Last update on 2024-06-07

Fraport (FRA.DE) - Piotroski F-Score Analysis for Year 2023 (Final Score: 8/9)

Fraport (FRA.DE) achieves Piotroski F-Score of 8/9 in 2023, showcasing strong financial health with solid profitability, liquidity, and operational efficiency.

Short Analysis - Piotroski Score: 8

We're running Fraport (FRA.DE) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

Fraport (FRA.DE) achieved a high Piotroski F-Score of 8 out of 9, indicating a strong and improving financial position. This score reflects robust profitability, liquidity, and operating efficiency. Fraport managed positive net income (€393,200,000 in 2023) and a highly positive cash flow from operations (€863.2 million). The company improved its Return on Assets (ROA) and maintained a higher Operating Cash Flow than its Net Income. Additionally, Fraport reduced leverage, increased its current ratio, and increased its asset turnover ratio. However, its gross margin slightly decreased, and there was no change in the number of outstanding shares.

Insights for Value Investors Seeking Stable Income

Based on the analysis, Fraport (FRA.DE) seems like a robust investment opportunity due to its strong financial health and operational improvements. Its high F-Score suggests it's a financially sound and potentially undervalued stock. However, potential investors should consider the slight decline in gross margin and stable share count before making a decision. Overall, it appears worth looking into further for potential investment.

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

Profitability of Fraport (FRA.DE)

Company has a positive net income?

Net income measures a company's total profit or loss and is a critical indicator of financial health. Positive net income is essential for assessing profitability.

The net income of Fraport (FRA.DE) in 2023 is €393,200,000, which is positive. Therefore, we add 1 point. Analyzing the historical data, Fraport has generally maintained positive net income except for difficult years like 2020 during the COVID-19 pandemic (-€657,600,000). The recovery to a €393,200,000 profit by 2023 indicates a strong turnaround, suggesting a robust capacity to bounce back from economic downturns.

Company has a positive cash flow?

Cash Flow from Operations (CFO) indicates the cash a company generates from its typical business operations. This metric is crucial because it provides a real-time picture of how well the company is generating cash internally, without relying on external financing.

Fraport's CFO in 2023 is 863.2 million EUR, which is highly positive. When examining the given historical data, it’s evident that Fraport experienced fluctuations over the past two decades with major hits like a negative CFO in 2020 due to the pandemic. However, the rebound to 863.2 million EUR in 2023 marks a strong recovery and is one of the highest CFO values in the last decade, meriting an addition of 1 point under this Piotroski criterion.

Return on Assets (ROA) are growing?

Change in Return on Assets (ROA) measures the ability of a company to efficiently utilize its assets to generate earnings.

Fraport's ROA has increased from 0.0078 in 2022 to 0.0215 in 2023. This significant increase is a positive trend, indicating improved efficiency in asset utilization. Over the last 20 years, the company has experienced fluctuations, but this recent improvement suggests a recovery and potential for continued growth. Though still below the industry median of 0.3342, the upward movement towards higher ROA is commendable. Considering the challenges faced during the pandemic, this rise is particularly encouraging. Hence, we add 1 point for this criterion.

Operating Cashflow are higher than Netincome?

Operating Cash Flow higher than Net Income: This criterion measures the company's ability to turn its net income into cash from operations. A higher operating cash flow indicates strong cash generation capabilities, supporting sustainability and liquidity.

For Fraport (FRA.DE) in 2023, the Operating Cash Flow stands at €863,200,000, while the Net Income is €393,200,000. Since the Operating Cash Flow is indeed higher than the Net Income, Fraport meets this criterion and earns 1 point. This trend is broadly positive, suggesting effective cash generation and efficient operations, capable of supporting sustainable growth. The additional information provided over the past 20 years highlights the consistent ability of Fraport to convert its income into cash. In particular, the years where operating cash flow has outpaced net income (e.g., 2018, 2019) correlate with periods of marked operational strength. Over this period, the accruals have generally remained stable, aligned with healthy cash flow metrics, fostering a solid financial foundation.

Liquidity of Fraport (FRA.DE)

Leverage is declining?

Change in leverage examines how a company is managing its debt obligations, crucial for assessing financial risk.

Comparing 0.0093 in 2022 to 0.007 in 2023, Fraport's leverage has decreased. Reducing leverage indicates better management of debt, a positive trend, hence adding 1 point. Historically, Fraport's leverage fluctuated significantly, peaking in 2014 at 0.4469 and trending downward ever since, showing continuous improvement in managing financial risk.

Current Ratio is growing?

Assessing changes in the current ratio is vital as it indicates a company's liquidity condition and ability to cover short-term obligations. An improvement is typically seen positively by investors.

The current ratio for Fraport (FRA.DE) has increased from 1.44 in 2022 to 1.4873 in 2023. This marks an improvement in the company's liquidity position. Comparing the ratio over the last 20 years, the current ratio has shown substantial fluctuation, exhibiting a significant surge in 2020 up to 2.1796 but generally remaining closer to 1.5 in other years. This increase slightly surpasses the industry's median current ratio of 1.7619 in 2023, presenting a moderately stronger liquidity buffer compared to its own historical trend, thus scoring 1 point for this criterion.

Number of shares not diluted?

Change in Shares Outstanding for Fraport (FRA.DE) entails assessing the trend in the number of outstanding shares to determine if shares were issued or bought back. A decrease is generally positive as it indicates company is buying back shares, potentially a sign of strength.

Upon examining Fraport's data, the outstanding shares remained constant at 92,391,339 from 2022 to 2023. This stability suggests no new shares were issued nor were any shares repurchased. As a result, for the Piotroski analysis, this criterion receives 0 points. Historical data further corroborates stability with minor fluctuations over 20 years. The decision implies that Fraport maintained shareholder equity, but the ideal scenario would be a reduction in outstanding shares to signal increased company value.

Operating of Fraport (FRA.DE)

Cross Margin is growing?

Comparing Gross Margin year-over-year identifies whether a company's profitability from its core operations is improving. An increase signifies better cost management and operational efficiency.

Fraport's Gross Margin has decreased from 0.2582 in 2022 to 0.2578 in 2023. This slight reduction indicates that the company could not substantially improve its cost management or pricing strategy. Relative to the industry median Gross Margin of 0.3342 in 2023, Fraport's figure appears lower, signaling potential competitive disadvantages in operational efficiency.

Asset Turnover Ratio is growing?

The asset turnover ratio measures the efficiency of a company's use of its assets in generating sales revenue.

In 2023, Fraport's (FRA.DE) asset turnover ratio stood at 0.2192, up from 0.1888 in 2022. This increase is a positive trend, indicating that the company is utilizing its assets more effectively to generate sales. Historically, Fraport's asset turnover fluctuated, peaking at 0.52 in 2006 and hitting a low of 0.1256 in 2020 amid the pandemic. The improvement from 2022 to 2023 suggests a recovery post-COVID-19. Consequently, Fraport earns a score of 1 in this Piotroski criterion.