Last update on 2024-06-07

Gecina Nom (GI6A.F) - Piotroski F-Score Analysis for Year 2023 (Final Score: 5/9)

Gecina Nom (GI6A.F) scores 5/9 in the 2023 Piotroski F-Score Analysis, highlighting mixed financial health and operational efficiency.

Short Analysis - Piotroski Score: 5

We're running Gecina Nom (GI6A.F) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

The analysis of Gecina Nom (GI6A.F) using the Piotroski 9-criteria scoring system shows that the company has a mixed financial health profile with a Piotroski score of 5 out of 9. The company's profitability shows inconsistency with a negative net income in 2023. However, its strong operating cash flow and a positive current ratio highlight good short-term financial management. The leverage has increased, which indicates higher financial risk, and the gross margin has decreased, showing reduced efficiency in covering production costs.

Insights for Value Investors Seeking Stable Income

Given the Piotroski score of 5, Gecina Nom's financial performance is somewhat average. It shows potential with positive cash flows and good current ratio improvements. However, the negative net income, increased leverage, and reduced gross margin are concerning. As an investor, it might be worth observing the company's future financial strategies and improvements before making a full investment. Research into the reasons behind its mixed profitability and leverage increase is necessary. A moderate approach would be to consider it for a diversified portfolio but not as a primary investment.

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

Profitability of Gecina Nom (GI6A.F)

Company has a positive net income?

Net income is the amount of profit a company has after accounting for all expenses and taxes. It is important because it shows the company's profitability.

The latest net income for Gecina Nom (GI6A.F) in 2023 is -1,787,184,000, which is negative. According to the Piotroski Analysis, a negative net income results in 0 points. Historically, Gecina Nom has experienced fluctuating net income, with significant positive values in many years but notable negative performances in 2008 and 2009, similar to 2023. Despite positive trends in recent years (e.g., 849,292,000 in 2021 and 169,583,000 in 2022), the drastic drop in 2023 highlights the company’s inconsistent profitability. As such, the score remains 0 this year, reflecting potential concerns for investors relying on steady profits.

Company has a positive cash flow?

Cash Flow from Operations (CFO) indicates the cash a company generates from its normal business operations. A positive CFO is important as it suggests that the company is capable of generating sufficient cash to maintain and grow its operations without depending on external financing.

The CFO for Gecina Nom in 2023 is €534,973,000 which is positive, resulting in an addition of 1 point for this criterion. Over the past 20 years, the company has consistently maintained a positive CFO which shows strong operational efficiency and cash management capabilities. Significant jumps can be observed in certain years, like 2007 (€476,534,000) and 2019 (€620,346,000), indicating periods of exceptionally robust performance. This sustained positive trend reflects the firm's ongoing ability to generate cash internally, which is a strong indicator of financial health and operational stability.

Return on Assets (ROA) are growing?

The Change in Return on Assets (ROA) assesses the company's profitability relative to its total assets, which provides an indicator of how efficiently the company is using its assets to generate profit.

In evaluating Gecina Nom (GI6A.F), the ROA dropped from 0.0082 in 2022 to -0.0933 in 2023, resulting in a score of 0 for this criterion. This decline is concerning, as ROA illustrates the efficiency of management in using assets to generate earnings. Compared to the industry median ROA, which has been relatively stable over the past two decades, with values ranging between approximately 0.39 and 0.65, Gecina's latest ROA underperforms significantly. This discrepancy suggests inefficiencies or challenges in Gecina's operational strategies.

Operating Cashflow are higher than Netincome?

Operating Cash Flow higher than Net Income is a measure of a company's earning quality supported by actual cash being generated.

In 2023, Gecina Nom's operating cash flow stood at €534.97 million, while its net income was a negative €1.78 billion. Clearly, the operating cash flow exceeds net income, earning it 1 point on the Piotroski scale. This is deemed positive as it indicates that despite generating a net loss, the company is able to convert its business operations into actual cash, suggesting a potential divergence caused by non-cash expenses or one-time charges.

Liquidity of Gecina Nom (GI6A.F)

Leverage is declining?

Change in leverage measures the alteration in a company's financial leverage compared to a previous period. It's vital as it affects the company’s risk and capital structure.

The leverage ratio for Gecina Nom (GI6A.F) has increased from 0.2586 in 2022 to 0.3306 in 2023. This indicates that the company's use of debt relative to its equity has grown. Historically, leverage ratios show fluctuations, yet maintaining a sensible balance is crucial for financial health. The increasing leverage in 2023 suggests a higher risk profile due to more debt usage. Hence, no point is added for this criterion because the leverage has increased rather than decreased.

Current Ratio is growing?

The Current Ratio measures a company's ability to pay short-term obligations with its current assets.

The Current Ratio improved from 0.1781 in 2022 to 0.4747 in 2023, resulting in a better liquidity position. Although the ratio is still below the industry median of 0.7672 in 2023, the substantial improvement gives confidence in Gecina Nom's enhancement of its short-term financial stability.Thus, adding 1 point is warranted.

Number of shares not diluted?

Change in shares outstanding is a criterion in Piotroski analysis and assesses whether the company has issued new shares. A decrease in outstanding shares indicates that the company has possibly bought back shares, which is usually a positive sign for investors.

Gecina Nom's outstanding shares data indicated a significant discrepancy between 2022 and 2023. In 2022, Gecina Nom had 73,763,378 outstanding shares, compared to 0 in 2023. Normally, a decrease in outstanding shares is positive as it might indicate share buybacks, increasing shareholder value. However, in this case, no shares in 2023 points to an irregularity or potential delisting or corporate restructuring. Based on conventional Piotroski analysis, the absence of shares would not score a positive point and raises concerns about data accuracy.

Operating of Gecina Nom (GI6A.F)

Cross Margin is growing?

Gross margin represents the percentage of total revenue that the company retains after incurring the direct costs associated with producing the goods and services it sells. It is important to consider because it indicates the core profitability of the company's operations without accounting for indirect costs.

Gross Margin of Gecina Nom (GI6A.F) in 2023 is 0.744, which has decreased compared to 0.7627 in 2022. This declining gross margin implies a diminishing efficiency in covering direct production costs relative to revenue. Notably, comparing this margin to the industry's median of 0.6434 in 2023, Gecina's margin remains above the industry average, suggesting a competitive dominance, despite this year's downturn. Historically, the company had a significantly higher margin (over 0.9) until it experienced volatility from 2009 onwards. Still, its current margin is competitive and adaptive. This trend is unfavorable for this criterion and thus, receives 0 points.

Asset Turnover Ratio is growing?

Explain the criterion for Gecina Nom (GI6A.F) and why it is important to consider

Asset turnover increased from 0.0372 in 2022 to 0.0436 in 2023. This positive trend signifies higher efficiency in utilizing assets to generate revenue. Therefore, this criterion adds 1 point to the Piotroski score.