VECO 42.48 (+5.86%)
US9224171002SemiconductorsSemiconductor Equipment & Materials

Last update on 2024-06-07

Veeco Instruments (VECO) - Piotroski F-Score Analysis for Year 2023 (Final Score: 5/9)

Uncover the detailed Piotroski F-Score analysis of Veeco Instruments (VECO) for 2023, evaluating financial health based on nine crucial criteria, yielding a score of 5/9.

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.
Learn more...

Short Analysis - Piotroski Score: 5

We're running Veeco Instruments (VECO) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

Criteria
Company has a positive net income?
0
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?
0
Cross Margin is growing?
1
Asset Turnover Ratio is growing?
0

The Piotroski F-Score is a measure from 0 to 9 that helps investors assess a company's financial health, focusing on profitability, liquidity, and operating efficiency. Veeco Instruments (VECO) was analyzed and scored a 5 out of 9, meaning it met 5 of the Piotroski criteria. 1. Profitability: VECO has a negative net income (-$30.368 million) and a decreasing ROA (-0.0258), resulting in no points for these criteria. However, its operating cash flow ($61.674 million) is higher than net income, earning 1 point. 2. Liquidity: The leverage ratio slightly increased, gaining no points; however, the company's current ratio improved to 3.2393, earning 1 point. The number of outstanding shares increased, which means no points for share dilution. 3. Operating Efficiency: VECO's gross margin improved to 0.4277, earning 1 point, but the asset turnover ratio decreased to 0.5654, resulting in no points. VECO demonstrates some positive aspects in cash generation and liquidity but has issues with profitability and operational efficiency.

Insights for Value Investors Seeking Stable Income

Given the Piotroski F-Score of 5, Veeco Instruments (VECO) shows a mixed financial position. While it has positive aspects like a good current ratio and cash flow, it struggles with profitability and asset management. Therefore, potential investors might want to further investigate these weaknesses before making any decisions. VECO could be worth looking into for those willing to accept some risks, but it's not a straightforward strong buy based on this analysis.

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

Profitability of Veeco Instruments (VECO)

Company has a positive net income?

Net income is one of the primary indicators of a company’s profitability. A positive net income means the company is profitable, whereas a negative net income indicates a loss.

Historical Net Income of Veeco Instruments (VECO)

For 2023, Veeco Instruments' net income stands at -30.368 million dollars, which is negative. Therefore, according to Piotroski's criterion for net income, Veeco Instruments does not earn the point, setting this criterion to zero. Over the past 20 years, the company has experienced fluctuating net income, with significant periods of negative income such as -62.555 million in 2004, -71.063 million in 2008, and -407.088 million in 2019. However, there were also profitable years, notably in 2010 (361.76 million) and 2021 (166.942 million). The trend reveals inconsistencies in maintaining profitability, which may concern investors seeking stable earnings.

Company has a positive cash flow?

Cash Flow from Operations (CFO) indicates the money a company brings in through its regular business operations. Positive cash flow signifies good financial health.

Historical Operating Cash Flow of Veeco Instruments (VECO)

In 2023, Veeco Instruments' CFO was positive, registering $61,674,000. This is a favorable trend, reflecting solid cash generation capacity. Over the last 20 years, the company's CFO fluctuated significantly, with negative CFOs in 2016 and 2018. However, the recent positive trend strengthens confidence in the company's operational efficacy. Thus, 1 point is added for positive CFO.

Return on Assets (ROA) are growing?

Return on Assets (ROA) measures the net income produced by total assets during a period. It is a key profitability metric indicating how effectively the company uses its assets to generate profit. For Veeco Instruments (VECO), it is crucial to look at the trending ROA as it provides insights into management effectiveness and operational efficiency.

Historical change in Return on Assets (ROA) of Veeco Instruments (VECO)

The ROA of Veeco Instruments has decreased from 0.1647 in 2022 to -0.0258 in 2023, indicating a weakening position in how effectively the company has been using its assets. This negative trending ROA is indeed concerning as it reflects operational inefficiencies and potential profitability issues. Comparing this with the industry's median ROA which has been consistently high at 0.4718 in 2023, Veeco Instruments appears to be underperforming significantly. This decline results in a score of 0 based on the Piotroski criterion, suggesting a need for strategic review and corrective measures. Additional data from the past 20 years shows that the company has experienced several fluctuations in operating cash flow, which could partly account for the observed ROA trends, impacting strategic planning and financial stability.

Operating Cashflow are higher than Netincome?

Net income and operating cash flow are critical indicators of a company's financial health. A higher operating cash flow than net income indicates strong cash generation relative to earnings.

Historical accruals of Veeco Instruments (VECO)

For 2023, Veeco Instruments (VECO) reported an operating cash flow of $61.67 million and a net income of -$30.37 million. Since the operating cash flow is significantly higher than the net income, this indicates a positive trend in the company's ability to generate cash despite reporting a net loss. Over the last 20 years, the operating cash flow has shown fluctuations, peaking at $194.21 million in 2010 and recording lows, such as -$37.73 million in 2018. In contrast, net income has also seen significant variations with highs of $361.76 million in 2010 and lows of -$407.09 million in 2018. The 2023 data suggests a robust cash-generating capacity, warranting an allocation of 1 point in the Piotroski score for this criterion.

Liquidity of Veeco Instruments (VECO)

Leverage is declining?

Change in leverage evaluates the company's financial risk by comparing the degree of leverage from one period to the next. Leverage represents the proportion of a company's debt compared to its equity.

Historical leverage of Veeco Instruments (VECO)

Veeco Instruments (VECO) has experienced an increase in leverage from 0.2553 in 2022 to 0.2494 in 2023. Over a span of the last 20 years, the leverage ratio has fluctuated but has remained relatively low in recent years. The current increase, although minor, results in no point being awarded according to the Piotroski F-Score methodology. The increase raises concerns about slightly higher financial risk, although the ratio is still relatively low compared to historical figures.

Current Ratio is growing?

The change in current ratio is an important indicator of a company's liquidity, showing the capability of Veeco Instruments to cover its short-term liabilities with its short-term assets.

Historical Current Ratio of Veeco Instruments (VECO)

By comparing Veeco Instruments' current ratio of 3.2393 in 2023 to its current ratio of 2.5936 in 2022, we observe an increase, thus adding 1 point for a positive trend in liquidity. Historically, the company has generally shown a solid current ratio, with notable peaks in 2003 (5.4861) and 2012 (6.6302). Comparatively, Veeco’s 2023 current ratio of 3.2393 demonstrates a superior liquidity position against the industry median of 3.161. This increasing trend implies stronger short-term financial health for the company in comparison to the previous year and suggests better risk management in meeting short-term obligations.

Number of shares not diluted?

Change in Shares Outstanding measures the dilution of existing shareholders and can impact earnings per share.

Historical outstanding shares of Veeco Instruments (VECO)

Between 2022 and 2023, Veeco Instruments (VECO) experienced an increase in outstanding shares from 49,906,000 to 53,769,000. This 7.7% increase is not favorable, as it indicates dilution, reducing every share's claim on earnings and assets. This negative trend results in a score of 0.

Operating of Veeco Instruments (VECO)

Cross Margin is growing?

The Gross Margin criterion measures a company's efficiency in converting sales into actual profit. An increase signifies better cost management and higher profitability.

Historical gross margin of Veeco Instruments (VECO)

The Gross Margin for Veeco Instruments (VECO) increased from 0.4073 in 2022 to 0.4277 in 2023. This represents a positive uptrend in the company's ability to manage production costs and generate profit from sales, against the backdrop of the industry's median gross margin of 0.4718 in 2023. Over the past 20 years, VECO's gross margin showed considerable variability, with notable dips, but the recent improvement aligns with its historical peaks, implying resilience and efficient cost controls. Hence, VECO earns a full 1 point for this criterion, reflecting an encouraging financial health indicator.

Asset Turnover Ratio is growing?

Asset Turnover is a financial ratio that measures the efficiency of a company's use of its assets to generate sales revenue. It is crucial as it reflects operational efficiency.

Historical asset turnover ratio of Veeco Instruments (VECO)

The Asset Turnover for Veeco Instruments (VECO) has decreased from 0.6375 in 2022 to 0.5654 in 2023. A higher Asset Turnover ratio would indicate better utilization of assets to generate revenue. However, in this case, the decline suggests slightly less efficient asset usage. Given the long-term trend over the last 20 years, the Asset Turnover ratio has frequently fluctuated, reaching a high of 1.0645 in 2010 and a low of 0.4031 in 2016. This downward trend in 2023 merits attention, given its implications for asset management and revenue generation, and scores 0 points in the Piotroski analysis.


Obligatory risk notice

We would like to point out that the contents of this website are for general information purposes only and do not constitute recommendations for the purchase or sale of specific financial instruments, and therefore do not constitute investment advice. In particular, marketstorylabs.com and its creators cannot assess the extent to which information / recommendations made on the pages correspond to your investment objectives, your risk tolerance and your ability to bear losses. Therefore, if you make any investment decisions based on information on the site, you do so solely on your own responsibility and at your own risk. This in turn means that neither marketstorylabs.com nor its creators are liable for any losses incurred as a result of investment decisions based on the information on the marketstorylabs.com website or other media used.