Last update on 2024-06-07

Nordex (NDX1.DE) - Piotroski F-Score Analysis for Year 2023 (Final Score: 5/9)

Comprehensive Piotroski analysis reveals Nordex (NDX1.DE) achieves an F-Score of 5/9 for 2023, analyzing profitability, liquidity, and operating efficiency.

Short Analysis - Piotroski Score: 5

We're running Nordex (NDX1.DE) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

The Piotroski F-Score evaluates a company's financial position based on nine criteria, including profitability, liquidity, and leverage. Nordex (NDX1.DE) has a Piotroski F-Score of 5 out of 9, indicating a mixed financial strength. The analysis covers aspects such as net income, cash flow, return on assets, and leverage among others. Nordex showed improvements in cash flow and ROA but faced challenges with negative net income and increasing leverage. While its gross margin has improved, the asset turnover ratio saw a slight decline, indicating some efficiency issues in generating sales from its assets.

Insights for Value Investors Seeking Stable Income

Nordex (NDX1.DE) scores moderately on the Piotroski F-Score, showing some strong points like positive cash flow and improving gross margin. However, concerns such as consistent net losses, increasing leverage, and share dilution may make it a risky investment. Investors should approach this stock with caution and closely monitor future earnings reports and financial health trends 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 Nordex (NDX1.DE)

Company has a positive net income?

Net income is crucial as it measures a company's profitability. Positive net income indicates a company is making more money than it spends, signifying financial health.

For the year 2023, Nordex reported a net income of -302,831,000 EUR, which is negative. Evaluating the trend over the past 20 years, Nordex has had many years with negative net income, especially from 2017 onwards. This consistent negative performance is concerning and indicates challenges in the company's financial health. Thus, for 2023, Nordex earns 0 points for net income under the Piotroski analysis criterion.

Company has a positive cash flow?

The criterion evaluates whether the Cash Flow from Operations (CFO) is positive, which indicates that the company's core business operations are generating cash.

Given that Nordex's Cash Flow from Operations (CFO) for 2023 is 161,199,000, it is indeed positive. Thus, according to this Piotroski criterion, Nordex would score 1 point. Historically, Nordex's CFO has fluctuated over the last 20 years. In the recent decade, a negative CFO was seen in 2016, 2018 and 2022, which raises some concerns about the volatility and consistency of cash flows. However, the positive CFO in 2023 suggests a rebound and can be seen as a favorable indicator for the company's liquidity and operational health.

Return on Assets (ROA) are growing?

Change in Return on Assets (ROA) compares the company's efficiency in generating profits relative to its assets over consecutive periods, signaling improvements or declines in operational performance.

The ROA for Nordex (NDX1.DE) shows a notable improvement from -0.1123 in 2022 to -0.0595 in 2023. Although still negative, the lessening deficit indicates better utilization of assets leading to a smaller loss relative to the company's asset base. Given this positive trend, we can assign 1 point for the increased ROA. However, when benchmarked against the industry's median ROA, which stands at approximately 0.3383 in 2022 and 0.3492 in 2023, Nordex still lags significantly, underscoring continued inefficiencies compared to its peers.

Operating Cashflow are higher than Netincome?

Operating cash flow higher than net income is a sign that a company can generate sufficient cash to sustain its operations and growth without relying on accounting adjustments.

For Nordex (NDX1.DE) in 2023, the operating cash flow stands at 161,199,000, while the net income is significantly lower at -302,831,000. This signifies a major divergence in cash-based and accrual-based profitability measures. Given that the operating cash flow surpasses net income, it adds 1 point to the analysis based on this criterion. This trend indicates that Nordex can generate cash from its core operations despite reporting a net loss, which implies a certain level of operational efficiency. This positive cash flow performance could be due to effective management in collecting receivables or controlling inventory and payables. However, the consistent net losses over the years raise concerns about the company's long-term profitability and sustainability. Historically, the company has shown fluctuations in operating cash flows and net income, impacting its ability to generate consistent earnings. This further reinforces the need to look beyond just net income figures, thereby highlighting the significance of operating cash flow in financial assessments.

Liquidity of Nordex (NDX1.DE)

Leverage is declining?

Change in leverage refers to shifts in a company's debt levels relative to its equity. It's crucial as it impacts financial risk and cost of capital.

For Nordex (NDX1.DE), the leverage increased from 0.0466 in 2022 to 0.0733 in 2023. Historically, over the last 20 years, leverage has seen fluctuations, peaking in 2012 at 0.2103. The increase in 2023 suggests rising debt usage. Hence, this trend is negative, resulting in 0 points for this criterion. The rise points to higher financial risk and potential increases in interest obligations, which might put pressure on the company's earnings.

Current Ratio is growing?

Explain the criterion for Nordex (NDX1.DE) and why it is important to consider

The Current Ratio measures a company's ability to pay its short-term liabilities with short-term assets. A ratio above 1 indicates that the company has more short-term assets than short-term liabilities, which is generally a good thing as it suggests financial stability. It is essential to consider because it provides insights into liquidity and operating efficiency.

Number of shares not diluted?

Change in shares outstanding is analyzed to understand the company's equity structure. A decrease in shares generally signals share buybacks, rewarding shareholders, while an increase may indicate dilution.

Nordex's outstanding shares increased from 183,966,480 in 2022 to 227,924,267 in 2023, marking a share rise, resulting in 0 points for this criterion. Historically, Nordex's shares have risen, ballooning from 62,737,092 in 2005 to 227,924,267 in 2023 owing to capital needs or growth strategies. While increasing shares may fuel growth, diluting existing equity can worry investors.

Operating of Nordex (NDX1.DE)

Cross Margin is growing?

Gross Margin is calculated as the ratio of gross profit to total revenue. It indicates the percentage of revenue that exceeds the cost of goods sold, highlighting the efficiency and profitability of a company. Increasing Gross Margin points to improving financial health and cost control.

For 2022, Nordex reported a Gross Margin of 0.0854, which increased to 0.1518 in 2023. This marks an improvement from the previous year. Though Nordex's Gross Margin lags behind the industry median of 0.3492, the year-over-year increase indicates a more efficient cost management and potential for continued financial stabilization. Thus, Nordex earns a point for this criteria, showcasing recent strides towards better profitability despite historical volatility.

Asset Turnover Ratio is growing?

The Asset Turnover criterion measures how efficiently a company uses its assets to generate sales. A higher ratio indicates greater efficiency.

Comparing the Asset Turnover ratio of 1.275 in 2023 to 1.2846 in 2022, we see a slight decrease. This decline from 1.2846 to 1.275 implies that Nordex has become marginally less efficient in utilizing its assets to generate sales. Given the decimal precision, this reduction is minimal but still signifies a downward trend. Therefore, this criterion would be rated 0. Analyzing the long-term trend over the last 20 years, Nordex's Asset Turnover has seen significant fluctuations, peaking at 1.8001 in 2015 and dipping to as low as 0.8384 in 2018. The latest figures still reflect a stabilized phase, but without distinct improvement year-over-year.