Last update on 2024-06-07

Commercial Vehicle Group (CVGI) - Piotroski F-Score Analysis for Year 2023 (Final Score: 8/9)

Detailed Piotroski F-Score analysis of Commercial Vehicle Group (CVGI) for 2023 reveals a strong financial position with a score of 8/9.

Short Analysis - Piotroski Score: 8

We're running Commercial Vehicle Group (CVGI) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

Commercial Vehicle Group (CVGI) has a Piotroski F-Score of 8, indicating a relatively strong financial position. The analysis covers profitability, liquidity, and operating efficiency based on 9 criteria: - Profitability: CVGI had a positive net income of $49,411,000 in 2023, a positive CFO of $38,276,000, and an improved ROA. However, cash flow from operations was less than net income, which did not merit a point. - Liquidity: Although leverage increased from 0.3117 to 0.3422, the current ratio improved from 1.9312 to 2.2573. There was an anomaly regarding the number of outstanding shares. - Operating Efficiency: The gross margin improved from 0.0881 to 0.1344, and the asset turnover ratio rose from 2.0073 to 2.0864.

Insights for Value Investors Seeking Stable Income

With a high Piotroski F-Score of 8, Commercial Vehicle Group (CVGI) appears to be in a strong financial position, making it potentially worth further investigation for investment. However, investors should be cautious about the increase in leverage and investigate the anomaly regarding outstanding shares.

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

Profitability of Commercial Vehicle Group (CVGI)

Company has a positive net income?

Net income measures a company's profitability, with positive net income indicating profit and negative reflecting a loss. It's crucial for financial health.

For 2023, Commercial Vehicle Group (CVGI) reported a net income of $49,411,000. This is a positive figure. Over the past 20 years, CVGI has experienced several fluctuations in its net income, having faced several years (2007, 2008, 2009, 2013, 2017, 2020, and 2022) where it reported a loss. Notably, 2023 marks a significant recovery from 2022's loss of $21,971,000, indicating potential improvement in operational performance, thus meriting a positive evaluation and awarding 1 point in the Piotroski score for net income.

Company has a positive cash flow?

Cash Flow from Operations (CFO) assesses whether a company is generating adequate cash flows to sustain and grow its operations, which is crucial for long-term viability.

The CFO for Commercial Vehicle Group (CVGI) in 2023 stands at $38,276,000, which is positive, leading to an allocation of 1 point in the Piotroski Analysis. Analyzing the historical chart, CVGI has experienced fluctuations in its CFO, but positive figures in most of the recent years indicate healthy operational cash flow. Over the past 20 years, CVGI's operating cash flow has generally shown an upward trend with only a few years reflecting negative values. Therefore, the positive CFO in 2023 is a favorable sign, suggesting that the company's core operations are generating sufficient cash to support business activities and potential growth opportunities.

Return on Assets (ROA) are growing?

Return on Assets (ROA) indicates how efficiently a company is using its assets to generate profit, and is pivotal in assessing financial health.

Commercial Vehicle Group (CVGI) experienced a notable improvement in its ROA, rising from -0.0449 in 2022 to 0.1036 in 2023. This solid positive shift is significant, as it illustrates that CVGI has radically improved its utilization of assets to generate profits. Previously in 2022, the company was having losses relative to its assets, but in 2023, it managed to turn this around, forging a healthier financial trajectory and implying enhanced operational efficiency. This trend is commendable as it indicates recovering profitability and improved managerial acumen. Given the criteria of the Piotroski Score, this positive change in ROA indeed merits adding 1 point.

Operating Cashflow are higher than Netincome?

The criterion compares operating cash flow to net income to assess financial health by evaluating if the core operations are generating enough cash. A higher operating cash flow than net income suggests solid cash generation.

In 2023, Commercial Vehicle Group (CVGI) reported an operating cash flow of $38,276,000 and a net income of $49,411,000. Since the operating cash flow is lower than the net income, it fails to meet this specific criterion of the Piotroski analysis, thus earning a zero. Historically, CVGI's operating cash flow has seldom exceeded or met net income, indicating potential inconsistencies in cash generation from its core operations. For example, net income could shoot up due to one-time gains or accounting adjustments, whereas cash flow remains tied to actual operations. For investors, this trend might signal that the company relies significantly on non-operational sources of income to boost its bottom line.

Liquidity of Commercial Vehicle Group (CVGI)

Leverage is declining?

Change in leverage ratios evaluates how a company manages its debt levels. Lower leverage is favorable as it suggests reduced financial risk.

The leverage for Commercial Vehicle Group (CVGI) has increased from 0.3117 in 2023 compared to 0.3422 in 2022, leading to a 0.0305 point increase in the leverage ratio. This is not favorable as it indicates a rising reliance on debt. A historical review reveals years of fluctuating leverage with peaks and troughs, notably a high leverage of 0.6493 in 2009 and lower subsequent years. The latest increase breaks a declining trend observed from 2016 onwards, posing a concern for investors.

Current Ratio is growing?

Current Ratio measures a company's ability to cover its short-term liabilities with its short-term assets.

Commercial Vehicle Group's (CVGI) Current Ratio increased from 1.9312 in 2022 to 2.2573 in 2023. This shows an improvement in the company's liquidity position. Over the last 20 years, CVGI's Current Ratio has generally trended above the industry median. This increase adds 1 point to CVGI's Piotroski score.

Number of shares not diluted?

Change in Shares Outstanding compares the number of shares currently available from one period to another.

Examining Commercial Vehicle Group (CVGI), the outstanding shares stood at 32,334,000 in 2022 and unexpectedly dropped to 0 in 2023. This is a highly irregular scenario, typically indicative of a reporting or data anomaly rather than an actual reduction in shares. Historically, from 2003 to 2022, CVGI's outstanding shares had shown a general upward trajectory, reflecting periodic equity issuances. We should score this criterion at 0 due to the increase and note the anomaly for further investigation.

Operating of Commercial Vehicle Group (CVGI)

Cross Margin is growing?

Gross margin is a financial metric that measures the financial health and efficiency of a company by showing the portion of revenue that exceeds the cost of goods sold (COGS).

Comparing the Gross Margin of Commercial Vehicle Group (CVGI), which increased from 0.0881 in 2022 to 0.1344 in 2023, indicates a positive trend. The increase in Gross Margin by approximately 52.57% in 2023 suggests improved efficiency in managing production costs relative to revenues. Historically, CVGI's Gross Margin fluctuated considerably over the past 20 years, reaching as high as 0.186 in 2004 and a low of 0.0211 in 2009. While the industry's median gross margin in 2023 stands at 0.196, CVGI's 0.1344 shows it still lags behind the industry but is moving towards an upward trajectory. This improvement in the gross margin should contribute to a favorable assessment in this specific Piotroski criterion, garnering a score of 1 point.

Asset Turnover Ratio is growing?

Asset Turnover is a measure of a firm's efficiency in using its assets to generate sales. It's calculated as sales divided by total assets.

The Asset Turnover for Commercial Vehicle Group (CVGI) has increased from 2.0073 in 2022 to 2.0864 in 2023. This increase is a positive trend, earning 1 point in the Piotroski F-Score. Historically, CVGI's Asset Turnover has been fluctuating, peaking at 2.4009 in 2011 and hitting a low of 1.1712 in 2007. The current level is the highest since 2018 (2.2373). This suggests an improvement in how effectively the company is utilizing its assets to generate revenue.