Last update on 2024-06-07

Astronics (ATRO) - Piotroski F-Score Analysis for Year 2023 (Final Score: 5/9)

Astronics (ATRO) Piotroski F-Score of 5/9 in 2023 shows moderate financial health. Learn more about their profitability, liquidity, and operating efficiency.

Short Analysis - Piotroski Score: 5

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

The Piotroski F-Score, ranging from 0 to 9, assesses a company's financial health based on profitability, liquidity, and operating efficiency. Astronics (ATRO) scored a 5 out of 9 using this method, suggesting it has average financial health. Among the specific criteria: Profitability: ATRO currently isn't profitable with negative net income and cash flow from operations. However, it shows an improvement in Return on Assets (ROA) and has operating cash flow greater than net income, earning some points here. Liquidity: Its current ratio has improved, indicating better short-term financial stability. But ATRO's leverage has increased, which is risky, and its number of outstanding shares has grown, suggesting potential dilution of investor value. Operating Efficiency: Astronics has improved its gross margin and asset turnover ratio, signaling better efficiency and financial management.

Insights for Value Investors Seeking Stable Income

Astronics (ATRO) has financial areas showing both strength and weaknesses. While its improvements in ROA, current ratio, gross margin, and asset turnover are promising, the company faces challenges with profitability, negative cash flows, higher leverage, and share dilution. If you're considering investing, it might be worth further investigation to understand their recovery plans and potential risks. Diversifying your investment or waiting for improved financial results could be prudent.

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

Profitability of Astronics (ATRO)

Company has a positive net income?

Net income is critical in determining profitability. A positive net income means the company is profitable, while a negative net income indicates losses.

The net income for Astronics (ATRO) in 2023 is -$26,421,000, which is negative. Therefore, it does not score a point for this criterion. The trend over the last 20 years shows fluctuating net income values with significant losses in years 2020, 2021, 2022, and 2023 after a peak income in 2015 of $66,974,000. This negative net income is unfavorable and suggests financial challenges.

Company has a positive cash flow?

Check if CFO -23950000 in 2023 are postive or negativ. If the CFO is postive add 1 point if not set it to 0.

The Cash Flow from Operations (CFO) for Astronics (ATRO) in 2023 is negative, with a figure of -$23,950,000. Examining the CFO trend over the last 20 years, it's evident that the company has recently experienced challenges in generating positive operational cash flow. While there were peaks in CFO around 2013 with $99,874,000 and solid positive figures in subsequent years, the downward trend starting from 2018 culminates in a starkly negative CFO for 2023. This negative trend is detrimental for the criteria at hand. Thus, in terms of Piotroski analysis, Astronics gets 0 points for CFO.

Return on Assets (ROA) are growing?

The change in Return on Assets (ROA) measures how well a company is generating profit from its assets. Upward trends in ROA are indicators of improving efficiency.

For Astronics (ATRO), the ROA increased from -0.0584 in 2022 to -0.0423 in 2023, which indicates a positive trend. Hence, a point is added, bringing the score for this criterion to 1. Although still in negative territory, the trend is indeed positive as the loss is narrowing. Notably, when compared to the industry median ROA, which fluctuated around 0.25 over the last 20 years, Astronics underperformed significantly. Couple this with the data on operating cash flow, the company shows variability, and recent negative trends could indicate underlying operational struggles that need to be addressed.

Operating Cashflow are higher than Netincome?

The criterion of Operating Cash Flow being higher than Net Income is significant as it indicates a company's ability to convert its revenue into actual cash, suggesting efficient operational performance.

In the fiscal year 2023, Astronics (ATRO) had an Operating Cash Flow of -$23.95 million and a Net Income of -$26.42 million. Here, the Operating Cash Flow surpasses Net Income by approximately $2.47 million. Despite both figures being negative, this trend is somewhat useful as it indicates that the company is generating more cash from its operations than what is reported on its income statement. Historically, Astronics has shown fluctuating figures in both categories. For example, in 2019, the company's Operating Cash Flow was positive at $42.69 million, whereas Net Income was also positive at $52.02 million. However, the recent trend since 2020 shows negative values for both metrics. This suggests financial challenges, but the slight advantage of higher Operating Cash Flow over Net Income in 2023 earns it 1 point on this criterion.

Liquidity of Astronics (ATRO)

Leverage is declining?

Evaluate the change in leverage for Astronics (ATRO) from 2022 to 2023 using Piotroski score analysis for a comprehensive financial health check.

The leverage ratio for Astronics (ATRO) increased from 0.2755 in 2022 to 0.2897 in 2023. This represents a minor rise and implies rising financial risk. Considering the 20-year leverage data, the company has experienced fluctuations in its leverage ratios, peaking at 0.4986 in 2014 and generally maintaining lower levels for the last few years. Yet, this uptick from 2022 to 2023 is not favorable in terms of the Piotroski score, as firms are ideally reducing leverage to decrease financial risk. Consequently, no point is awarded for this criterion.

Current Ratio is growing?

The current ratio measures a company's ability to pay short-term obligations with its short-term assets. It's an important liquidity metric.

Astronics (ATRO) has seen an increase in its current ratio from 2.4094 in 2022 to 2.7194 in 2023. This is a favorable trend and earns the company 1 point for this criterion. Evaluating the last 20 years of data, this is slightly above the historical median but still within reasonable fluctuation. It's also interesting to note that in comparison, the industry median current ratio in 2023 is 2.1805, which places Astronics at a competitive advantage regarding short-term liquidity.

Number of shares not diluted?

Shares outstanding refers to the total shares of stock that are currently owned by all shareholders, including share blocks held by institutional investors and restricted shares owned by the company's officers and insiders. It is an important metric because it directly impacts metrics like earnings per share (EPS) and ownership percentages.

In 2022, Astronics had 32,164,000 shares outstanding, and this number increased to 33,104,000 shares in 2023. This means that the outstanding shares increased by 940,000 shares. From a Piotroski Score perspective, a decrease in shares outstanding is favorable, as it can be indicative of share buy-backs which often signal that a company believes in its own growth potential. Since Astronics saw an increase in shares outstanding, it does not fare well by this criterion, receiving a score of 0. Historically, the company's shares outstanding have shown variability, spiking particularly noticeably in 2013 with 27,932,81 shares and reaching a peak in 2023. This trend does not favor long-term shareholders due to dilution of ownership and potential earnings per share.

Operating of Astronics (ATRO)

Cross Margin is growing?

This criterion evaluates if a company is improving its ability to generate gross profit from its sales. An increasing gross margin typically signals better financial health and operational efficiency.

Comparing the Gross Margin for Astronics Corporation (ATRO), we note that it has improved from 0.1337 in 2022 to 0.1753 in 2023. This marks a favorable trend, allocating 1 point for this criterion. The improvement signifies better cost management and potentially stronger pricing power. Over the past 20 years, the company's gross margin has seen significant fluctuations, peaking in 2011 at 0.2651. While the current margin of 0.1753 as of 2023 is higher than the previous year, it is still below the industry median of 0.2484. Therefore, while the trend is promising in the short term, there's room for improvement when benchmarked against industry average.

Asset Turnover Ratio is growing?

Asset Turnover ratio, a measure of efficiency, calculates a firm's sales relative to its assets. High asset turnover suggests efficient use of assets.

Astronics (ATRO) saw an improvement in its Asset Turnover ratio from 0.8739 in 2022 to 1.1038 in 2023. This increase signals enhanced efficiency in the utilization of its assets generate sales. While ATRO's Asset Turnover in 2023 (1.1038) is below the peak of 1.6955 observed in 2007, it shows significant recovery from the dip in 2020 (0.7167) amid the pandemic disruption. Achieving a higher ratio compared to 2022 earns ATRO an additional point under the Piotroski F-Score criteria for this attribute. Consistent gains in asset turnover are favorable, and the firm now seems closer to pre-pandemic performance efficiency levels.