Last update on 2024-06-07

MIND C.T.I. (MNDO) - Piotroski F-Score Analysis for Year 2023 (Final Score: 6/9)

Explore MIND C.T.I.'s (MNDO) Piotroski F-Score Analysis for 2023. Discover a detailed breakdown of its 6/9 score assessing profitability, liquidity, and efficiency.

Short Analysis - Piotroski Score: 6

We're running MIND C.T.I. (MNDO) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

Analyzing MIND C.T.I. (MNDO) using the Piotroski F-Score, the company achieved a score of 6 out of 9. Key highlights include consistent profitability with positive net income and cash flow from operations, a slight increase in Return on Assets (ROA), reduced leverage, and a growing current ratio indicating good liquidity. However, the analysis also revealed lower operating cash flow compared to net income, slight dilution of shares, and a decline in gross margin, showing mixed performance in efficiency and shareholder value.

Insights for Value Investors Seeking Stable Income

Based on the Piotroski analysis, MIND C.T.I. (MNDO) shows several positive attributes, such as steady profitability and improving liquidity, which are good signs for potential investors. However, there are areas for caution, including the reduced gross margin and share dilution, which may affect profitability and shareholder value. Overall, with a score of 6, MNDO appears to be a fairly solid investment, but it may warrant further scrutiny regarding these specific challenges 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 MIND C.T.I. (MNDO)

Company has a positive net income?

Net income is a measure of a company's profitability and is imperative to assess its financial health. Positive net income demonstrates the firm's ability to generate profit beyond its expenditures.

For the year 2023, MIND C.T.I. (MNDO) reported a positive net income of $5,167,000. This is a good indicator of the company's profitability, adding 1 point to the Piotroski score. Reviewing the historical data over the past 20 years reveals a general trend of profitability since 2009, with rare occasions of negative net income. The consistency in profitability augurs well for the company's financial stability and ability to generate robust earnings.

Company has a positive cash flow?

Positive Cash Flow from Operations (CFO) is indicative of a company's ability to generate sufficient cash from its core business activities. It is a crucial metric to assess financial health.

In 2023, MIND C.T.I. (MNDO) reported a Cash Flow from Operations (CFO) of $4.1 million. This is a positive value, which is favorable as it indicates that the company is generating solid operating cash flow. Historical data also show consistent positive CFO over the last two decades, thereby adding credibility to MNDO's operational efficiency and financial stability. With a steady CFO, MNDO earns 1 point for this criterion under the Piotroski analysis framework.

Return on Assets (ROA) are growing?

ROA (Return on Assets) measures a company's profitability relative to its total assets. It's essential to consider because it indicates how efficiently a company utilizes its assets to generate earnings and is a key indicator of financial health.

The ROA for MIND C.T.I. (MNDO) increased slightly from 0.163 in 2022 to 0.1631 in 2023, an almost negligible increase. To put this into perspective, the industry median ROA for 2023 stands substantially higher at 0.6741, showcasing that MNDO lags behind its industry peers substantially. However, a positive trend is a good sign, albeit minimal. This uptick contributes 1 point according to the Piotroski criteria.

Operating Cashflow are higher than Netincome?

Operating cash flow being higher than net income suggests that the company's operational efficiency and earnings quality are strong, which is typically seen as a positive indicator of financial health.

In 2023, MIND C.T.I.'s operating cash flow stood at $4.1 million, lower than its net income of $5.167 million. This results in a score of 0 for this criterion, indicating that the operating cash flow did not exceed net income. Historically, operating cash flow has fluctuated significantly year over year, peaking at $7.67 million in 2004 and hitting lows such as $593,000 in 2006. Similar fluctuations are observed in net income, with significant negative values in years like 2007 (-$11.955 million) and 2008 (-$6.423 million), and peaks like $19.787 million in 2009. Despite recent stability in operating cash flow, the 2023 figures highlight a disconnect between the net income and operational cash generation, which could be a cause for closer financial scrutiny.

Liquidity of MIND C.T.I. (MNDO)

Leverage is declining?

This criterion evaluates the change in a company's leverage ratio year-over-year. A decrease in leverage signifies reduced financial risk, assuming the company isn't under-leveraged.

The leverage for MIND C.T.I. (MNDO) has decreased from 0.0194 in 2022 to 0.0134 in 2023. This implies that the company's financial risk is reducing, as its dependence on debt is declining. Over the last 20 years, MNDO’s leverage was initially zero, but starting from 2019, leverage figures showed positive values with a peak in 2020 (0.046). The continuous decrease since then, dropping to 0.0134 in 2023, is a favorable trend. Therefore, 1 point can be added in the Piotroski score under this criterion.

Current Ratio is growing?

Current Ratio assesses the liquidity of a company by measuring its ability to cover short-term liabilities with short-term assets.

MIND C.T.I. (MNDO) demonstrated an increase in its Current Ratio from 3.9246 in 2022 to 4.4073 in 2023, marking an improvement in its ability to cover short-term obligations. An increasing Current Ratio is indicative of stronger liquidity. In comparison, the industry median remained generally stable at around 1.75 in 2023. Historically, MNDO's Current Ratio has seen fluctuations; noteworthy is its peak in 2018 at 5.4447. Presently, MNDO's liquidity is robust compared to industry standards. Assigning 1 point for the increase in Current Ratio, this criterion is met positively.

Number of shares not diluted?

Change in Shares Outstanding reflects the company's ability to control dilution of shareholders' value and is a measure of financial discipline.

MIND C.T.I. (MNDO) saw an increase in Outstanding Shares from 20,099,000 in 2022 to 20,163,000 in 2023. This increase suggests that the company issued additional shares, potentially diluting existing shareholder value. For this criterion, given the increase in shares, MIND C.T.I. would score 0 points. Note that over the past 20 years, their number of outstanding shares has generally fluctuated but has increased in recent years.

Operating of MIND C.T.I. (MNDO)

Cross Margin is growing?

Gross Margin measures the proportion of revenue that exceeds the cost of goods sold. It is essential for evaluating a company's financial health and profitability.

The Gross Margin for MIND C.T.I. (MNDO) decreased from 0.5339 in 2022 to 0.5028 in 2023, a decline that indicates reduced profitability. Historically, MNDO’s Gross Margin is considerably variable, witnessing a high of 0.7532 in 2004 and recent lows nearing 0.5028 in 2023. Compared to the industry median, MNDO has historically reported higher margins but is now navigating closer to the industry threshold of 0.6741 in 2023. This trend points to intensified cost pressures and competitive challenges, and thus results in zero points for this criterion.

Asset Turnover Ratio is growing?

The change in Asset Turnover, which measures the efficiency of a company's use of its assets in generating sales, is crucial for understanding operational effectiveness.

The Asset Turnover for MIND C.T.I. (MNDO) has increased from 0.6644 in 2022 to 0.6821 in 2023, indicating improved efficiency in using its assets to generate revenue. This positive trend adds 1 point to the Piotroski score. Analyzing the last 20 years of data, values range from 0.2641 in 2003 to a high of 0.8344 in 2014, underscoring fluctuations. The increment in 2023 halts a recent downward trend from 2021, reflecting renewed operational efficiency.