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Last update on 2024-06-07

Usana Health Sciences (USNA) - Piotroski F-Score Analysis for Year 2023 (Final Score: 7/9)

Usana Health Sciences (USNA) scores 7/9 on the Piotroski F-Score in 2023, showcasing strong financial health with positive net income, cash flow, and rising current ratio.

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 Usana Health Sciences (USNA) 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?
1
Number of shares not diluted?
1
Cross Margin is growing?
1
Asset Turnover Ratio is growing?
0

Usana Health Sciences (USNA) was assessed using the Piotroski F-Score system, a model that rates a company's financial strength on a scale of 0 to 9 across nine criteria. USNA achieved a score of 7, indicating robust financial health. The evaluation covered profitability, liquidity, and operational efficiency aspects. Highlights from the analysis include a positive net income and cash flow from operations, both showing consistency, though the recent net income was below its all-time high. Return on Assets (ROA) showed a decline, suggesting less efficient profit generation from assets. The company showed no change in leverage, which is positive due to its zero-debt status. The Current Ratio improved, meaning better short-term liquidity, and the Gross Margin increased, reflecting operational efficiency. However, the Asset Turnover ratio decreased, signaling a drop in asset use efficiency. The number of shares was slightly up, which did not favor the score for that criterion.

Insights for Value Investors Seeking Stable Income

With a Piotroski Score of 7, Usana Health Sciences (USNA) shows strong financial health and operational efficiency. Despite some areas of concern, like declining ROA and asset turnover, key metrics like positive cash flow, net income, and strong liquidity suggest USNA is a resilient and financially stable company. As an investor, USNA is worth considering, especially if you value consistent profitability and solid financial management. However, keep an eye on areas like asset turnover and ROA which may need improvement.

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

Profitability of Usana Health Sciences (USNA)

Company has a positive net income?

The criterion assesses whether the net income is positive or not for the year under consideration.

Historical Net Income of Usana Health Sciences (USNA)

As of 2023, Usana Health Sciences (USNA) reported a net income of $63,788,000. This value is positive, thereby satisfying the criterion and adding 1 point for this metric. Over the last 20 years, USNA's net income has shown a generally upward trend, although there were notable fluctuations. For instance, the company had its highest net income in 2018 at $126,224,000, but experienced a decline thereafter. Comparatively, the current net income is indicative of robust financial health, even though it's below its all-time high, which highlights the company's ability to maintain profitability consistently over the long term. This sustained positive net income is a good indicator of stable financial performance.

Company has a positive cash flow?

Positive Cash Flow from Operations (CFO) signifies a company is generating enough cash from its core business operations, which is crucial for sustainable growth.

Historical Operating Cash Flow of Usana Health Sciences (USNA)

USANA Health Sciences (USNA) reported Cash Flow from Operations of $70,641,000 in 2023, which is positive, thereby adding 1 point to the Piotroski Score. Historically, USANA has seen fluctuating CFO figures, such as $160,401,000 in 2020 and $103,902,000 in 2022. Despite the recent decline, a positive CFO indicates that USANA is generating sufficient cash internally, showcasing stable operational efficiency, although it warrants attention to understand the downward trend.

Return on Assets (ROA) are growing?

Return on Assets (ROA) measures a company's ability to generate profit from its assets. It's crucial because it shows how efficiently a company is using its assets to generate earnings.

Historical change in Return on Assets (ROA) of Usana Health Sciences (USNA)

Comparing the ROA of 0.1038 in 2023 to 0.1181 in 2022 reveals a decrease, resulting in 0 points for this criterion. This downward trend suggests that Usana Health Sciences is less efficient in generating profit from its assets compared to the previous year. Given that the last 20 years show fluctuating ROA values and the industry median ranged roughly between 0.4411 to 0.5755, Usana significantly lags behind its industry peers. Thus, this performance should be a concern for investors and stakeholders.

Operating Cashflow are higher than Netincome?

This criterion assesses whether a company is generating more cash from its operations than what it reports as net income. It reveals the quality of earnings and potential earnings manipulation.

Historical accruals of Usana Health Sciences (USNA)

With an operating cash flow of $70.6 million and a net income of $63.8 million for 2023, Usana Health Sciences demonstrates a positive cash-generating capability beyond its net earnings. This suggests a high quality of earnings, potentially highlighting efficient operations and little to no earnings manipulation. The downward trend in y-o-y operating cash flow aligns with the decreasing accrual ratios since 2003, emphasizing a potential quality improvement in earnings over time. This metric, therefore, receives a score of 1 for 2023.

Liquidity of Usana Health Sciences (USNA)

Leverage is declining?

Change in leverage compares the ratio of total debt to total assets year-over-year.

Historical leverage of Usana Health Sciences (USNA)

In 2022, Usana Health Sciences (USNA) exhibited a leverage ratio of 0, which remained consistent in 2023. With no change in leverage, the criterion yields a score of 0. Historically, the company had variations, peaking at 0.2855 in 2008. The consistent 0% leverage indicates a debt-free balance sheet in recent years, reflecting conservative financial management.

Current Ratio is growing?

Evaluating change in Current Ratio is critical as it measures short-term liquidity and a company's ability to cover its short-term obligations.

Historical Current Ratio of Usana Health Sciences (USNA)

The Current Ratio for Usana Health Sciences (USNA) has increased from 2.6724 in 2022 to 3.515 in 2023, showing an improvement. A higher Current Ratio is generally a positive indicator, suggesting the company is in a better position to meet its short-term liabilities. Notably, the Current Ratio has consistently exceeded the industry median over the past 20 years, posting a figure of 3.515 in 2023 against an industry median of 1.5029. This trend underscores USNA's prudential management of liquidity, marking a positive trend for potential investors.

Number of shares not diluted?

Change in shares outstanding refers to the number of shares that have been issued and are currently held by shareholders. If shares outstanding decrease, it often signifies share buybacks.

Historical outstanding shares of Usana Health Sciences (USNA)

For the year 2023, the outstanding shares for Usana Health Sciences (USNA) increased to 19,250,000 from 19,254,000 in 2022. Consequently, according to the Piotroski Analysis framework, no point is added for this criterion because share buybacks or a decrease in outstanding shares indicate a good trend. Looking at the broader data over the last 20 years, there is a downward trend from 42,638,000 shares in 2003 to 19,250,000 shares in 2023. This long-term trend is positive as it implies consistent share repurchase, which can increase earnings per share and return capital to shareholders. However, for the calendar year of 2023, the trend was marginally higher but not substantially concerning.

Operating of Usana Health Sciences (USNA)

Cross Margin is growing?

The criterion examines an increase in Gross Margin year-over-year, reflecting a company's efficiency in production and pricing. An increasing margin suggests improved profitability and operational effectiveness.

Historical gross margin of Usana Health Sciences (USNA)

Usana Health Sciences (USNA) has shown an increase in its Gross Margin from 0.8058 in 2022 to 0.8082 in 2023, which adds 1 point to its Piotroski score for this criterion. Historically, over the past 20 years, the Gross Margin has generally remained above the industry median consistently showing figures significantly higher than the industry average. This upward trend in Gross Margin in 2023 is particularly promising when considering the industry's median Gross Margin of 0.4411, suggesting that USNA is outperforming its peers in terms of production efficiency and pricing. This trend is good and indicates strong operational effectiveness.

Asset Turnover Ratio is growing?

Asset Turnover measures a company's efficiency in using its assets to generate sales. A higher ratio indicates better performance.

Historical asset turnover ratio of Usana Health Sciences (USNA)

Comparing the Asset Turnover of 1.4984 in 2023 with 1.7008 in 2022, it's evident that the ratio has decreased. This decline from 1.7008 to 1.4984 suggests a reduced efficiency in using the company’s assets to generate revenue. Over the past 20 years, the Asset Turnover ratio has shown a general downward trend from a high of 4.509 in 2005 to its current level. The decreasing trend is concerning, indicating that Usana Health Sciences (USNA) is becoming less efficient in asset utilization year over year. Therefore, for this specific Piotroski analysis criterion, the score remains 0 as the Asset Turnover ratio has not improved.


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