Last update on 2024-06-06

Host Hotels & Resorts (HST) - Piotroski F-Score Analysis for Year 2023 (Final Score: 7/9)

Host Hotels & Resorts Piotroski F-Score Analysis for 2023: 7/9 score showcasing financial health, liquidity, and operational efficiency improvements.

Short Analysis - Piotroski Score: 7

We're running Host Hotels & Resorts (HST) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

The Piotroski F-Score evaluates a company's financial health based on profitability, liquidity, and efficiency criteria, scoring from 0 to 9. Host Hotels & Resorts (HST) scored a 7 out of 9, indicating a strong financial position. The company shows positive net income and cash flow, improved asset utilization, and a rising asset turnover ratio. However, there's a slight increase in leverage, a decrease in gross margin, and a smaller rise in the number of shares outstanding. Overall, the positive aspects outweigh the negatives, reflecting strong operational efficiency and financial health.

Insights for Value Investors Seeking Stable Income

Based on the analysis, Host Hotels & Resorts (HST) appears to be a strong investment opportunity. The high Piotroski F-Score of 7 suggests that the company is financially robust with good profitability and liquidity. It is definitely worth looking into for potential investment, especially given their successful rebound post-2020 and consistent cash flow.

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

Profitability of Host Hotels & Resorts (HST)

Company has a positive net income?

Analyzing whether the company has positive net income is crucial as it signifies profitability. Positive net income indicates the company is generating more revenue than expenses.

For Host Hotels & Resorts (HST), the Net Income in 2023 is $740,000,000 which is positive. Historically, the net income shows variability but often is positive. Despite significant dips in 2009 ($-252M) and a striking loss in 2020 ($-732M), the company has managed to rebound strongly by 2023. The trend is good for this criterion with a positive outlook lately. Thus, 1 point is added.

Company has a positive cash flow?

Cash Flow from Operations (CFO) assesses if a company is generating positive cash flow from its core business activities. Positive CFO is crucial as it indicates good liquidity and operational efficiency.

Host Hotels & Resorts (HST) reported a CFO of $1,441,000,000 in 2023. This figure is positive, contributing 1 point to the Piotroski score. Over the past 20 years, HST's CFO has been consistently positive, except in 2020 when it was -$307,000,000 due to the COVID-19 pandemic's impact. The continual positive cash flow post-2020 showcases a strong rebound and indicates robust financial health and sustainable operations in its core activities.

Return on Assets (ROA) are growing?

Return on Assets (ROA) measures a company's profitability in relation to its total assets. It is crucial for evaluating how efficient the company is at generating profits from its assets.

In 2023, Host Hotels & Resorts (HST) reported an ROA of 0.0604, compared to an ROA of 0.0514 in 2022. This represents an increase, adding 1 point for a favorable trend. This uptick suggests improved asset utilization and profitability. Over the last 20 years, HST's ROA shows periodic fluctuations, but the current improvement outpaces the industry's median, which sits significantly higher at 0.3566 for 2023. This indicates HST's strides in efficiency, yet room for considerable growth compared to the broader industry.

Operating Cashflow are higher than Netincome?

Operating Cash Flow higher than Net Income is an indication of strong financial health, as it suggests the company is generating sufficient cash from its core business operations.

For Host Hotels & Resorts (HST), the operating cash flow for 2023 is $1,441,000,000, significantly higher than the net income of $740,000,000. This indicates a robust cash generation capability and adds 1 Piotroski point. Historically, HST's cash flow from operations has trended upward, although there were significant downturns in economic crises, such as in 2020 where it reported -$307,000,000. Net income has also shown recovery post-2020 indicating resilience. Given the consistent upward trend in operating cash flow, this metric suggests a strong operational efficiency for HST.

Liquidity of Host Hotels & Resorts (HST)

Leverage is declining?

Change in Leverage for Host Hotels & Resorts (HST) involves evaluating their financial leverage, particularly focusing on the company’s debt level relative to its equity or assets. Lower leverage shows a decrease in financial risk while high leverage might suggest higher financial vulnerability, especially in volatile markets.

Host Hotels & Resorts (HST) saw a slight increase in leverage from 0.3088 in 2022 to 0.309 in 2023. This nominal uptick signals a modest rise in the company's financial risk as it appears to be taking on slightly more debt relative to its equity. Evaluating the last 20 years, leverage was highest in 2003 at 0.6616 and started seeing a downward trend till 2020. Post-2020, there have been minor fluctuations. Although the present increase is minimal, it is worth noting in the context of the Piotroski analysis that leverage did increase, hence scoring a 0 for this criterion.

Current Ratio is growing?

Current Ratio is a liquidity ratio that measures a company's ability to pay short-term obligations with its short-term assets. An increase in the current ratio is generally viewed as a positive sign of improved liquidity.

As of 2023, Host Hotels & Resorts (HST) reported a current ratio of 1.0684 compared to 0.9588 in 2022. This increase in the current ratio indicates improved liquidity, moving it closer to its long-term average despite being below the 20-year historical peak of 4.6848 achieved in 2010 and below the industry median of 1.7704 in 2023.

Number of shares not diluted?

Outstanding shares represent the total number of a company's shares that are currently owned by all its shareholders. It's crucial in knowing how it affects share value and earnings per share (EPS).

In 2022, Host Hotels & Resorts had 714.7 million shares outstanding, decreasing slightly to 709.7 million shares in 2023, signifying an increment. Unfortunately, this trend earns 1 point on the Piotroski score. Historically, the company has seen significant fluctuations in its outstanding shares over the past 20 years, peaking at 786.8 million in 2015 and generally trending higher in recent years except the last two. The current year's increase reflects possible actions such as equity financing, which inversely affects ownership value.

Operating of Host Hotels & Resorts (HST)

Cross Margin is growing?

Gross Margin measures the proportion of revenue that exceeds the cost of goods sold, highlighting operational efficiency and profitability.

For Host Hotels & Resorts (HST), the Gross Margin decreased from 0.5965 in 2022 to 0.5835 in 2023, indicating a slight drop in operational efficiency and profitability. Despite this decrease, HST's gross margin remains significantly above the industry median of 0.3566 for 2023, showcasing its competitive advantage. Historically, HST's gross margin has displayed resilience, especially when compared to industry shifts. Therefore, although the trend is not favorable in the short term, HST maintains a robust standing relative to the industry.

Asset Turnover Ratio is growing?

Asset Turnover measures a company's efficiency in using its assets to generate revenue.

For 2023, Host Hotels & Resorts (HST) showcased an Asset Turnover of 0.4333 in contrast to 0.3986 in 2022, marking an improvement. This signifies better utilization of the company's assets to drive revenue, a positive trend. Comparing historical data, HST faced challenges in COVID-19 with ratios plummeting to 0.1286 in 2020 but rebounded. The rising ratio indicates strategic recovery and efficiency gains, adding 1 Piotroski point.