Last update on 2024-06-07

Atrion (ATRI) - Piotroski F-Score Analysis for Year 2023 (Final Score: 6/9)

Atrion (ATRI) Piotroski F-Score for 2023 is 6/9. Discover financial strength via profitability, liquidity, and efficiency analysis.

Short Analysis - Piotroski Score: 6

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

Atrion, under the Piotroski 9-criteria scoring system, scored a 6 out of 9. The analysis showed that Atrion is profitable with a positive net income and cash flow from operations for 2023. Additionally, Atrion has an impressive current ratio and has slightly reduced its number of shares outstanding, indicating good liquidity and operational health. However, there are some concerns: return on assets and gross margin have decreased, and asset turnover ratio has declined, indicating inefficiency in asset usage and potential struggles in profit maximization. The leverage remained constant at zero, showing low financial risk, while the comparison with industry medians shows Atrion's results as mixed in terms of profitability and efficiency over time.

Insights for Value Investors Seeking Stable Income

Based on the Piotroski score and the detailed analysis, Atrion seems to have a solid financial position with notable strengths in liquidity and profitability and no significant leverage concerns. However, the decrease in return on assets, gross margin, and asset turnover ratio raises red flags about efficiency and long-term growth potential. As an investor, it might be worth considering Atrion for its stability and low financial risk, but one should closely monitor the company's asset efficiency and revenue generation strategies before committing to substantial investments. Overall, it could be a stock to keep an eye on rather than make immediate, large-scale investments.

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

Profitability of Atrion (ATRI)

Company has a positive net income?

Net income is the profit left after all expenses have been deducted from revenue. It indicates the firm's profitability.

For Atrion (ATRI), the net income in 2023 is $19,411,000, which is positive. This suggests that the company remains profitable for the year 2023. Historically, the company has experienced variations in net income over the past 20 years, with a peak at $36,593,000 in 2017 and a low at $5,057,000 in 2003. The positive net income for 2023 represents continued profitability despite the dip from higher values in previous years, earning the company 1 point in the Piotroski score.

Company has a positive cash flow?

Cash Flow from Operations (CFO) is the cash generated from the normal operating activities of a company and is a key indicator of a company’s financial health and efficiency.

For Atrion (ATRI), the CFO in 2023 was $20,006,000, indicating it is positive. Assessing the last 20 years, CFO data shows fluctuations with a peak in 2014 ($40,427,000) and a consistent positive trend overall. The positive CFO in 2023 is favorable, earning a full point for ATRI in this criterion. However, compared to historical data, CFO has declined to its lowest in over 20 years, which might raise concerns about future sustainability and profit maximization strategies.

Return on Assets (ROA) are growing?

Change in Return on Assets (ROA) from one period to another is crucial as it highlights the efficiency of a company's management in generating profit from its assets over time.

Comparing Atrion's ROA, we see a decline from 0.1316 in 2022 to 0.0739 in 2023. Therefore, it will not earn a point for this criterion. A decreasing ROA indicates reduced efficiency in utilizing assets to generate profit. Historically, Atrion's ROA has fluctuated but the recent dip is substantial, especially when considering the industry's median ROA of 0.5657 in 2023. This showcases Atrion's comparatively inefficient asset utilization and could be a red flag for potential investors.

Operating Cashflow are higher than Netincome?

Evaluating the criterion of having a higher operating cash flow (OCF) than net income, particularly for Atrion (ATRI). The OCF is an indicator of the company's ability to generate cash from operations, which is important for sustainability and growth.

For 2023, Atrion's Operating Cash Flow (OCF) is $20,006,000, which is higher than its Net Income of $19,411,000. This yields a score of 1 for this criterion. Historically, this has been a vital metric, as higher OCF than net income typically indicates better earnings quality. This trend has been fluctuating over the last 20 years, with several periods where OCF significantly outpaced net income, and this year conforms to this positive trend. However, this situation does show potential concerns about substantial non-cash expenses or changes in working capital.

Liquidity of Atrion (ATRI)

Leverage is declining?

Change in leverage refers to the variation in company's use of debt financing relative to equity. It is essential in assessing financial risk.

Examining the data from 2022 and 2023, it is noted that Atrion's leverage remained constant at 0 during these two years, and thus technically, it neither increased nor decreased. However, a historical comparison from the past 20 years shows a consistent leverage of 0 since 2007. Given this stability, neither a point is added nor subtracted for leverage under the Piotroski analysis, reflecting a well-maintained low-risk debt strategy. This can be positive for the company as it indicates low financial risk or dependency on debt.

Current Ratio is growing?

Current Ratio is a liquidity ratio that measures a company's ability to pay short-term and long-term obligations. It compares the company’s current assets to its current liabilities, offering insight into the efficiency of a company's operating cycle. Generally, a higher current ratio indicates a stronger liquidity position, showing that the company can cover its current liabilities with its current assets.

As per the provided data, Atrion (ATRI) saw its Current Ratio increase from 6.5972 in 2022 to 9.0932 in 2023. This represents a significant improvement in the company's liquidity position, earning 1 point under Piotroski Analysis. Comparing this trend with the industry median current ratio values, which hovered around the range of 2.3418 in 2023, Atrion stands out with a substantially stronger liquidity status. Historically, Atrion's current ratio has consistently outperformed the industry median, offering reassurance in the company's ability to manage short-term obligations effectively. This trend is a positive indicator for investors, reflecting financial stability and operational efficiency.

Number of shares not diluted?

Change in Shares Outstanding evaluates whether a company has diluted equity by issuing more shares or bought back shares. Lower shares outstanding is generally positive.

In 2023, Atrion had 1,761,000 shares outstanding, down from 1,787,000 in 2022. This decrease earns 1 point by the Piotroski Score. Previously, Atrion shows a steady long-term downtrend: 1,839,000 (2003) to 1,761,000 (2023). This suggests sustained shareholder value.

Operating of Atrion (ATRI)

Cross Margin is growing?

Gross Margin measures the proportion of revenue that exceeds the cost of goods sold. A higher Gross Margin indicates efficient production and cost control.

Atrion's Gross Margin decreased from 0.4136 in 2022 to 0.3684 in 2023, resulting in a 0.0452 drop. This trend indicates a reduction in profitability and cost efficiency, adding 0 points for this criterion. When compared to the industry median Gross Margin of 0.5549 in 2023, Atrion's 0.3684 demonstrates considerable underperformance.

Asset Turnover Ratio is growing?

The Asset Turnover ratio measures the efficiency of a company's use of its assets to generate sales revenue.

The Asset Turnover for Atrion (ATRI) decreased from 0.6899 in 2022 to 0.6444 in 2023. This decline suggests ATRI was less efficient in using its assets to generate revenue in 2023 compared to 2022. Historical data shows a general downward trend over the past 20 years, peaking at 1.0393 in 2003 and reaching its lowest at 0.6444 in 2023. A declining Asset Turnover indicates potential operational inefficiencies or a less aggressive revenue generation strategy. Thus, ATRI scores 0 under this criterion.