Last update on 2024-06-06

JB Hunt Transport Services (JBHT) - Piotroski F-Score Analysis for Year 2023 (Final Score: 6/9)

Thorough Piotroski F-Score analysis of JB Hunt Transport Services (JBHT) for 2023, presenting a final score of 6/9. Discover key financial performance metrics.

Short Analysis - Piotroski Score: 6

We're running JB Hunt Transport Services (JBHT) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

The Piotroski F-Score measures a company's financial stability on a scale from 0 to 9 based on 9 criteria related to profitability, liquidity, and leverage. JB Hunt Transport Services (JBHT) has a Piotroski score of 6 for 2023. The analysis indicates positive aspects like consistent net income, positive cash flows, and a recent decrease in leverage, suggesting financial strength. However, there are concerns, including a recent dip in Return on Assets (ROA), lower asset turnover, and a declining current ratio, which present potential liquidity issues.

Insights for Value Investors Seeking Stable Income

JB Hunt Transport Services shows several strong financial indicators, especially its consistent net income and positive cash flow. The company's ongoing share buybacks and increased gross margin signify management's confidence and improved efficiency. Nevertheless, the declines in ROA, asset turnover, and current ratio advise caution. Investors should consider further investigation into these areas before making a decision but overall, JBHT appears to be relatively strong and may be worth considering for investment.

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

Profitability of JB Hunt Transport Services (JBHT)

Company has a positive net income?

Netincome reflects a company's profitability after all expenses and taxes have been deducted.

In 2023, JB Hunt Transport Services reported a net income of $728,287,000. This figure is positive, which aligns with nearly two decades of consistent profitability for the company. In the past 20 years, JB Hunt has always reported a positive net income. The steady increase in net income over the years, peaking in 2022 at $969,351,000, highlights the company's robust financial health. However, the slight dip in 2023 compared to 2022 indicates potential emerging challenges or market conditions that need to be addressed.

Company has a positive cash flow?

Cash Flow from Operations (CFO) is an important indicator of a company's financial health, showing the cash generated from regular business operations.

For the year 2023, JB Hunt Transport Services reported a CFO of $1,744,618,000, which is positive. Over the last 20 years, JB Hunt has consistently demonstrated positive cash flows except in challenging economic periods. This consistent positivity in CFO speaks to the company's robust operational efficiency and solid market position. In 2023, the positive CFO of $1.74 billion not only adds 1 point in the Piotroski Analysis but also underscores JBHT's effective cash management strategies, suggesting good liquidity and financial stability. The positive trend indicates JBHT's capability to continue funding its operations and obligations without relying on external financial sources, which is favorable for investors.

Return on Assets (ROA) are growing?

Change in Return on Assets (ROA) measures the improvement or deterioration in a company's profitability relative to its total assets. It's important because an increasing ROA signals more efficient use of assets to generate earnings.

In 2023, JB Hunt Transport Services (JBHT) reported an ROA of 0.0892, a decline compared to its ROA of 0.133 in 2022. This signifies a reduction in asset utilization efficiency. The industry median ROA for 2023 is 0.1817, which further highlights JBHT's less-than-optimal performance against industry standards. Historically, JBHT's operating cash flow has shown robustness, peaking at $1,776,882,000 in 2021, but the recent trend underscores a concerning dip in profitability relative to assets. Therefore, no point is added for this criterion.

Operating Cashflow are higher than Netincome?

Explain the criterion for JB Hunt Transport Services (JBHT) and why it is important to consider

One of the important signals in the Piotroski Score is whether a company's Operating Cash Flow (OCF) is higher than its Net Income. This is essential because OCF is less prone to manipulation and provides a better picture of a company’s profitability. With an OCF of $1,744,618,000 and Net Income of $728,287,000 in 2023, JB Hunt's Operating Cash Flow indeed surpasses its Net Income. Hence, it scores one point for this criterion. Historically, JB Hunt has shown a steady increase in its OCF over the past 20 years, with tremendous growth reaching its peak in 2023. On the other hand, Net Income has also increased, albeit with some fluctuation over the years. The growing divergence between OCF and Net Income is a positive indicator of the company’s cash-generating capability and efficiency in converting earnings into cash flows. This trend is beneficial as it underscores the quality of JB Hunt's earnings and financial health.

Liquidity of JB Hunt Transport Services (JBHT)

Leverage is declining?

Change in Leverage measures the extent to which a company is using debt to finance its assets. Lower leverage suggests more financial stability.

Comparing the leverage of JB Hunt Transport Services, the leverage is 0.1553 in 2023, a slight decrease from 0.162 in 2022. Over the past 20 years, the company has seen significant fluctuations in its leverage ratio, peaking at 0.3646 in 2007 and falling to as low as 0.1391 in 2021. This decrease in leverage suggests a strengthened financial position, reducing risk, thus earning 1 point.

Current Ratio is growing?

The current ratio compares a company's current assets to its current liabilities and assesses its ability to cover short-term obligations.

For JB Hunt Transport Services (JBHT), the current ratio decreased from 1.4104 in 2022 to 1.1717 in 2023. This decline indicates a reduction in the company's short-term liquidity and its ability to cover its short-term liabilities with its short-term assets, effectively scoring 0 points for this criterion. Over the last 20 years, JBHT's current ratio fluctuated notably, sometimes below the industry median, highlighting periodic liquidity challenges that seem to be resurfacing in recent times. Therefore, this downward trend is not encouraging as it signals tightening liquidity.

Number of shares not diluted?

Change in shares outstanding reflects how many shares a company has issued. A decrease can indicate share buybacks, potentially signalling management's confidence.

Comparing 2022 with 103,743,382 shares and 2023 with 103,220,027 shares, there is a decrease of 523,355 shares. This results in a 1 point for JBHT. Historically, shares have been steadily decreasing from 163,177,778 in 2003 to 103,220,027 in 2023 indicating ongoing buybacks. This trend can be viewed positively as it often implies management's confidence in the company's future and a desire to return value to shareholders.

Operating of JB Hunt Transport Services (JBHT)

Cross Margin is growing?

The change in gross margin involves comparing the profit a company makes after deducting the costs associated with making and selling its products. A higher gross margin indicates better efficiency in converting raw materials into income.

For JB Hunt Transport Services (JBHT), the gross margin increased from 0.1669 in 2022 to 0.1723 in 2023. This reflects positively as it indicates improved efficiency and profitability in managing its production costs. Over the historical data, JBHT's gross margin has seen fluctuations, peaking at 0.501 in 2003 and reaching a low of 0.1505 in 2020. This variability could be attributed to numerous external factors such as market conditions and operational challenges. Comparatively, the industry median gross margin for 2023 stands at 0.1817, which JBHT slightly underperforms. However, the positive trend this year implies JBHT is moving in the right direction. Score: 1 point.

Asset Turnover Ratio is growing?

Asset Turnover measures a company's efficiency in using its assets to generate sales. Higher ratios indicate greater efficiency.

From the given data, JB Hunt Transport Services (JBHT) saw a decrease in Asset Turnover, going from 2.032 in 2022 to 1.5718 in 2023. This is not favorable, as it indicates that the company was less efficient in using its assets to generate revenue in 2023 compared to 2022. Over a broader timeline, there have been fluctuations, with past ratios sometimes exceeding 2, but the recent downturn is concerning and results in a score of 0 for this Piotroski criterion.