Last update on 2024-06-07

Anika Therapeutics (ANIK) - Piotroski F-Score Analysis for Year 2023 (Final Score: 4/9)

Anika Therapeutics (ANIK) Piotroski F-Score Analysis 2023: Final Score 4/9. Comprehensive look at profitability, liquidity, and efficiency metrics.

Short Analysis - Piotroski Score: 4

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

Anika Therapeutics (ANIK) was evaluated using the Piotroski F-Score, a 9-criteria scoring system that gauges profitability, liquidity, and operating efficiency. The company received a score of 4 out of a maximum of 9. This includes 0 points for negative net income, 0 points for negative cash flow from operations, and 0 points for a negative return on assets despite some improvement. However, it scored points for having operating cash flow greater than a negative net income, maintaining liquidity above industry medians, increasing gross margin, and a growing asset turnover ratio. Challenges include declining current ratios, increased leverage, and notable volatility in net income.

Insights for Value Investors Seeking Stable Income

Based on the given analysis, Anika Therapeutics (ANIK) exhibits some strengths in gross margins and asset efficiency but faces weaknesses in crucial areas like profitability and cash flow. It scored below average on the Piotroski F-Score which could be a red flag for potential investors. This suggests that while there are some positive aspects, the financial instability and ongoing challenges may make it too risky an investment at the moment. Interested investors should perhaps look for more consistent and financially stable alternatives.

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

Profitability of Anika Therapeutics (ANIK)

Company has a positive net income?

Net income assesses whether a company is profitable over a specific period, reflecting overall financial health.

For Anika Therapeutics (ANIK), the net income of -$82,667,000 in 2023 is negative. Hence, the Piotroski score for net income is set to 0. This negative trend in 2023 represents a significant departure from various profitable years between 2003 and 2021. For instance, notable net incomes include $38,319,479 in 2014 and $27,193,000 in 2019. Recent years have shown volatility, with substantial drops in 2020 (-$23,982,000) and 2022 (-$14,859,000), cumulating in the considerable negative value in 2023. This volatile net income trend may raise concerns regarding the company’s earnings stability.

Company has a positive cash flow?

The Cash Flow from Operations (CFO) criterion assesses a company's ability to generate positive cash flow from its core operations, which is crucial for sustainability.

In 2023, Anika Therapeutics (ANIK) reported a negative CFO of -$1,788,000. Over the past 20 years, except for 2023, the company has generally demonstrated a strong ability to generate positive operating cash flows, reaching highs of $25,165,001 in 2013 and $39,978,375 in 2014. The 2023 negative CFO marks a concerning deviation from the historical trend, signaling potential headwinds in operational efficiency or profitability. Hence, for this criterion, Anika receives 0 points as a positive CFO in indicative of financial health but this negative point shows weakness.

Return on Assets (ROA) are growing?

Change in ROA examines whether a company’s Return on Assets has improved year-over-year. This metric reflects the efficient use of assets to generate profits and is a critical measure of operational efficiency.

Anika Therapeutics (ANIK) had a Return on Assets (ROA) of -0.2668 in 2023, which increased from -0.0427 in 2022. Despite this improvement, ANIK’s ROA remains negative, indicating that the company is not effectively using its assets to generate profits. This persistent negative trend is troubling, especially when compared to the industry's median ROA of 0.4518 in 2023 and previous years' robust figures. Therefore, in the Piotroski Analysis, ANIK would score 0 for this criteria.

Operating Cashflow are higher than Netincome?

This criterion examines whether the company's operating cash flow is higher than its net income. This is important because it indicates that the company is generating enough cash from its core operations to cover its net income, suggesting financial robustness.

For the fiscal year of 2023, Anika Therapeutics reported an operating cash flow of -$1,788,000 and a net income of -$82,667,000. As the operating cash flow is higher than the net income, albeit both being negative, this meets the criterion set by the Piotroski Analysis. Consequently, this awards Anika Therapeutics a score of 1 for this criterion. Historical data displays a similar, generally positive pattern, with operating cash flow consistently surpassing net income from 2003 until a reversal in 2019 and subsequent years, notable for substantial declines in net income post-2020. This recent reversal is typically bad from a sustainability standpoint, but the provided criterion explicitly considers operating cash flow exceeding net income as a benchmark without judging the overall health of the numbers.

Liquidity of Anika Therapeutics (ANIK)

Leverage is declining?

The criterion assesses if the company's leverage has decreased year-over-year. Lower leverage indicates decreased financial risk.

In 2022, Anika Therapeutics (ANIK) had a leverage ratio of 0.0825. However, in 2023, this ratio increased to 0.0994, indicating that the company has taken on more debt relative to its equity. Over the last 20 years, the leverage ratio has experienced fluctuations, with significant drops observed between 2009 (0.0869) and 2010 (0.0723) and between 2020 (0.0571) and 2021 (0.0554). The recent increase raises concerns regarding the company's financial stability. Hence, Anika Therapeutics does not qualify for a point in this criterion.

Current Ratio is growing?

The Current Ratio is a liquidity ratio that measures a company's ability to pay short-term obligations.

Anika Therapeutics' Current Ratio decreased from 6.0739 in 2022 to 5.258 in 2023. This indicates a slight decline in liquidity. However, it is still above the industry median Current Ratio of 5.7831 in 2023. Despite the decline, Anika Therapeutics maintains a solid liquidity position relative to the industry, as it has a long-term trend of maintaining Current Ratios well above the industry median. This suggests that while the year-over-year decrease is noteworthy, Anika Therapeutics is still in a relatively strong liquidity position. Historically, the company has seen fluctuations in its Current Ratio, with lowest points observed in 2009 (3.0121) and 2010 (2.9077) compared to industry medians.

Number of shares not diluted?

Change in shares outstanding reflects dilution or buyback activities; a decrease is preferred as it indicates a buyback, reducing shares and potentially increasing EPS.

Analyzing the outstanding shares over the last 20 years for Anika Therapeutics (ANIK), it's clear that the number of shares increased significantly, particularly during certain periods—the shares went from 10.8 million in 2003 to a notable high of 15.2 million in 2014. The trend suggests varying capital activities, and given the drastic change to 0 in 2023 from 14.6 million in 2022, it implies a significant conversion or consolidation, possibly a reverse stock split. Because the outstanding shares did not decrease in 2023, it would not add a point based on the Piotroski criterion.

Operating of Anika Therapeutics (ANIK)

Cross Margin is growing?

The criterion assesses the change in gross margin, which measures the efficiency of a company in managing its production costs relative to its revenues.

For Anika Therapeutics (ANIK), the gross margin increased from 0.5989 in 2022 to 0.6185 in 2023, marking an improvement. This indicates that the company has become slightly better at managing its production costs relative to its revenues. The 0.6185 gross margin in 2023 is also above the 20-year industry median of 0.4518. Given the gross margin has increased and is significantly above the industry median, this trend is favorable. Over the last two decades, the company's gross margin peaked at an impressive 0.8018 in 2014, which was considerably higher than the industry’s 0.8259 during the same year, indicating strong historical performance as well. Therefore, for this criterion, ANIK receives 1 point.

Asset Turnover Ratio is growing?

The asset turnover criterion assesses how efficiently a company uses its assets to generate sales. A higher ratio indicates better efficiency and performance.

The asset turnover ratio for Anika Therapeutics has increased from 0.4485 in 2022 to 0.5378 in 2023, demonstrating improved operational efficiency. This positive trend adds 1 point for this criterion. Historically, the 2023 level represents the highest efficiency observed over the last 20 years, further underlining the company’s enhanced performance. Maintaining this upward trajectory is crucial for sustained profitability and competitiveness in the biotech sector.