Last update on 2024-06-05

Dentsply Sirona (XRAY) - Piotroski F-Score Analysis for Year 2023 (Final Score: 5/9)

Analyze Dentsply Sirona (XRAY) using Piotroski F-Score for 2023. Discover financial health insights with a contributed score of 5/9.

Short Analysis - Piotroski Score: 5

We're running Dentsply Sirona (XRAY) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

The Piotroski F-Score helps assess a company's financial health using 9 criteria related to profitability, liquidity, and operating efficiency. For Dentsply Sirona (XRAY), the analysis shows mixed results with an overall Piotroski Score of 5 out of 9. Highlights include a positive cash flow from operations and improvement in the Return on Assets (ROA). However, the company faces challenges like a negative net income, decline in current ratio, and increasing leverage. These indicators suggest areas that need improvement for better financial health.

Insights for Value Investors Seeking Stable Income

Dentsply Sirona (XRAY) presents some strengths in cash flow and asset efficiency but also faces significant financial challenges. With a Piotroski Score of 5, it's not a clear buy or sell. If you are considering an investment, further research and monitoring of the company's efforts to overcome its challenges would be prudent. For cautious investors, waiting for more positive trends might be advisable before committing.

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

Profitability of Dentsply Sirona (XRAY)

Company has a positive net income?

The profitability criterion measures whether the company is generating positive net income, indicating overall profitability.

In 2023, Dentsply Sirona (XRAY) reported a net income of -132 million, registering a negative net income. Over the past 20 years, there are multiple instances like -1.55 billion in 2017, -1.01 billion in 2018, and -950 million in 2022 where the net income was also negative. This downward trend reflects significant challenges and needs correction for future enterprise stability. With negative net income for 2023, under Piotroski Analysis, this criterion scores 0.

Company has a positive cash flow?

The criterion for analyzing cash flow from operations (CFO) assesses the company's ability to generate cash from its core business operations. Positive CFO is indicative of a healthy operational performance.

For the year 2023, Dentsply Sirona (XRAY) reported a cash flow from operations of $377 million, which is positive. This warrants a score of 1 according to the Piotroski criterion. However, compared to the previous years, there's a noticeable decline from $517 million in 2022 and the peak of $657 million in 2021. The positive trend over the years has been disrupted, signifying some potential operational challenges or investments impacting the cash flow. Despite this decline, maintaining a positive CFO is still a good sign, but the downward trend should be investigated further.

Return on Assets (ROA) are growing?

Change in Return on Assets (ROA) evaluates the company's ability to utilize its assets to generate earnings year over year and is vital in assessing efficiency.

The comparison of the ROA for Dentsply Sirona (XRAY) between the years 2023 and 2022 indicates an improvement, moving from -0.1125 to -0.0176. This positive trend suggests that the company is becoming more efficient in utilizing its assets to generate earnings. The industry's median ROA over the past 20 years showcases far superior efficiency averages, often hovering around 0.5. Dentsply Sirona still faces considerable room for growth when benchmarked against the industry median. However, the upward movement in ROA for 2023 signals positive momentum and earns a score of 1 point in the Piotroski Scale. This shift could be influential for investors looking for signs of potential rebound or efficiency gains.

Operating Cashflow are higher than Netincome?

One of the aspects Piotroski focuses on is the comparison between operating cash flow and net income to discern earnings quality.

In the fiscal year 2023, Dentsply Sirona (XRAY) reported an operating cash flow of $377 million, which notably surpasses its net income of -$132 million. This suggests solid cash generation capabilities, unclouded by negative net income, warranting a score of 1 on this Piotroski criterion. Historically, the company's operating cash flow generally trended higher than net income, underscoring consistent operational strength: e.g., in 2003, operating cash flow was approximately $258 million versus a net income of $174 million.

Liquidity of Dentsply Sirona (XRAY)

Leverage is declining?

Change in Leverage indicates the company's use of debt relative to its equity. It’s crucial because a lower leverage ratio is often seen as a signal of financial stability.

The Leverage for Dentsply Sirona has increased from 0.2584 in 2022 to 0.2607 in 2023. As the leverage has increased, the company does not get a point in this criterion. Looking at the historical data over the last 20 years, the current level of leverage, while higher than 2022, is still lower than many of the previous years (e.g., 2011 at 0.3133). This suggests that while there is an uptick in leverage, it's not at unprecedented levels for the company, but it modifies its stance relative to risk and debt management.

Current Ratio is growing?

Explain the criterion for Dentsply Sirona (XRAY) and why it is important to consider

The Current Ratio is a measure of a company’s ability to pay off its short-term liabilities with its short-term assets. It is important as it indicates liquidity; values above 1 are generally considered good. In the case of Dentsply Sirona, the Current Ratio decreased from 1.6179 in 2022 to 1.3846 in 2023, yielding a score of 0. Observing data over the past 20 years, the current ratio has varied significantly, peaking at 3.652 in 2010. The 2023 value is closer to historical lows, and it also underperforms compared to the industry median of 2.3418.

Number of shares not diluted?

Change in shares outstanding is a key metric in the Piotroski score. It measures whether a company has been issuing more shares recently, which could dilute existing shareholders’ value.

For Dentsply Sirona (XRAY), the outstanding shares have decreased from 215.5 million in 2022 to 212 million in 2023. This reduction suggests that the company is not issuing new shares and might be buying back shares, which is generally considered a positive indicator for shareholders as it signals confidence from the company's management. Therefore, under this criterion, Dentsply Sirona scores 1 point. Historically, the company's share count has fluctuated, showing significant increases around 2016 and 2017 but a downward trend more recently. This trend is favorable in the context of the Piotroski score.

Operating of Dentsply Sirona (XRAY)

Cross Margin is growing?

Explain the criterion for Dentsply Sirona (XRAY) and why it is important to consider

The criterion examines the change in Dentsply Sirona's gross margin from one year to the next. The gross margin metric is crucial as it indicates the company's efficiency in producing goods relative to its revenue. A higher gross margin suggests better cost management and potentially higher profitability.

Asset Turnover Ratio is growing?

The Asset Turnover ratio measures a company's efficiency in using its assets to generate sales revenue. An increasing ratio suggests improving efficiency.

In 2023, Dentsply Sirona (XRAY) demonstrates an Asset Turnover of 0.5282, up from 0.4646 in 2022. This improvement signals a favorable trend of increasing efficiency, hence adding 1 point. Historically, the company faced declines since 2003 but showed a rebound in recent years, culminating in this positive change.