Last update on 2024-06-07

Amedisys (AMED) - Piotroski F-Score Analysis for Year 2023 (Final Score: 4/9)

Analyze Amedisys (AMED) 2023 Piotroski F-Score of 4/9 to understand its financial health and investor appeal with insights on profitability, liquidity, and efficiency.

Short Analysis - Piotroski Score: 4

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

The Piotroski F-Score helps investors identify strong and undervalued stocks by looking at nine criteria: profitability, liquidity, and operating efficiency. Amedisys scored 4 out of 9, meaning it has a mixed financial position. Key points about Amedisys: The company shows positive cash flow and financial leverage is declining, which are good signs. However, it has a negative net income, declining return on assets, and a growing number of shares. Additionally, its current ratio and asset turnover ratio have decreased, indicating potential liquidity issues and less efficient use of assets.

Insights for Value Investors Seeking Stable Income

Amedisys has a mixed score on the Piotroski scale, showing both strengths and weaknesses. While its positive cash flow and improved leverage are encouraging, the negative net income and other declines suggest caution. If you are an investor, it might be worth looking into Amedisys for its cash flow and potential for debt management, but be cautious of its profitability and operational efficiency issues. Further research and comparison with industry peers are recommended before making any investment decisions.

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

Profitability of Amedisys (AMED)

Company has a positive net income?

Net income indicates a company's profitability. Positive net income is crucial as it demonstrates a company's ability to generate profit, while negative net income indicates a loss.

Given the provided data, Amedisys (AMED) reported a negative net income of -$9,747,000 in 2023. Historically, Amedisys has had fluctuations in its net income with periods of both profit and loss. Notably, the company experienced significant losses in years like 2011 and 2012 but has shown periods of recovery, such as in 2018 to 2021. The negative net income for 2023 signals a downturn and yields a score of 0 for this Piotroski criterion.

Company has a positive cash flow?

Assess whether the Cash Flow from Operations (CFO) for Amedisys (AMED) in 2023 is positive, as per the Piotroski F-Score criteria.

For 2023, the Cash Flow from Operations for Amedisys (AMED) is $137,188,000, which is positive. According to the Piotroski F-Score, a positive CFO increases the score by one point, reflecting the company's ability to generate sufficient cash flow to cover its operational expenses. This trend is favorable as positive CFO numbers over several years indicate strong, consistent cash generation ability. Over the last 20 years, with the exception of 2013, Amedisys has largely maintained positive operating cash flows, which underscores robust financial health and operational efficiency. Therefore, Amedisys earns 1 point for this criteria based on a positive CFO for 2023.

Return on Assets (ROA) are growing?

ROA measures a company's ability to generate profit from its assets; an increasing ROA indicates better efficiency and profitability.

In 2023, Amedisys (AMED) reported a Return on Assets (ROA) of -0.0048, a significant decline from the 2022 ROA of 0.0616. This translates to a net deterioration in the company’s efficiency in generating profits from its assets. Given the Piotroski criterion stipulating a point is awarded if ROA increases, Amedisys’s ROA performance in 2023 merits a score of 0. The deteriorating ROA is concerning when compared to the last 20 years of industry median ROA, which ranged from 0.3162 to 0.3785, far above Amedisys's current ROA. This negative ROA can be alarming for investors as it suggests operational inefficiency and potentially unsound asset management practices.

Operating Cashflow are higher than Netincome?

Operating Cash Flow being higher than Net Income indicates strong earnings quality and the potential for sustainable operational performance.

For Amedisys (AMED) in 2023, the Operating Cash Flow is $137,188,000 while the Net Income is -$9,747,000. The Operating Cash Flow is significantly higher, which adds 1 point to the Piotroski Score. This trend is positive as it shows that despite reporting a net loss, Amedisys generated strong cash flows from its operations. Over the last 20 years, the company has often displayed higher operating cash flow compared to net income, reflecting robust operational efficiency. This trend is most evident during certain fiscal years such as 2005 with an OCF of $43,540,000 versus a net income of $30,102,000 and continues through 2020 with an OCF of $288,952,000 overshadowing a net income of $183,608,000.

Liquidity of Amedisys (AMED)

Leverage is declining?

Change in Leverage involves assessing the ratio of a company's debt to its equity, providing insight into a company's debt-servicing capabilities.

For Amedisys (AMED), the leverage has decreased from 0.2454 in 2022 to 0.202 in 2023. This trend is positive and adds 1 point to their financial health score based on the Piotroski F-Score criterion. Historical leverage data over the past 20 years for Amedisys shows variability, peaking in 2008 at 0.2672 and reaching a low of 0.0046 in 2006. The recent decline indicates a more conservative approach towards debt, reflecting improved balance sheet stability.

Current Ratio is growing?

The current ratio measures a company's ability to cover its short-term liabilities with its short-term assets, important for assessing liquidity.

In 2023, Amedisys' current ratio stands at 1.049, a slight decrease from the 1.094 reported in 2022. Typically, an increase in the current ratio indicates improved liquidity, whereas a decrease may point to potential liquidity problems. Historically, Amedisys' current ratio has fluctuated, dipping as low as 0.6571 in 2013 and reaching a high of 2.8323 in 2004. Compared to the industry median current ratio of 1.2826 in 2023, Amedisys' 1.049 is below average, which might be concerning to investors. Given the decrease from 2022 to 2023, the score for this criterion would be 0.

Number of shares not diluted?

The criterion assesses changes in shares outstanding to evaluate if a company is diluting shareholder value by issuing more shares.

The Outstanding Shares for Amedisys increased from 32,517,000 in 2022 to 32,599,000 in 2023. As per the Piotroski criteria, an increase in outstanding shares is generally viewed negatively because it can signal share dilution unless justified by strategic initiatives. Here, Amedisys records a zero score for this criterion. Historically, the company's shares have fluctuated over the last 20 years, with several periods of increase. The hike from 2022 to 2023 suggests a potential dilution of shareholder value.

Operating of Amedisys (AMED)

Cross Margin is growing?

Change in Gross Margin evaluates whether the company's profit margin before deducting operating expenses has expanded or contracted, indicating cost control and pricing power.

The Gross Margin for Amedisys (AMED) increased from 0.4331 in 2022 to 0.4431 in 2023, which adds 1 point in the Piotroski Score. This rise indicates better cost management or increased pricing power. Comparing this to the industry median of 0.3298 in 2023, Amedisys outperformed its peers significantly, signaling effective financial management and a stronger competitive position.

Asset Turnover Ratio is growing?

Change in Asset Turnover is crucial for evaluating a company's efficiency in generating revenue from its assets over a period.

Amedisys (AMED) has shown a decrease in Asset Turnover from 1.1552 in 2022 to 1.0925 in 2023. This indicates a decline in the efficiency with which the company is using its assets to generate revenue. This trend is concerning, as lower asset turnover ratios can suggest that the company is not optimizing its asset utilization as effectively as in previous years. Therefore, we assign 0 points for this criterion as the Asset Turnover has indeed decreased.