WERN 37.99 (+3.66%)
US9507551086TransportationTrucking

Last update on 2024-06-07

Werner Enterprises (WERN) - Piotroski F-Score Analysis for Year 2023 (Final Score: 5/9)

Werner Enterprises (WERN) Piotroski F-Score Analysis for 2023 reveals a score of 5/9, assessing profitability, liquidity, and efficiency metrics.

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: 5

We're running Werner Enterprises (WERN) 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?
1
Cross Margin is growing?
0
Asset Turnover Ratio is growing?
0

Werner Enterprises (WERN) scored a 5 out of 9 on the Piotroski F-Score, indicating a mixed financial position. The Piotroski F-Score rates companies based on 9 criteria focused on profitability, liquidity, and operating efficiency. A score of 5 suggests that while Werner Enterprises shows strengths such as positive net income, positive cash flow from operations, and a reduction in leverage, there are weaknesses in areas like return on assets, gross margin, and asset turnover ratio. This score places the company in a neutral position, not strongly indicating either a financially sound or troubled status.

Insights for Value Investors Seeking Stable Income

Based on the Piotroski F-Score, Werner Enterprises (WERN) might be worth considering for further analysis but with caution. The positive aspects, like consistent profitability and cash flow, are encouraging. However, the decreasing return on assets and asset turnover ratios signal a need for careful evaluation before investing. For a robust investment decision, you should look deeper into the company’s long-term strategic plans, market position, and industry conditions. Therefore, it could be a 'watchlist' candidate but perhaps not a 'buy' just yet.

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

Profitability of Werner Enterprises (WERN)

Company has a positive net income?

Netincome as one of the nine Piotroski criteria assesses a company's profitability. Positive earnings indicate financial health and add 1 point.

Historical Net Income of Werner Enterprises (WERN)

The net income for Werner Enterprises in 2023 is $112,382,000, which is positive. This means the company is profitable for the year. Over the last 20 years, the company's net income has generally been positive, although there's variability with peaks like $259,052,000 in 2021 and troughs such as $56,584,000 in 2009. Therefore, this criterion earns Werner Enterprises a point, indicating their continued profitability trend.

Company has a positive cash flow?

Cash Flow from Operations (CFO) evaluates the cash generated from core business activities. Positive CFO is critical as it shows the company's ability to generate sufficient cash for sustaining and expanding operations.

Historical Operating Cash Flow of Werner Enterprises (WERN)

For the year 2023, Werner Enterprises reported a positive CFO of $474.37 million. This marks a consistent improvement over the last two decades, with notable upticks especially in the past five years. In context, their CFO has grown approximately 130% since 2003, indicating robust financial health and efficient operational management. Consequently, this criterion earns Werner Enterprises a full point for the positive trend in CFO, a crucial metric affirming their capacity to sustain profitability.

Return on Assets (ROA) are growing?

Return on Assets (ROA) measures how efficiently a company utilizes its assets to generate profit. Comparing changes in ROA is crucial in assessing a company's operational efficiency.

Historical change in Return on Assets (ROA) of Werner Enterprises (WERN)

The ROA for Werner Enterprises (WERN) decreased from 0.0846 in 2022 to 0.0359 in 2023. This decline indicates lower efficiency in generating profit from assets. Historically, the company has experienced fluctuations in its ROA over the last 20 years. Notably, the industry median ROA aligns similarly below averages fluctuating between 0.1419 and 0.6331. As such, Werner Enterprises receives 0 points for the ROA criterion in 2023, signifying reduced effectiveness compared to the previous year

Operating Cashflow are higher than Netincome?

One of the Piotroski criteria assesses the relationship between operating cash flow and net income to ensure that the company's profits are not just paper profits but are also reflected in cash flow. This helps in identifying earnings quality.

Historical accruals of Werner Enterprises (WERN)

For the fiscal year 2023, the operating cash flow of Werner Enterprises was $474.37 million, while the net income stood at $112.38 million. Clearly, the operating cash flow exceeds the net income, which results in a point being awarded for this criterion. Analyzing trends over the past twenty years, it's noticeable that Werner Enterprises has generally maintained higher operating cash flows in comparison to their net incomes. In 2023, the operating cash flow reached an impressive peak at $474.37 million, in contrast with a much lower net income. This consistent trend is positive as it suggests that the company is good at converting its profits into actual cash, an indicator of financial health. Reviewing the 20-year data, we can observe several peaks and consistency in operating cash flow performance. For instance, in 2015, the operating cash flow was $370.39 million, compared to a net income of $123.71 million, reflecting similar judicious management of cash flows. In addition, accruals metrics have remained relatively stable, indicating low manipulations in earnings reports. In essence, past figures reflect operational efficiency and strong cash flow management, marking a favorable trend overall.

Liquidity of Werner Enterprises (WERN)

Leverage is declining?

Change in Leverage examines whether a company's leverage ratio has increased or decreased compared to the previous year.

Historical leverage of Werner Enterprises (WERN)

For Werner Enterprises (WERN), the leverage ratio rose from 0.222 in 2022 to 0.2046 in 2023. This indicates a slight decrease in leverage. According to the Piotroski score system, a reduction in leverage is a positive indicator, adding 1 point to WERN's score for 2023. Over the past 20 years, there has been a general trend of fluctuating leverage, peaking in 2022. The current decrease showcases improved financial stability.

Current Ratio is growing?

The Current Ratio is a measure of a company’s ability to pay off its short-term liabilities with its short-term assets. It’s important for assessing the short-term financial health.

Historical Current Ratio of Werner Enterprises (WERN)

The Current Ratio for Werner Enterprises (WERN) decreased from 2.4639 in 2022 to 1.9197 in 2023. This suggests a decline in the company's liquidity position. Historically, the company's Current Ratio has fluctuated, with a peak observed at 2.4639 in 2022 and a significant low at 1.4714 in 2018. While the 2023 ratio is still above the industry median of 1.3866, the reduction from 2022 indicates a potential worsening in the company's short-term financial health.

Number of shares not diluted?

This criterion checks whether the company has been reducing its number of outstanding shares. It is important because a decrease in outstanding shares can indicate share repurchases, signaling management's confidence in the company's future and often leading to higher EPS.

Historical outstanding shares of Werner Enterprises (WERN)

For Werner Enterprises (WERN), the outstanding shares have decreased from 64,125,000 in 2022 to 63,444,681 in 2023. This reduction in outstanding shares indicates that the company has probably repurchased shares, a positive sign. Over the past 20 years, Werner's shares have generally decreased from a high of 81,668,000 in 2003 to the current levels, further underscoring a positive trend in reducing outstanding shares. Hence, we allocate 1 point for this criterion.

Operating of Werner Enterprises (WERN)

Cross Margin is growing?

Gross Margin is a key financial metric that indicates the percentage of revenue exceeding the cost of goods sold. It is crucial for evaluating the core profitability of a company.

Historical gross margin of Werner Enterprises (WERN)

For Werner Enterprises (WERN), the Gross Margin decreased from 0.1585 in 2022 to 0.129 in 2023, indicating a decline. This 0.0295 drop in Gross Margin demonstrates that the company is facing higher costs relative to its revenues, or is struggling with pricing power. Historically, Werner’s Gross Margin has shown significant variation, peaking in 2005 at 1.2246 and reaching a low in 2012 at 0.1624. With the industry median Gross Margin at 0.1488 in 2023, Werner’s Gross Margin underperforms, indicating weaker cost management or competitive pressures. This trend is unfortunately negative; hence Werner Enterprises scores 0 points for this criterion.

Asset Turnover Ratio is growing?

Asset turnover reflects how efficiently a company uses its assets to generate revenue.

Historical asset turnover ratio of Werner Enterprises (WERN)

The Asset Turnover ratio of Werner Enterprises has decreased from 1.1542 in 2022 to 1.0498 in 2023. This decline indicates a reduction in efficiency in using its assets to generate revenue, leading to a negative point for this Piotroski criterion. The 2023 figure of 1.0498 marks the lowest in over two decades, where the highest was 1.6389 in 2008. Over the last 20 years, a decreasing trend, especially in recent years, could raise concerns among investors about operational efficiency.


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