhancement in the company's efficiency in leveraging its assets to drive sales. Over a span of years, the company has demonstrated a progressive increase from 0.1421 in 2017, reflecting a positive trend despite a minor dip in 2021. The consistent growth suggests improved operational practices and resource utilization, which is a favorable indicator for stakeholders.