Last update on 2024-06-07

Puma (PUM.DE) - Piotroski F-Score Analysis for Year 2023 (Final Score: 6/9)

Analyze Puma's (PUM.DE) financial strength with the Piotroski F-Score. For 2023, Puma scored 6 out of 9, reflecting moderate financial health.

Short Analysis - Piotroski Score: 6

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

Puma's Piotroski F-Score is 6 out of 9, signaling moderately strong financial health. The company's net income and operating cash flow are positive, showing profitability and effective cash generation from core operations. However, its return on assets has decreased, indicating less efficiency in using assets to generate profit. Liquidity is a mixed bag: the current ratio has grown, suggesting improved capability to meet short-term obligations, but increased leverage and a peculiar surge in outstanding shares in 2023 indicate higher financial risk and potential dilution. Gross margin has risen, but asset turnover has declined, showing mixed operational efficiency.

Insights for Value Investors Seeking Stable Income

Puma shows promise with a Piotroski score of 6, suggesting moderate financial health. While the company demonstrates strong cash flow and profitability, concerns lie in its increasing leverage, peculiar surge in shares, and decreased asset turnover. Potential investors should investigate the reasons behind these mixed signals, especially the sudden change in outstanding shares and increasing leverage, before making an investment decision.

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

Profitability of Puma (PUM.DE)

Company has a positive net income?

Reviewing net income trends is a fundamental part of financial analysis, as it provides insight into a company's profitability over time.

For 2023, Puma reported a net income of €304.9 million, which is positive. Over the past 20 years, Puma has experienced fluctuations in net income, including several years where net income was zero. However, recent trends show consistent profitability, culminating in the 2023 figure. Given the positive net income, Puma earns 1 point on this Piotroski criterion. This is a favorable trend, indicating solid financial health and efficient management.

Company has a positive cash flow?

Cash Flow from Operations (CFO) indicates the amount of cash generated by a company's regular business operations. It is crucial for assessing the company's ability to maintain and grow its operations.

In 2023, Puma (PUM.DE) reported a positive Cash Flow from Operations (CFO) of €653.6 million. This aligns with a generally upward trend observed in recent years, notably improving from a negative CFO in 2015, which was -€37.1 million. Over the last twenty years, Puma's operating cash flow has experienced fluctuations, but the overall trajectory is positive. Strong cash flow from operations signifies robust fundamentals, enabling Puma to reinvest in its business, pay down debt, and potentially return capital to shareholders. Therefore, for the CFO criterion, Puma earns 1 point.

Return on Assets (ROA) are growing?

Change in Return on Assets (ROA) analysis encompasses the evaluation of sequential yearly ROA percentages. This metric is pivotal as it underlines a company's efficiency in generating profit from its assets.

In 2023, Puma reported a ROA of 0.0455, down from 0.0566 in 2022. This signifies a decline, resulting in a score of 0 points in this Piotroski criterion. It denotes reduced efficiency in asset profitability. Over the past 20 years, Puma's ROA showcased a myriad of fluctuations. Notably, industry median ROA figures, markedly higher than Puma's, imply strong sector-wide asset profitability standards. The trend spotlights a perimeter for Puma to amplify operational efficiency to rival peers. The 2023 descent signals requisite strategic adjustments to bolster ROA.

Operating Cashflow are higher than Netincome?

This criterion examines if the operating cash flow (OCF) exceeds net income. This is key for assessing financial health as it highlights the company's ability to generate cash from core operations, ensuring liquidity even if they face accounting inefficiencies or other financial anomalies.

In 2023, Puma's operating cash flow stands at €653.6 million, while net income is reported at €304.9 million. Clearly, the operating cash flow significantly exceeds net income. This is a positive indication, correlating to a robust cash generation ability from operating activities. This implies a strong ability to meet short-term liabilities, reinvest into its operations, or even return value to shareholders. Comparing these figures over the past two decades reveals fluctuating trends—with the lowest OCF recorded at -€37.1 million (2015) and a consistent rise post-2018, signaling a potential upward trajectory in core business strength and strategic financial management. Thus, for the Piotroski Score, Puma earns 1 point here.

Liquidity of Puma (PUM.DE)

Leverage is declining?

The Change in Leverage criterion examines the company's leverage ratio year-over-year. A decrease in leverage suggests reduced financial risk and stronger balance sheet stability, meriting a point.

In 2023, Puma's leverage has increased from 0.1893 in 2022 to 0.2178. This change indicates a rise in the company's financial risk as it implies more debt relative to its equity. Adding this leverage trend into context, looking at the last 20 years, Puma has seen a significant increase in leverage, especially since 2013, which is not favorable in terms of financial stability. Thus, for this criterion, Puma does not earn a point as increased leverage signifies higher financial risk and potential liquidity issues.

Current Ratio is growing?

The current ratio measures a company's ability to cover its short-term liabilities with its short-term assets. A ratio above 1 indicates more current assets than current liabilities, while a declining trend can signal liquidity issues.

For Puma (PUM.DE), the Current Ratio for 2023 is 1.5494, compared to 1.4775 in 2022. This increase reflects an improvement in Puma's liquidity position. To further support this, it’s worth noting that the company has generally maintained a healthy Current Ratio around industry median standards. Adding to this optimistic view, despite the decline in Current Ratio over two decades, Puma still outperformed the industry median in prior years. Increased liquidity is a positive signal to investors, enhancing Puma's short-term financial stability. Therefore, 1 point is added.

Number of shares not diluted?

Change in Shares Outstanding evaluates the trend in the number of shares. An increase may indicate dilution of existing shares while a decrease can imply share buybacks.

The Outstanding Shares for Puma in 2023 increased dramatically compared to 2022, jumping from 149,649,158 to an unprecedented 0. While historically the number has fluctuated, this jump is negative for outstanding shares, leading to a score of 0.

Operating of Puma (PUM.DE)

Cross Margin is growing?

The criterion measures the change in Gross Margin year-over-year. An increase suggests improved management of production costs relative to sales, adding value to shareholders.

In 2023, the Gross Margin for Puma stood at 0.4635, compared to 0.461 in 2022. This uptick is positive, adding 1 point to the Piotroski score. Historically, Puma's Gross Margin has fluctuated but generally remained above the industry median, which was 0.4422 in 2023. This indicates Puma's consistent efficiency in managing production costs relative to its earnings, signaling sound financial health.

Asset Turnover Ratio is growing?

Asset Turnover measures a company's efficiency in using its assets. An increase in this metric signifies better utilization of assets to generate sales, reflecting operational efficiency and effective management.

From the data provided, we see that Puma's Asset Turnover ratio in 2023 is 1.2826, compared to 1.3543 in 2022. This indicates a decrease, thus failing to meet the criterion of an increase. This results in a score of 0 for this metric. Analyzing a more extended period, Puma experienced fluctuations in its Asset Turnover, peaking at 2.0784 in 2003 and hitting various lows thereafter. Recent years show relatively stable turnover but highlight challenges in achieving consistent asset efficiency.