Last update on 2024-06-06

Pioneer Natural Resources (PXD) - Piotroski F-Score Analysis for Year 2023 (Final Score: 4/9)

Get an in-depth Piotroski F-Score analysis of Pioneer Natural Resources (PXD) for 2023, evaluating financial health based on profitability, liquidity, and operating efficiency.

Short Analysis - Piotroski Score: 4

We're running Pioneer Natural Resources (PXD) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

Pioneer Natural Resources' Piotroski F-Score is 4 out of 9. The Piotroski Score evaluates a company based on 9 criteria involving profitability, liquidity, and operating efficiency. In this analysis, Pioneer Natural Resources (PXD) met the following criteria: positive net income, positive cash flow, operating cash flow higher than net income, and reduction in outstanding shares. However, the company missed points on ROA, leverage, current ratio, gross margin, and asset turnover.

Insights for Value Investors Seeking Stable Income

Based on the score of 4 out of 9, Pioneer Natural Resources shows mixed results. While the company has strengths in some areas like profitability and positive cash flow, it also faces challenges with efficiency and liquidity compared to its peers. Investors may want to dig deeper into these areas before making any investment decisions. It's worth considering that a Piotroski Score of 4 is not extremely high and suggests looking further into the company's long-term sustainability and market conditions before buying the stock.

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

Profitability of Pioneer Natural Resources (PXD)

Company has a positive net income?

Netincome assesses a company's profitability by examining its net income, which is crucial in evaluating financial performance.

Pioneer Natural Resources (PXD) has reported a net income of $4,894,000,000 in 2023. This positive net income earns the company 1 point in the Piotroski analysis. Over the last 20 years, the company has experienced fluctuations, including multiple years of negative net income. However, the recent trend shows three consecutive years of positive net income, highlighting a period of stronger profitability and suggesting a favorable trend.

Company has a positive cash flow?

Cash Flow from Operations (CFO) indicates a company's ability to generate cash from its normal business operations and reflects the liquidity available to meet ongoing operational needs. It's crucial for assessing long-term financial health and sustainability.

For Pioneer Natural Resources (PXD), the CFO of $8,448,000,000 in 2023 is positive, which adds 1 point to the Piotroski score. Historically, PXD's CFO has shown an upward trend, notably strong in recent years with $11,348,000,000 in 2022 and $6,046,000,000 in 2021. This positive cash flow trend highlights robust operational efficiency and indicates financial stability, which is crucial for investor confidence and long-term growth.

Return on Assets (ROA) are growing?

ROA measures a company's efficiency in generating profit from its assets. It is a crucial efficiency metric.

Comparing the ROA of Pioneer Natural Resources (PXD) between 2022 and 2023, there is a decline from 0.2163 in 2022 to 0.1353 in 2023. Despite the strong operational cash flow numbers, which peaked at $11.35 billion in 2022, the decrease in ROA suggests a decrease in efficiency in using assets to generate profits. The industry median for ROA in 2023 is 0.4978, which further accentuates PXD's lower efficiency as compared to its peers. Therefore, for the Piotroski score, this criterion would score a 0.

Operating Cashflow are higher than Netincome?

Higher Operating Cash Flow than Net Income (OCF > NI) indicates strong earnings quality and less aggressive accounting.

For the year 2023, Pioneer Natural Resources (PXD) reported an Operating Cash Flow (OCF) of $8.448 billion, while the Net Income for the same year stood at $4.894 billion. This results in the OCF being higher than the Net Income, which is a positive sign indicating the earnings quality of the company is quite solid. In fact, over the past 20 years, PXD's OCF has generally outperformed its Net Income, especially post-2018. For 2023, this ratio demonstrates robust cash generation and suggests less reliance on non-cash accounting adjustments. Thus, we award 1 point under this criterion. Reflecting on the historical data: in 19 out of the past 20 years, the OCF has not only been positive but often significantly higher than net income, further underlining this trend.

Liquidity of Pioneer Natural Resources (PXD)

Leverage is declining?

Leverage measures the ratio of a company's total debt to its total assets and indicates financial risk.

In 2023, Pioneer Natural Resources (PXD) reported a leverage ratio of 0.1381, compared to a leverage ratio of 0.122 in 2022. This marks an increase in leverage. Historically, the leverage of PXD has fluctuated, with significant decreases observed from 2003 (0.3936) through 2021 (0.1883), reflecting effective deleveraging over the long term. However, the recent uptick in leverage reduces the score on the Piotroski scale as it represents an additional financial burden and a potential risk in scenarios of economic downturns or revenue volatility.

Current Ratio is growing?

The current ratio measures a company's ability to pay its short-term obligations with its short-term assets.

The current ratio for Pioneer Natural Resources (PXD) has decreased from 0.9586 in 2022 to 0.8759 in 2023. This decline suggests a diminished capacity to cover short-term liabilities using short-term assets. Historically, PXD's current ratio has fluctuated significantly, reaching a peak around 2009-2016 when the ratio consistently stayed above 1. However, it dropped below 1 in recent years, indicating potential liquidity concerns. Comparatively, the industry median current ratio has generally stayed above PXD's ratios, reaching 1.1065 in 2023, further signifying potential liquidity issues for PXD against its peers. Given this trend, the current ratio did not increase in 2023, thus earning a score of 0 in this criterion.

Number of shares not diluted?

Change in shares outstanding is a measure of how much the number of a company's outstanding shares has fluctuated over a specific period. This criterion is vital as it impacts earnings per share (EPS) and shareholder value.

For Pioneer Natural Resources (PXD), the outstanding shares have actually decreased from 240,000,000 in 2022 to 234,000,000 in 2023. This decrease in shares outstanding typically indicates share buybacks—a strategy often used by companies to return value to shareholders. Based on the Piotroski F-Score methodology, this results in an addition of 1 point for this criterion because a decrease in outstanding shares is generally viewed positively, suggesting the company may be undervalued and is actively working on enhancing shareholder value. Looking at the historical data over the last 20 years, Pioneer Natural Resources has experienced fluctuations in its total number of shares, peaking at 240,000,000 in 2022. This recent reduction is an encouraging trend, which aligns with the generally supportive environment for shareholder returns currently observed across the industry.

Operating of Pioneer Natural Resources (PXD)

Cross Margin is growing?

Gross Margin measures the proportion of revenue that exceeds the cost of goods sold (COGS), reflecting core profitability.

In 2023, Pioneer Natural Resources recorded a Gross Margin of 0.3665 compared to 0.4401 in 2022, indicating a decrease. This results in a 0-point attribution according to Piotroski criteria. Historically, the company has shown significant variability, exemplified by a substantial margin during early 2000s and a notable contraction during mid-2010s. Compared to the industry, the Gross Margin has generally paralleled or slightly underperformed, with peak discrepancies around the 2008 financial crisis and recent years. The lower 2023 margin highlights potential operational challenges or increased costs, signaling a decline in core profitability against both its prior performance and industry standards.

Asset Turnover Ratio is growing?

Asset Turnover measures a company's efficiency in using its assets to generate revenue, calculated as revenue divided by average total assets.

The Asset Turnover for Pioneer Natural Resources (PXD) has decreased from 0.6722 in 2022 to 0.5355 in 2023. This represents a decline, which is a negative trend, reflecting reduced efficiency in asset utilization. The long-term historical data informs us that such fluctuations have occurred frequently. For example, in 2020 the ratio was 0.3668 before jumping up to 0.6378 in 2021.