Last update on 2024-06-06

Henry Schein (HSIC) - Piotroski F-Score Analysis for Year 2023 (Final Score: 5/9)

Discover Henry Schein's (HSIC) Piotroski F-Score Analysis for 2023. Learn about the key financial metrics and their impact on the company's financial health.

Short Analysis - Piotroski Score: 5

We're running Henry Schein (HSIC) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

Henry Schein (HSIC) was analyzed using the Piotroski F-Score system to evaluate the company's financial health. It scored a 5 out of 9. Positive indicators include the company's net income, positive cash flow from operations, higher operating cash flow than net income, and a reduction in shares outstanding. Negative indicators include a declining return on assets, increasing leverage, a decreasing current ratio, and a declining asset turnover ratio.

Insights for Value Investors Seeking Stable Income

Based on the analysis, Henry Schein (HSIC) has a mixed financial health profile. A Piotroski score of 5 indicates average financial strength. Key positive aspects such as consistent profitability and positive cash flow are promising. However, increasing leverage and declining asset turnover raise concerns. As an investor, it may be worthwhile to monitor the company's efforts to improve operational efficiency and manage its debt. It's recommended to conduct further analysis before making any investment decisions.

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

Profitability of Henry Schein (HSIC)

Company has a positive net income?

Net income measures a company's profitability. Positive net income indicates profits after all expenses are deducted from revenue, critical for investment evaluation.

The net income for Henry Schein (HSIC) in 2023 stands at $416,000,000, which is positive. Therefore, according to the Piotroski criterion, 1 point is added. Analyzing the historical data for net income over the past 20 years demonstrates a consistent trend of profitability for HSIC. The company's net income has fluctuated but generally trended higher, peaking in 2019 at approximately $694,734,000. The period from 2020 to 2023 shows some decline, likely due to pandemic-related impacts, but the positive net income in 2023 still underscores financial resilience and stability. This positive net income is crucial for evaluating the firm's ongoing profitability and investor confidence.

Company has a positive cash flow?

Cash Flow from Operations (CFO) is a key indicator of the financial health and efficiency of a company's core business activities. Consistent, positive CFO demonstrates robust business operations.

The CFO for Henry Schein (HSIC) in 2023 is $500,000,000, indicating a positive cash flow from operations. This is a favorable trend and earns the company 1 point in the Piotroski analysis. Over the past 20 years, HSIC has maintained a positive CFO, reaching a peak of $710,000,000 in 2021 and consistently demonstrating strong operational cash flows. A positive trend in CFO reflects the company's solid ability to generate cash from its regular business activities, implying financial stability and efficient operations.

Return on Assets (ROA) are growing?

The criterion compares the Return on Assets (ROA) of the recent year with the previous year to assess profitability trends. An improving ROA indicates better asset utilization to generate profits.

In 2023, Henry Schein's (HSIC) ROA stood at 0.0434, a decline from its 2022 ROA of 0.063. This represents a diminishing ability to generate profit from its assets. The long-term trend, as demonstrated by industry data, shows a fluctuating but generally more favorable ROA median value over 20 years. Unfortunately, the decline from 2022 to 2023 signifies a negative trend for HSIC, meriting the assignment of 0 points for this Piotroski criterion.

Operating Cashflow are higher than Netincome?

Operating Cash Flow (OCF) shows the cash a company generates from its core operations, while Net Income (NI) reflects overall profitability. OCF higher than NI indicates strong cash-generating efficiency.

For the fiscal year 2023, Henry Schein (HSIC) recorded an Operating Cash Flow (OCF) of $500 million, surpassing its Net Income (NI) of $416 million. This results in a positive score of 1 for this criterion. Over the past 20 years, the trend in OCF versus NI has shown variability but is generally higher. Since 2003, the OCF has occasionally dipped below net income but has remained predominantly higher, underscoring a robust cash-generating operation. The accruals ratio also shows a decreasing trend, reaching 0.0473 in 2023, indicating a lesser impact of non-cash items in the net income. This trend is favorable for cash flow, providing a strong indication of the company's ability to generate cash efficiently from its core operations.

Liquidity of Henry Schein (HSIC)

Leverage is declining?

Change in Leverage assesses whether a company's financial risk is increasing or decreasing.

Reviewing Henry Schein's leverage ratio, it increased from 0.1528 in 2022 to 0.2125 in 2023. This signifies a heightened level of debt relative to equity, suggesting potential increased risk. A glance at the last 20 years of leverage values reveals some fluctuation but the recent year marks one of the higher leverage ratios. Historically, leverage tended to decrease during periods of economic stress (such as the 2008 financial crisis). The current increase in leverage might indicate more aggressive financing or expansion strategies, potentially making HSIC's financial stability a point to watch moving forward. This results in a score of 0 for the Piotroski criterion on reducing leverage.

Current Ratio is growing?

The Current Ratio is calculated by dividing a company's current assets by its current liabilities, indicating its ability to pay short-term obligations. An increased Current Ratio generally suggests improved liquidity.

The Current Ratio for Henry Schein has decreased from 1.7932 in 2022 to 1.6728 in 2023. This indicates a slight decline in the company's liquidity position. It's noteworthy that the company's current ratio in 2023 is still above the industry median of 1.3772, suggesting it remains relatively liquid compared to peers. However, the point calculation would be 0 since the ratio did not increase.

Number of shares not diluted?

Change in Shares Outstanding compares the total number of a company's shares over time.

For Henry Schein (HSIC), the Outstanding Shares in 2022 were 136,064,221, which decreased to 130,618,990 in 2023. This indicates a reduction, which adds 1 point in the Piotroski Analyses. Historically, Henry Schein's outstanding shares have seen a continual decrease since 2008, declining from 182,442,000 to the current level. This trend is favorable as it suggests potential share buybacks, enhancing shareholder value and improving financial ratios. By decreasing shares, the company increases the ownership stake of existing shareholders, often interpreted as a sign of management's confidence in long-term prospects.

Operating of Henry Schein (HSIC)

Cross Margin is growing?

Explain the criterion for Henry Schein (HSIC) and why it is important to consider

One of the key components of the Piotroski F-Score is the change in Gross Margin. The metric gauges a company's operational efficiency and its ability to control production costs in relation to its sales revenue. If this measure improves, it indicates enhanced profitability fundamentals, which typically translates to a stronger financial position.

Asset Turnover Ratio is growing?

Change in Asset Turnover measures the company's ability to generate sales from its assets relative to the previous year and is a key indicator of operational efficiency.

For Henry Schein (HSIC), the Asset Turnover ratio has decreased from 1.4802 in 2022 to 1.2867 in 2023, indicating a decline in the efficiency with which the company utilizes its assets to generate sales. This trend is unfavorable and results in a score of 0 for this criterion. Over the past 20 years, the Asset Turnover ratio has shown a general declining trend from a high of 1.986 in 2003 to the current low of 1.2867 in 2023.