Last update on 2024-06-07

Amkor Technology (AMKR) - Piotroski F-Score Analysis for Year 2023 (Final Score: 5/9)

Amkor Technology (AMKR) received a Piotroski F-Score of 5/9 in 2023, indicating mixed financial health and efficiency.

Short Analysis - Piotroski Score: 5

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

The Piotroski F-Score evaluates a company's financial health based on profitability, liquidity, and leverage criteria. Amkor Technology (AMKR) scored 5 out of 9, indicating a mixed performance. The company has a positive net income and cash flow from operations, and an improved current ratio, which reflects good profitability and liquidity. However, its return on assets and asset turnover ratios have declined, and leverage has increased, highlighting some efficiency issues and potential financial risks. Additionally, the number of outstanding shares has increased, which could dilute ownership and earnings per share. Overall, AMKR shows positive signs in certain areas but also presents some challenges.

Insights for Value Investors Seeking Stable Income

Given AMKR's score of 5 in the Piotroski F-Score analysis, it shows mixed outcomes. The positives include solid profitability and liquidity, but there are concerns about asset efficiency and rising leverage. This stock may be worth considering for a more in-depth analysis if you're looking for profitable and liquid companies. However, approach with caution due to its declining efficiency ratios and increasing financial risks. Investors should perform further research and consider industry comparisons before making a decision.

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

Profitability of Amkor Technology (AMKR)

Company has a positive net income?

Net income is the bottom line of a company's income statement and shows overall profitability. A positive net income indicates the company is profitable.

With a net income of $359,813,000 in 2023, Amkor Technology (AMKR) demonstrates profitability, adding 1 point in the Piotroski Analysis. A 20-year recap highlights notable variability, yet recent figures show steady improvement, affirming a positive trend.

Company has a positive cash flow?

The criterion assesses if a company's Cash Flow from Operations (CFO) for 2023 is positive, which indicates financial health and operational efficiency.

Amkor Technology (AMKR) has a positive Cash Flow from Operations of $1,270,020,000 in 2023. This is a significant figure and reflective of strong operational performance. In the past 20 years, AMKR’s CFO has shown considerable improvements, starting from $176,346,000 in 2003 to $1,270,020,000 in 2023. This trend indicates a steady and healthy increase in cash flow generated from the company's core business activities. Therefore, AMKR earns 1 point in the Piotroski Analysis on this criterion.

Return on Assets (ROA) are growing?

Change in ROA assesses whether a company has improved its Return on Assets, which reflects its efficiency in generating profits from its assets.

With ROA declining from 0.1191 in 2022 to 0.0529 in 2023, Amkor Technology has shown a decrease in asset profitability. This trend is concerning as it indicates a reduction in efficiency in using assets to generate profits. The company moves from a relative performance of 24.2% below the industry median (0.1191 vs. 0.4909 in 2022) to 89.2% below in 2023 (0.0529 vs. 0.4919). This drastic drop necessitates addressing operational inefficiencies. Hence, the Piotroski score for ROA change is set to 0.

Operating Cashflow are higher than Netincome?

Explain the criterion for Amkor Technology (AMKR) and why it is important to consider

This criterion assesses whether a company’s operating cash flow is higher than its net income. The logic behind this metric is that it ensures the company is actually generating cash and not just accounting profits, providing a more realistic view of its financial health.

Liquidity of Amkor Technology (AMKR)

Leverage is declining?

The criterion evaluates the year-on-year change in leverage to assess the company's solvency improvements or potential financial risks.

Amkor Technology (AMKR) experienced an increase in leverage from 0.1707 in 2022 to 0.1667 in 2023. Despite this increase, the company's leverage ratio is significantly lower compared to its historical values over the last two decades. For example, in 2003 the leverage ratio was as high as 0.6418. However, according to the Piotroski F-Score criteria, an increase in leverage is typically viewed negatively because it can signify rising debt levels and potential risks associated with over-leveraging. Therefore, we are setting the score for this criterion as 0.

Current Ratio is growing?

The Current Ratio is a liquidity ratio that measures a company's ability to pay short-term obligations with its current assets. It's a critical indicator of financial health, especially for creditors and investors.

The Current Ratio for Amkor Technology (AMKR) has increased from 1.9858 in 2022 to 2.3083 in 2023, an increment that results in a 1 point addition under the Piotroski score criteria. This increase signifies a 16.21% improvement in the company's liquidity position year-over-year. Such an upward movement is generally interpreted as an indication of enhanced financial stability and reduced liquidity risk. However, it's noteworthy that Amkor's ratio still trails the industry median of 3.4213 for 2023, suggesting relative underperformance on a broader industry scale. Nonetheless, the trend is positive and reflects prudent liquidity management within the company.

Number of shares not diluted?

Outstanding shares indicate how many shares of a company are currently available for trading, which directly affects ownership and earnings per share.

Between 2003 and 2023, the number of outstanding shares for Amkor Technology increased from 167,142,000 to 245,628,000. Specifically, shares outstanding grew from 244,676,000 in 2022 to 245,628,000 in 2023, which is an increase. According to the Piotroski score criteria, an increase in outstanding shares in 2023 means we should assign a score of 0 points. Generally, an increase in outstanding shares can dilute the ownership and earnings per share (EPS) since the company's profits are now spread over a larger number of shares. This could potentially unfavorably affect investor sentiment and share valuation. Historically, the pattern shows periodic share issuances, often seen in capital-raising activities. However, consistent increases might also signal short-term financial needs possibly at the expense of long-term shareholder value.

Operating of Amkor Technology (AMKR)

Cross Margin is growing?

Change in Gross Margin compares the company's efficiency in converting revenue into actual profit over two periods. This measure helps assess cost management and pricing strategy effectiveness.

In 2023, Amkor Technology (AMKR) reported a Gross Margin of 0.145, a decline from 0.1875 in 2022. This to value represents a negative outcome as the Gross Margin has decreased, indicating potential challenges in cost control or pricing power. This translates into a score of 0 for this Piotroski criterion. When juxtaposed with the industry median, which stood at 0.4919 in 2023, AMKR’s Gross Margin is markedly lower, raising concerns about its competitive positioning.

Asset Turnover Ratio is growing?

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

When looking at Amkor Technology's (AMKR) Asset Turnover ratios, we see a decrease from 1.1029 in 2022 to 0.9568 in 2023. This decline indicates that the company became less efficient in generating sales from its assets over the past year, marking a negative trend. To place this in perspective: between 2003 and 2023, the highest recorded asset turnover ratio was 1.1372 in 2010, and the lowest was 0.6253 in 2003. The recent ratio of 0.9568 is below the 20-year average, signaling a downturn. Therefore, based on the Piotroski analysis, Amkor Technology would receive 0 points in this criterion, highlighting a need for the company to potentially reassess its asset utilization strategies.