Last update on 2024-06-07

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

Analyze Schaeffler (SHA.DE)'s Piotroski F-Score for 2023. Evaluates financial health through profitability, liquidity, and efficiency metrics. Final score: 6/9.

Short Analysis - Piotroski Score: 6

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

Schaeffler (SHA.DE) achieved a Piotroski F-Score of 6 out of 9, indicating moderate financial strength. Key positive aspects include consistent profitability, positive cash flow, reduced leverage, and increasing asset turnover. However, the company has declining ROA and Gross Margin, and its current ratio has decreased, reflecting lower liquidity.

Insights for Value Investors Seeking Stable Income

Schaeffler’s Piotroski F-Score of 6 suggests the company has a stable financial standing with some areas of concern. The consistent profitability and positive cash flow are promising, making it a potential investment for those seeking relatively stable, long-term returns. However, investors should be cautious of the declining ROA, Gross Margin, and current ratio, which could signal challenges ahead. Therefore, it might be worth conducting further research or monitoring the company's performance closely 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 Schaeffler (SHA.DE)

Company has a positive net income?

Net income is the total profit of a company and a crucial measure of its profitability.

Schaeffler's net income for 2023 stands at 310,000,000 which is positive. This trend is favorable as it indicates financial health. Examining the historical data over the last 13 years, the company has had positive net income for 12 of those years, with only a single negative year in 2020. This consistency in profitability is promising. Therefore, this criterion adds 1 point to the Piotroski score for Schaeffler.

Company has a positive cash flow?

This criterion evaluates the company's ability to generate cash from its core business activities. A positive cash flow from operations indicates that the company is efficiently managing its operations to generate sufficient cash to sustain itself and possibly finance growth.

For 2023, Schaeffler reported a cash flow from operations (CFO) of €1.348 billion, indicating a positive cash inflow. This is a good sign and adds 1 point in the Piotroski F-Score analysis. Looking at the operating cash flow trend over the last 13 years, Schaeffler has consistently maintained positive CFO, with figures hovering around the billion-euro mark and even showing significant growth during certain years, such as 2016 when CFO peaked at €1.876 billion. The positive CFO in 2023 reinforces the company's ability to generate adequate operational cash, supporting its internal financial health and operational efficiency. Thus, Schaeffler's CFO in recent history portrays a stable and robust financial performance.

Return on Assets (ROA) are growing?

Change in Return on Assets (ROA) is a key profitability metric that measures how effectively a company uses its assets to generate earnings.

Schaeffler's Return on Assets (ROA) declined from 0.0389 in 2022 to 0.0212 in 2023, thus failing to meet the Piotroski criterion for improvement. The decrease in ROA indicates a reduction in the efficiency with which Schaeffler utilizes its assets for profit generation. This is particularly notable given the last 20 years where industrial median ROA hovered significantly higher in the range of 0.18 to 0.26, suggesting Schaeffler is underperforming its industry counterparts over a sustained period. Additionally, Schaeffler's operating cash flow in these years averaged above 1 billion, which highlights a consistent ability to generate cash albeit at a lower profitability rate.

Operating Cashflow are higher than Netincome?

Operating Cash Flow being higher than Net Income

Based on the provided numbers, Schaeffler (SHA.DE) exhibits an Operating Cash Flow (OCF) of €1,348 million for 2023, which surpasses the Net Income (NI) of €310 million. Therefore, we will add 1 point in the Piotroski Score for Schaeffler for this criterion. Over the years, the trend in operating cash flow and net income reflects the company’s ability to generate cash flow irrespective of its earnings. Notably, despite a substantial dip in Net Income during 2020, the Operating Cash Flow remained positive, further reinforcing the company's cash-generative capacity.

Liquidity of Schaeffler (SHA.DE)

Leverage is declining?

Change in Leverage refers to the variation in a company's debt levels over time.

Schaeffler's leverage decreased from 0.2375 in 2022 to 0.2155 in 2023. This decrease in leverage is generally seen as positive because it indicates that the company is relying less on debt to finance its operations, thus reducing its financial risk. The trend over the last 20 years, starting from 0 in previous years, peaking at 0.682 in 2013, and gradually decreasing to 0.2155 in 2023, showcases the company's effort to deleverage its balance sheet. Therefore, in accordance with Piotroski's scoring model, Schaeffler would receive 1 point for the leverage criterion.

Current Ratio is growing?

The Current Ratio is a liquidity ratio that measures a company's ability to pay short-term obligations. It is calculated by dividing current assets by current liabilities.

For Schaeffler (SHA.DE), the Current Ratio decreased from 1.6249 in 2022 to 1.3308 in 2023. This denotes a reduction in liquidity, leading to a score of 0. Historically, Schaeffler's Current Ratio is below the industry median of 1.7153 in 2023, impacting its overall liquidity assessment.

Number of shares not diluted?

Change in shares outstanding assesses if a company is issuing new shares, diluting existing shareholdings.

From 2022 to 2023, the number of outstanding shares for Schaeffler remained at 666,000,000. According to the historical data, the company has consistently maintained this number, except for a single dip in 2015 to 615,912,329. Based on the criterion, we assign 0 points as there is no decrease in outstanding shares. While stability in share count is generally positive, suggesting limited shareholder dilution, it also falls short of the positive indicator sought by this point addition.

Operating of Schaeffler (SHA.DE)

Cross Margin is growing?

The criterion evaluates the change in Gross Margin to determine profitability trends. Comparing Gross Margin over time reveals management's ability to control costs and increase revenue.

Schaeffler (SHA.DE) had a Gross Margin of 0.2204 in 2023 compared to 0.2264 in 2022. This indicates a slight decrease in Gross Margin. Therefore, for this criterion, Schaeffler receives 0 points. Over the last decade, Schaeffler's Gross Margin has been fluctuating with a general decline from 0.3021 in 2011. Compared to the industry median Gross Margin which had a value of 0.196 in 2023, Schaeffler's performance is still relatively better but needs significant improvements to recapture its historical profitability levels.

Asset Turnover Ratio is growing?

Asset turnover measures a company’s efficiency in generating sales from its assets. A higher ratio indicates better performance.

Schaeffler’s asset turnover increased from 1.1037 in 2022 to 1.1139 in 2023. This slight upward trend suggests improved operational efficiency, which is a positive sign. In the given historical data, Schaeffler demonstrated a fluctuation over the past 12 years with a notable dip during the 2020 pandemic year reaching as low as 0.9545. Post-2020, the recovery has been steady, and the current increase in asset turnover further enhances investor confidence. Therefore, an increase in 2023 adds 1 point to Schaeffler's Piotroski Score.