Last update on 2024-06-07

Century Casinos (CNTY) - Piotroski F-Score Analysis for Year 2023 (Final Score: 3/9)

Century Casinos (CNTY) Piotroski F-Score Analysis for 2023 results in a score of 3/9, examining profitability, liquidity, and operating efficiency.

Short Analysis - Piotroski Score: 3

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

Century Casinos (CNTY) received a Piotroski F-Score of 3 out of 9, indicating a relatively weak financial position. The company showed strengths in its positive cash flow from operations and favorable operating cash flow compared to net income, suggesting good operational performance. However, major weaknesses include significant net losses, declining return on assets, increasing leverage, and a shrinking current ratio. Furthermore, the increased number of shares outstanding and decreasing gross margin and asset turnover ratio highlight operational and financial challenges.

Insights for Value Investors Seeking Stable Income

Based on the Piotroski F-Score analysis, Century Casinos (CNTY) appears to have significant financial challenges that could affect its attractiveness as an investment. While the company demonstrates strong cash flow management, other critical areas such as profitability, leverage, and operational efficiency show worrying trends. Potential investors should be cautious and delve deeper into whether the company can address these challenges. It may be wise to consider other investment opportunities unless compelling evidence suggests a turnaround.

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

Profitability of Century Casinos (CNTY)

Company has a positive net income?

Net income represents a company's total earnings or profit and is a key indicator of its financial health.

Century Casinos (CNTY) reported a net income of -28,198,000 in 2023, marking a significant downturn from a profit of $7,976,000 in 2021. The negative trend began in the onset of the COVID-19 pandemic in 2020 and has since been fluctuating, showing inconsistencies in profitability. Over the past two decades, CNTY has shown profits in 15 years, while enduring losses in the remaining five years, suggesting a cyclical pattern in its earnings. Given the reported negative net income, this criterion scores 0 points.

Company has a positive cash flow?

Positive Cash Flow from Operations (CFO) indicates a company's ability to generate sufficient revenue to cover its expenses and fund its operations.

For Century Casinos (CNTY) in 2023, the CFO is $24,055,000, which is positive. This is good as it suggests strong operational performance. Over the last 20 years, CNTY's CFO has fluctuated, but the overall trend has been upward. Strong years include 2021 with $37,397,000 and 2019 with $59,190,000. This positive trend supports the idea that CNTY's operations are increasingly effective at generating cash.

Return on Assets (ROA) are growing?

Change in Return on Assets (ROA) provides insight into a company’s efficiency in generating profit from its assets. It's a crucial indicator of operational performance.

The Return on Assets (ROA) for Century Casinos (CNTY) decreased from 0.01 in 2022 to -0.0251 in 2023. This suggests a significant decline in asset profitability, indicating inefficiency in utilizing company assets for generating income. The company's 2023 ROA also starkly contrasts with the industry median ROA of 0.4982, reflecting its underperformance relative to industry peers. Therefore, zero points are added in Piotroski’s analysis due to this negative trend in ROA.

Operating Cashflow are higher than Netincome?

The criterion involves assessing whether a company's operating cash flow is higher than its net income, reflecting operational efficiency.

Century Casinos (CNTY) presents an intriguing case where its operating cash flow for 2023 stands at $24,055,000, in stark contrast to its net income of -$28,198,000. The significant disparity suggests that despite a net loss on the income statement, the firm's core operations still managed to generate positive cash flow. This trend provides a glimpse into the company's substantial non-cash expenses and adjustments that affect its net income. Favorably, having higher operating cash flow than net income is a positive indicator of CNTY's operational robustness. Thus, it warrants a full point in Piotroski's F-Score analysis, signifying commendable cash-generating efficiency amidst accounting challenges.

Liquidity of Century Casinos (CNTY)

Leverage is declining?

Change in leverage measures how much a company is dependent on debt to finance its operations and growth. It's calculated as the ratio of total debt to total assets.

In 2022, the leverage for Century Casinos (CNTY) was 0.7408, which increased slightly to 0.7417 in 2023. This marginal increase indicates a higher reliance on debt financing. Compared to the historical data of the last 20 years, CNTY's leverage has substantially increased since 2018, indicating a shift towards more debt-financed operations. Leverage peaking above 0.7 suggests a heightened risk profile, making the company more susceptible to financial distress during economic downturns. Therefore, according to the Piotroski F-score criterion, the leverage position is weak for 2023, warranting a score of 0.

Current Ratio is growing?

The Current Ratio measures a company's ability to pay short-term liabilities with short-term assets. It's a crucial liquidity indicator.

Century Casinos' Current Ratio decreased from 3.4858 in 2022 to 2.2113 in 2023. While it signifies a decline, the company still maintains a stronger liquidity position compared to the industry median, which stands at 1.3064 in 2023. Despite the decline, the firm's Current Ratio exceeds the industry's median, indicating better short-term financial health relative to its peers. However, due to the decrease from the previous year, this trend is not favorable, thus no point is added.

Number of shares not diluted?

Change in shares outstanding is important as it directly affects earnings per share and ownership percentage. If shares decreased, 1 point is added.

Analyzing the shares of Century Casinos (CNTY), we observe a dramatic change from 29,809,000 shares in 2022 to 0 shares in 2023. This indicates a significant increase, leading to a score of 0 for this criterion. Historically, shares have fluctuated, but they have never dropped to such an extent. This drastic increase in shares can be seen as negative because it dilutes the ownership percentage of existing shareholders. Over the past 20 years, shares have generally increased, but this year's leap to an infinite number due to misreporting or corporate restructuring skews any reasonable financial analysis.

Operating of Century Casinos (CNTY)

Cross Margin is growing?

Change in Gross Margin is a key indicator of operational efficiency. An increasing gross margin suggests the company is generating more profit from its sales after accounting for direct costs. It reflects better management of production or service costs and can suggest pricing power and competitive advantage.

Comparing the data for Century Casinos (CNTY) over the last 20 years, the Gross Margin decreased from 0.4596 in 2022 to 0.4413 in 2023, marking a change of -0.0183. This decrease results in a score of 0 in this Piotroski criterion. Notably, Century Casinos' Gross Margin has been historically volatile, with its peak at 0.6056 in 2003 and continuously fluctuating since. Despite the company's efforts to tighten operational efficiencies over the years, CNTY's Gross Margin remains somewhat below the industry median of 0.4982 for 2023. This indicates that operating performance somewhat lags behind broader industry performance, suggesting areas for cost management improvement and strategic focus to enhance profitability.

Asset Turnover Ratio is growing?

The change in asset turnover ratio indicates how effectively a company is utilizing its assets to generate sales. An increasing ratio generally signifies improved efficiency and operational performance. Conversely, a decreasing ratio may indicate inefficiencies.

For Century Casinos (CNTY), the asset turnover ratio has decreased from 0.5421 in 2022 to 0.4902 in 2023. This decline, despite the company's historic fluctuations, suggests a period of reduced efficiency. Historically, since 2003, the asset turnover ratio has varied significantly, with high points at 0.7178 in 2015 and low points at 0.3048 in 2008. The current decrease merits attention and results in a score of 0 according to the Piotroski criteria, indicating potential areas for improvement in asset utilization.