Last update on 2024-06-07

Harvard Bioscience (HBIO) - Piotroski F-Score Analysis for Year 2023 (Final Score: 6/9)

Explore Harvard Bioscience (HBIO) 2023 Piotroski F-Score Analysis. Detailed evaluation reveals a final score of 6/9, highlighting financial performance and efficiency.

Short Analysis - Piotroski Score: 6

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

The Piotroski F-Score is a 0-9 scoring system used to evaluate the financial strength of a company based on nine criteria across profitability, liquidity, and operational efficiency. Harvard Bioscience (HBIO) has a Piotroski score of 6, indicating moderate financial health. While it shows strength in cash flow from operations, improved return on assets, gross margin, and asset turnover, it struggles with negative net income and a declining current ratio. Additionally, there's an increase in shares outstanding, which may dilute stock value.

Insights for Value Investors Seeking Stable Income

Considering Harvard Bioscience's Piotroski score of 6, the company is moderately strong. However, the negative net income and increasing share dilution are concerns. The positive cash flow and increasing ROA are promising, but potential investors should also weigh industry comparisons and trends before investing. It may be worth further investigation to understand the company's strategic plans and financial forecasting.

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

Profitability of Harvard Bioscience (HBIO)

Company has a positive net income?

Net income evaluates a company's profitability and is a crucial indicator of financial health.

In 2023, Harvard Bioscience (HBIO) reported a net income of -$3,415,000, which is negative. Therefore, according to the Piotroski F-Score criteria, we assign 0 points for this metric. Historically, the company's net income has been a mixed bag, demonstrating large fluctuations over the past 20 years, such as the notable -$31.9 million in 2005 and the $19.015 million in 2010. This inconsistency might concern investors and analysts focusing on stable earnings.

Company has a positive cash flow?

Positive cash flow from operations indicates that a company is generating sufficient cash from its regular business operations to maintain and grow its operations.

In 2023, Harvard Bioscience (HBIO) reported a positive Cash Flow from Operations (CFO) of $14,028,000. This is a healthy indicator, demonstrating that the company is generating sufficient cash flow from its core business activities. Historically, HBIO’s CFO has fluctuated significantly over the last 20 years, with lows such as $705,000 in 2015 and highs reaching $16,509,000 in 2009. The $14,028,000 seen in 2023 is one of the highest in the past two decades, showing a robust upward trend and suggesting effective operational efficiency. This aligns with a positive evaluation, earning HBIO 1 point under the Piotroski analysis.

Return on Assets (ROA) are growing?

Change in ROA represents the Return on Assets difference from the previous year. It is essential because it indicates how effectively a company uses its assets to generate profit. For Harvard Bioscience (HBIO), comparing 2023 to 2022 shows financial performance improvements.

In 2022, Harvard Bioscience (HBIO) demonstrated a Return on Assets (ROA) of -0.0619, whereas in 2023, HBIO improved its ROA to -0.0242. This positive change signifies an increase in the company’s efficiency in deploying its assets to generate returns. Therefore, we add 1 point for this criterion, as the ROA improved in 2023 compared to the previous year. While still negative, the trend shows a reduction in the company's losses relative to its assets, which is a favorable sign. Additionally, when we compare HBIO's figures with the Industry Median ROA, which has consistently been positive and significantly higher over the past 20 years, it underscores that the company has substantial room for improvement. Nevertheless, the year-over-year improvement is a good sign and worth acknowledging.

Operating Cashflow are higher than Netincome?

Operating Cash Flow higher than Net Income: This criterion helps in assessing the quality of a company's earnings. High earnings quality is indicated when operating cash flow exceeds net income, suggesting that net income is not inflated.

For 2023, the Operating Cash Flow for Harvard Bioscience (HBIO) stands at $14,028,000, significantly higher than the Net Income of -$3,415,000. This trend is beneficial and underscores strong earnings quality, meriting 1 point in the Piotroski Analysis scoring. This indicates that the company's earnings are not overly reliant on non-cash or potentially manipulative income items. Such disparities have often been observed over the past 20 years, commonly reflecting higher cash flows when compared to reported net income figures. This alignment puts Harvard Bioscience in a positive light for investors focusing on sustainable and high-quality earnings.

Liquidity of Harvard Bioscience (HBIO)

Leverage is declining?

Change in Leverage measures how much debt a company is using to finance its operations compared to its equity. It is crucial because high leverage can indicate potential solvency issues or risk, while low leverage suggests financial stability.

The Leverage ratio of Harvard Bioscience (HBIO) in 2022 was 0.3322, which then decreased to 0.2584 in 2023. This reduction in leverage is a positive indicator as it suggests that the company is reducing its reliance on debt, thereby improving its financial stability. Additional data over the past 20 years indicate that this lower leverage value in 2023 is more in line with its historical average (typically below 0.2) rather than the peaks observed in 2018 (0.3487), 2020 (0.3441), and 2022 (0.3322). Hence, a decreased leverage in 2023 warrants a score of 1 point in the Piotroski score, indicating an improvement in the company's financial leverage management.

Current Ratio is growing?

The current ratio is a measure of a company's ability to pay short-term obligations with its current assets. It is important to consider.

The Current Ratio for Harvard Bioscience (HBIO) has decreased from 2.199 in 2022 to 1.8476 in 2023. This decline indicates that the company has become less capable of covering its short-term liabilities with its current assets, which is generally seen as negative. Over the past 20 years, HBIO's current ratio has fluctuated significantly, peaking in 2011 at 6.0219 and hitting a low in recent years. In comparison, the industry's median current ratio has remained relatively stable, currently at 2.3418. Given the decrease from 2022 to 2023, no point would be added for the current ratio in the Piotroski score, marking it as a negative trend.

Number of shares not diluted?

Change in Shares Outstanding examines the variance in the number of shares issued compared to the prior period.

The outstanding shares of Harvard Bioscience (HBIO) have increased from 41,413,000 in 2022 to 42,420,000 in 2023. This is an increment of 2.42%, which indicates that the company has issued additional shares. Historically, the company has steadily increased its outstanding shares over the last 20 years from approximately 30.7 million shares in 2003 to 42.4 million shares in 2023. This consistent upward trend can indicate growth initiatives, but may also signal potential dilution of stock value for existing shareholders. Therefore, for Piotroski's criteria, the score for Change in Shares Outstanding is 0, since there has been no reduction in shares.

Operating of Harvard Bioscience (HBIO)

Cross Margin is growing?

The criterion involves assessing changes in gross margin, which reflects a company's core profitability.

For Harvard Bioscience (HBIO), the gross margin has increased from 0.5366 in 2022 to 0.5886 in 2023, therefore earning 1 point. Historically, HBIO's gross margin trends show significant growth over the past two decades and outperformed the industry median in 2023 (0.5886 vs. 0.5549). This upward trend is a positive indicator, signaling improved cost efficiency and pricing strategies.

Asset Turnover Ratio is growing?

Asset Turnover, calculated as sales divided by total assets, measures how efficiently a company uses its assets to generate sales. A higher ratio indicates better performance.

Harvard Bioscience (HBIO) has seen an increase in its Asset Turnover from 0.7366 in 2022 to 0.7941 in 2023, indicating improved efficiency in asset utilization. This increase adds 1 point in the Piotroski Analysis, reflecting a positive trend. Historically, the company's ratio has fluctuated over the past 20 years, peaking at 0.9776 in 2008. Given the rise in 2023, it's a favorable signal that reflects better management of assets to generate revenue, and this improvement positions HBIO advantageously compared to the previous year.