Last update on 2024-06-07

Inter Parfums (IPAR) - Piotroski F-Score Analysis for Year 2023 (Final Score: 6/9)

Analyze Inter Parfums (IPAR) using the Piotroski F-Score for 2023. Score breakdown based on profitability, liquidity, and efficiency criteria with a final score of 6/9.

Short Analysis - Piotroski Score: 6

We're running Inter Parfums (IPAR) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

The Piotroski F-Score is a tool to measure a company's financial strength from 0-9. Inter Parfums (IPAR) has a Piotroski Score of 6, signifying decent financial health. IPAR's profitability looks solid with positive net income of $152.65M in 2023 and a growing return on assets (ROA). Their cash flow from operations is positive but lower than net income, needing further review. Liquidity is improving with a rising current ratio and declining leverage. However, a slight increase in outstanding shares and a minor drop in gross margin are concerns. Overall, IPAR's fiscal performance is effective, but there's room for scrutiny in specific areas.

Insights for Value Investors Seeking Stable Income

With a Piotroski score of 6, Inter Parfums (IPAR) displays strong financial health, particularly in profitability and liquidity. They have positive net income and growing ROA, making it worth considering for investment. Nonetheless, the lower operating cash flow compared to net income and slight dilution in shares are areas requiring caution. Given the upward trends in profitability and efficient asset use, it might be a good stock to explore, but investors should monitor cash flow dynamics and market position closely before making a decision.

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

Profitability of Inter Parfums (IPAR)

Company has a positive net income?

Net income measures a company's profitability over a specific period; a positive figure indicates that a company is generating profit.

For Inter Parfums (IPAR), the net income for 2023 stands at $152,654,000, which is definitively positive. This indicates a profit-generating year, contributing positively to the Piotroski score. Looking at the historical data, we see a consistent upward trend in net income over the last 20 years, culminating in a net increase from $13,837,000 in 2003 to $152,654,000 in 2023. This consistent profitability is a strong indicator of robust financial health and operational efficiency for IPAR.

Company has a positive cash flow?

Cash Flow from Operations (CFO) is a measure of the cash generated by a company’s core business operations.

Inter Parfums (IPAR) reported a positive CFO of $105,774,000 in 2023, which translates to 1 point under the Piotroski analysis. Evaluating the last 20 years of data reveals a generally positive trend with significant fluctuations. Particularly noteworthy is the improvement from negative CFOs in years like 2004 (-$4,383,000) and 2007 (-$6,428,000) to more consistent positive figures in recent years. This positive CFO indicates robust operational performance and suggests a solid foundation in the company's core business activities.

Return on Assets (ROA) are growing?

The change in Return on Assets (ROA) is an essential measure of a company's efficiency in generating profits from its assets. An increase in ROA is a positive indicator.

In 2023, Inter Parfums (IPAR) reported a ROA of 0.114 compared to 0.0986 in 2022. Since the ROA increased, it is a favorable development, earning the company 1 point in the Piotroski Analysis. To put this into perspective, let's examine a broader historical context and industry benchmarks. Over the past 20 years, Inter Parfums has shown fluctuations in its ROA, but the recent increase aligns well with both its trajectory and industry expectations. For instance, operating cash flow data over the past two decades reflects periods of growth and contraction, paralleling the broader trends in its ROA. Meanwhile, the industry median ROA has consistently hovered around the mid-0.4 range, significantly higher than Inter Parfums' numbers. However, this latest rise suggests an improvement in operational efficiency and profitability. Therefore, it's encouraging to see Inter Parfums narrowing the gap with the industry median, further solidifying this positive trend.

Operating Cashflow are higher than Netincome?

Operating Cash Flow higher than Net Income examines if a company is generating sufficient cash flow from its operations compared to its reported earnings, signaling financial robustness.

For Inter Parfums (IPAR) in 2023, Operating Cash Flow was $105.77 million, while Net Income stood at $152.65 million. This criterion evaluates whether the company generates ample cash directly from core operations, compared to its profit after all expenses. Given that Operating Cash Flow is lower than Net Income in this case, no points are added for this criterion. Over the past 20 years, Inter Parfums has seen its Operating Cash Flow fluctuate significantly, with several years showing negative figures, such as -$6.43 million in 2008. On the other hand, Net Income has been generally positive, with substantial growth over the recent decade, particularly peaking at $152.65 million in 2023. Despite strong net earnings, operating cash inconsistency suggests possible timing issues in capital collection, slow inventory turnover or higher receivables, requiring closer scrutiny for sustainable cash generation. With no points scored in this criterion, it becomes crucial to review how this aspect pairs with others for holistic financial strength assessment.

Liquidity of Inter Parfums (IPAR)

Leverage is declining?

Change in leverage assesses whether a company's debt reliance has reduced compared to the prior year.

Evaluating Inter Parfums' leverage, it stands at 0.1344 in 2022 and decreased slightly to 0.1113 in 2023. This implies a reduction in the company's debt reliance, a positive sign of improved financial health. Historically, comparing the leverage values across the last two decades, the company has generally maintained a conservative debt profile. With the leverage trending downwards from the high of 0.1415 in 2021, adding a point here aligns with its prudent financial management.

Current Ratio is growing?

The Change in Current Ratio criterion measures a company's liquidity by comparing its current assets to its current liabilities. This is crucial as it indicates the company's ability to cover its short-term obligations.

For Inter Parfums (IPAR), the Current Ratio increased from 2.2861 in 2022 to 2.5836 in 2023, indicating a positive trend in its capability to cover short-term liabilities. This increase above the industry median of 1.5029 signifies an enhanced liquidity position, suggesting lower financial risk and better short-term financial health for the company, thereby adding 1 point for this criterion.

Number of shares not diluted?

Change in shares outstanding reflects the company's equity distribution alterations over time.

The Outstanding Shares for Inter Parfums (IPAR) increased from 31,859,417 in 2022 to 31,994,328 in 2023. This denotes a rise of 134,911 shares or approximately 0.42%. Consequently, this criterion scores 0 points as a Piotroski analysis favors a decrease in outstanding shares as indicative of potential share buybacks or decreased dilution.

Operating of Inter Parfums (IPAR)

Cross Margin is growing?

Gross Margin measures a company's financial health by revealing the proportion of money left over from revenues after accounting for the cost of goods sold. It gauges operational efficiency and profitability.

In 2023, Inter Parfums (IPAR) recorded a Gross Margin of 0.6368, a slight decline from the 0.639 level in 2022. This is a decrease, albeit marginal, reflecting a 0.0022 point drop. Despite this dip, a broader look over the past 20 years shows that IPAR has consistently maintained a Gross Margin well above the industry median, which was as low as 0.4411 in 2023. This historical context suggests that while there was a slight drop year-over-year, IPAR remains much stronger relative to its peers. Thus, for Piotroski analysis, this would yield a score of 0 for the Gross Margin criterion, as there was no increase year-over-year.

Asset Turnover Ratio is growing?

The Asset Turnover ratio is a measure of a company's efficiency in using its assets to generate sales. It's important as it indicates how well management is utilizing the company's assets

The Asset Turnover ratio for Inter Parfums (IPAR) has increased from 0.8857 in 2022 to 0.9841 in 2023. This increment can be considered a positive trend as a higher Asset Turnover ratio suggests that the company is generating more revenue per dollar of assets. Specifically, Inter Parfums has improved its efficiency in using its assets to generate sales, earning 1 point in the Piotroski Analysis for this criterion. Historically, the Asset Turnover ratio of Inter Parfums has shown variations but has maintained levels above 1 in several instances, highlighting the company's ongoing efforts towards efficient asset utilization. Since 2022's figure of 0.8857 is lower than this historical peak, the year-over-year increase to 0.9841 signals a positive operational performance in 2023.