Last update on 2024-06-07

Verint Systems (VRNT) - Piotroski F-Score Analysis for Year 2023 (Final Score: 7/9)

Verint Systems (VRNT) Piotroski F-Score for 2023 is 7/9. Analysis covers profitability, liquidity, and efficiency. Discover if VRNT is a strong, undervalued stock.

Short Analysis - Piotroski Score: 7

We're running Verint Systems (VRNT) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

Verint Systems, known by its ticker VRNT, achieved a Piotroski F-Score of 7 out of 9, indicating a strong financial position. The analysis used nine criteria to evaluate the company's profitability, liquidity, and operational efficiency. The analysis shows the following: 1. Profitability: VRNT demonstrated positive net income and cash flow from operations in 2023, indicating efficient operations. Furthermore, Return on Assets (ROA) improved, highlighting better asset utilization. 2. Liquidity: There was a slight increase in leverage from 2022 to 2023, which is a negative sign. Moreover, the current ratio decreased signalling weakened short-term liquidity. 3. Operational Efficiency: Positive indicators included a non-diluted number of shares, an improved gross margin from 2022 to 2023, and a higher asset turnover ratio, all signifying effective management. Most indicators were positive, but the growing leverage and decreasing current ratio may cause concern regarding liquidity.

Insights for Value Investors Seeking Stable Income

Based on the Piotroski F-Score of 7, Verint Systems (VRNT) presents a solid investment opportunity. Positive trends in profitability and operational efficiency make it a strong contender. However, potential investors should be aware of the slight increase in leverage and the declining current ratio, which might hint at liquidity issues. Investigating these aspects further before making an investment decision is wise. Overall, VRNT exhibits several positive financial attributes, making it worthwhile to consider for investment.

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

Profitability of Verint Systems (VRNT)

Company has a positive net income?

Positive net income indicates the company's profitability, making it an essential criterion in the Piotroski analysis.

For the fiscal year 2023, Verint Systems (VRNT) reported a net income of $14,898,000, marking it as positive. This positive net income adds 1 point to Verint's Piotroski F-Score. Historically, the company has seen varying levels of profitability, with significant losses in some years such as 2008 and 2009, but also notable profits in years like 2013 and 2019. The positive result in 2023 is a positive indicator of the company’s improved profitability.

Company has a positive cash flow?

Cash Flow from Operations (CFO) assesses how much cash a company generates from its normal business operations. Positive CFO indicates efficient cash generation.

In 2023, Verint Systems (VRNT) reported a positive Cash Flow from Operations (CFO) amounting to $139,816,000. This positive CFO adds 1 point according to the Piotroski score criteria, reflecting efficient cash generation from its core business activities. Analyzing the historical data over the last 20 years, VRNT has had varying levels of operating cash flow, with noticeable dips in years such as 2008 and 2010 where negative figures were recorded. However, since then, the trend has been largely positive, showcasing the company’s growing ability to generate cash from its operations. The generally ascending trend in CFO, reaching a significant $139,816,000 in 2023, is a favorable indicator of the company's financial health and operational efficiency. A sustained positive cash flow from operations signifies the company’s continued ability to cover its operational costs and potentially invest in growth opportunities.

Return on Assets (ROA) are growing?

Explain the criterion for Verint Systems (VRNT) and why it is important to consider

Return on Assets (ROA) is a crucial financial ratio measuring net income produced by total assets during a specific time period. Comparing the ROA of 2022 versus 2023 helps investors assess management's efficiency in using assets to generate earnings growth. Specifically, for Verint Systems (VRNT), an increase from 0.0051 in 2022 to 0.0064 in 2023 suggests better utilization of their assets.

Operating Cashflow are higher than Netincome?

Operating Cash Flow higher than Net Income: This criterion shows if a company generates enough cash flow compared to the net income, indicating strong cash-based operations.

For Verint Systems (VRNT) in 2023, the operating cash flow is $139,816,000, which is significantly higher than the net income of $14,898,000. This gives the company a point in the Piotroski Analysis for this criterion. Historically, Verint Systems has shown a volatile but generally increasing trend in operating cash flows, showcasing its ability to generate substantial cash through its core business operations. Compared to the net income, which has been more erratic and often lower, this year's performance reaffirms the company's capability to sustain operations through solid cash flows. This trend is positive for investors as it suggests financial stability and efficient management of operational activities.

Liquidity of Verint Systems (VRNT)

Leverage is declining?

Change in leverage is a critical measure of a company's financial health and risk-bearing capacity.

For Verint Systems (VRNT), the leverage has increased from 0.186 in 2022 to 0.1953 in 2023. This upward trend in leverage, reflecting an increased ratio of debt to equity, may suggest that the company is taking on more debt compared to its equity base. Over the past 20 years, Verint's leverage has seen significant fluctuations, peaking in 2008 at 0.4088 and reaching its lowest point in 2005 at 0. With a current leverage of 0.1953, the trend seen from 2022 to 2023 is concerning as increased leverage can lead to higher financial risk. Therefore, this criterion receives a score of 0.

Current Ratio is growing?

The Current Ratio measures a company's ability to pay short-term obligations with its short-term assets. An increasing Current Ratio is considered positive as it indicates better liquidity.

Between 2022 and 2023, Verint Systems' (VRNT) Current Ratio decreased from 1.3665 to 1.3155. This reduction of 0.051 points is a negative trend, implying a slight deterioration in its short-term liquidity position. Over the last 20 years, the company's Current Ratio showcases significant volatility, reaching as high as 3.5685 in 2004 and as low as 0.8241 in both 2008 and 2010. Compared to the industry median of 1.5348 in 2023, Verint Systems' current ratio remains below average, indicating relatively weaker liquidity compared to its industry peers.

Number of shares not diluted?

Examining the trend in Outstanding Shares reveals how the company is managing its share capital. A decrease suggests a shareholder-friendly approach, often meaning share repurchases.

In 2022, Verint Systems had 65,591,000 shares outstanding, while in 2023, this number slightly decreased to 65,332,000 shares. This represents a marginal reduction of 259,000 shares, which translates to a rough decline of 0.4%. Over the past 20 years, the company's outstanding shares have generally trended upwards, from 23,597,674 shares in 2003 to the current 65,332,000. However, the decrease between 2022 and 2023 is minor but positive in terms of score. Thus, this decline is good for this criterion, deserving 1 point.

Operating of Verint Systems (VRNT)

Cross Margin is growing?

The Change in Gross Margin criterion evaluates whether a company's gross margin has improved or not from the previous year. Gross Margin is the percentage of revenue that exceeds the cost of goods sold (COGS); it is a crucial indicator of a company's financial health and operational efficiency.

For Verint Systems (VRNT), the Gross Margin has increased from 0.6586 in 2022 to 0.673 in 2023. This increase results in 1 point being added based on the Piotroski F-Score criteria. Over the last 20 years, VRNT's Gross Margin has generally been robust, often exceeding industry medians, particularly during periods of industry volatility. For instance, in 2023, VRNT's Gross Margin of 0.673 outpaces the industry median Gross Margin of 0.715. This positive trend signifies improving operational efficiency and a stronger competitive position in the market.

Asset Turnover Ratio is growing?

Asset Turnover reveals the efficiency of a company's use of its assets in generating sales revenue. Higher ratios suggest improved performance.

Verint Systems' Asset Turnover increased from 0.3111 in 2022 to 0.386 in 2023, earning it 1 point. This is a positive trend, indicating an enhancement in efficiency. Although the historical data shows fluctuations, the recent improvement over 2022 suggests effective asset utilization, reversing a prior downward trend seen in recent years.