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Zillow Inc (NAS:Z)
Piotroski F-Score
3 (As of Today)

Warning Sign:

Piotroski F-Score of 3 is low, which usually implies poor business operation.

The zones of discrimination were as such:

Good or high score = 8 or 9
Bad or low score = 0 or 1

Zillow Inc has an F-score of 3 indicating the company's financial situation is typical for a stable company.

Z' s 10-Year Piotroski F-Score Range
Min: 3   Max: 6
Current: 3

3
6

During the past 5 years, the highest Piotroski F-Score of Zillow Inc was 6. The lowest was 3. And the median was 5.


Definition

How is the Piotroski F-Score calculated?

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Net Income was 2.715 + -1.189 + -10.232 + -3.747 = $-12.5 Mil.
Cash Flow from Operations was 18.762 + 3.99 + 6.257 + 2.289 = $31.3 Mil.
Revenue was 58.348 + 53.311 + 46.92 + 38.966 = $197.5 Mil.
Gross Profit was 53.078 + 48.195 + 42.626 + 34.836 = $178.7 Mil.
Total Assets at the begining of this year (Dec12) was $307.5 Mil.
Total Assets was $608.1 Mil.
Long-Term Debt was $0.0 Mil.
Total Current Assets was $315.5 Mil.
Total Current Liabilities was $33.4 Mil.
Net Income was 0.549 + 2.334 + 1.332 + 1.724 = $5.9 Mil.

Revenue was 34.337 + 31.915 + 27.765 + 22.833 = $116.9 Mil.
Gross Profit was 30.531 + 28.292 + 24.501 + 19.483 = $102.8 Mil.
Total Assets at the begining of last year (Dec11) was $116.7 Mil.
Total Assets was $307.5 Mil.
Long-Term Debt was $0.0 Mil.
Total Current Assets was $205.4 Mil.
Total Current Liabilities was $20.7 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by total assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Zillow Inc's current net income was -12.5. ==> Negative ==> Score 0.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by total assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Zillow Inc's current cash flow from operations was 31.3. ==> Positive ==> Score 1.

Q3. Change in Return on Assets

Compare this year’s return on assets (1) to last year’s return on assets.

Score 1 if it’s higher, 0 if it’s lower.

ROA (This Year)=Net Income/Total Assets at the beginning of this year (Dec12)
=-12.453/307.549
=-0.04049111

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Dec11)
=5.939/116.668
=0.05090513

Zillow Inc's return on assets of this year was -0.04049111. Zillow Inc's return on assets of last year was 0.05090513. ==> Last year is higher ==> Score 0.

Q4. Quality of Earnings (Accrual)

Compare Cash flow return on assets (2) to return on assets (1)

Score 1 if CFROA > ROA, 0 if CFROA =< ROA.

Zillow Inc's current net income was -12.5. Zillow Inc's current cash flow from operations was 31.3. ==> 31.3 > -12.5 ==> CFROA > ROA ==> Score 1.

Funding

Q5. Change in Gearing or Leverage

Compare this year’s gearing (long-term debt divided by average total assets) to last year’s gearing.

Score 1 if gearing is lower, 0 if it’s higher.

Gearing (This Year)=Long-Term Debt/Total Assets
=0/608.063
=0

Gearing (Last Year)=Long-Term Debt/Total Assets
=0/307.549
=0

Zillow Inc's gearing of this year was 0. Zillow Inc's gearing of last year was 0. ==> Last year is lower ==> Score 0.

Q6. Change in Working Capital (Liquidity)

Compare this year’s current ratio (current assets divided by current liabilities) to last year’s current ratio.

Score 1 if this year’s current ratio is higher, 0 if it’s lower

Current Ratio (This Year)=Total Current Assets/Total Current Liabilities
=315.512/33.385
=9.4507114

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=205.401/20.74
=9.9036162

Zillow Inc's current ratio of this year was 9.4507114. Zillow Inc's current ratio of last year was 9.9036162. ==> Last year's current ratio is higher ==> Score 0.

Q7. Change in Shares in Issue

Compare the number of shares in issue this year, to the number in issue last year.

Score 1 if there is fewer number of shares in issue this year. Score 0 otherwise.

Zillow Inc's number of shares in issue this year was 39.1. Zillow Inc's number of shares in issue last year was 36.4. ==> There is more number of shares in issue this year. ==> Score 0.

Efficiency

Q8. Change in Gross Margin

Compare this year’s gross margin (gross profit divided by sales) to last year’s.

Score 1 if this year’s gross margin is higher, 0 if it’s lower.

Gross Margin (This Year)=Gross Profit/Revenue
=178.735/197.545
=0.90478119

Gross Margin (Last Year)=Gross Profit/Revenue
=102.807/116.85
=0.87982028

Zillow Inc's gross margin of this year was 0.90478119. Zillow Inc's gross margin of last year was 0.87982028. ==> This year's gross margin is higher. ==> Score 1.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales divided by total assets at the beginning of the year) to last year’s asset turnover ratio.

Score 1 if this year’s asset turnover ratio is higher, 0 if it’s lower

Asset Turnover (This Year)=Revenue/Total Assets at the beginning of this year (Dec12)
=197.545/307.549
=0.64232041

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Dec11)
=116.85/116.668
=1.00155998

Zillow Inc's asset turnover of this year was 0.64232041. Zillow Inc's asset turnover of last year was 1.00155998. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=0+1+0+1+0+0+0+1+0
=3

Good or high score = 8 or 9

Bad or low score = 0 or 1

Zillow Inc has an F-score of 3 indicating the company's financial situation is typical for a stable company.


Explanation

The developer of the system is Joseph D. Piotroski is relatively unknown accounting professor who shuns publicity and rarely gives interviews.

He graduated from the University of Illinois with a B.S. in accounting in 1989, received an M.B.A. from Indiana University in 1994. Five years later, in 1999, after earning a Ph.D. in accounting from the University of Michigan, he became an associate professor of accounting at the University of Chicago.

In 2000, he wrote a research paper called "Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers" (pdf).

He wanted to see if he can develop a system (using a simple nine-point scoring system) that can increase the returns of a strategy of investing in low price to book (referred to in the paper as high book to market) value companies.

What he found was something that exceeded his most optimistic expectations.

Buying only those companies that scored highest (8 or 9) on his nine-point scale, or F-Score as he called it, over the 20 year period from 1976 to 1996 led to an average out-performance over the market of 13.4%.

Even more impressive were the results of a strategy of investing in the highest F-Score companies (8 or 9) and shorting companies with the lowest F-Score (0 or 1).

Over the same period from 1976 to 1996 (20 years) this strategy led to an average yearly return of 23%, substantially outperforming the average S&P 500 index return of 15.83% over the same period.


Related Terms

Net Income, Cash Flow from Operations, Revenue, Gross Profit, Total Assets, Long-Term Debt, Total Current Assets, Total Current Liabilities


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Zillow Inc Annual Data

Dec09Dec10Dec11Dec12Dec13
Q1 0
Q2 1
Q3 0
Q4 1
Q5 0
Q6 0
Q7 0
Q8 1
Q9 0
F-score 3

Zillow Inc Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Q1 1000
Q2 1111
Q3 0000
Q4 1111
Q5 0000
Q6 1100
Q7 0000
Q8 1111
Q9 0000
F-score 0000065433
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