Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3
SolarWinds has an F-score of 6 indicating the company's financial situation is typical for a stable company.
The historical rank and industry rank for SolarWinds's Piotroski F-Score or its related term are showing as below:
SWI'
s Piotroski F-Score Range Over the Past 10 Years
Min: 4 Med: 5 Max: 8
Current: 6
During the past 8 years, the highest Piotroski F-Score of SolarWinds was 8. The lowest was 4. And the median was 5.
SolarWinds Piotroski F-Score Historical Data
The historical data trend for SolarWinds's Piotroski F-Score can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of SolarWinds's Piotroski F-Score
For the Software - Infrastructure subindustry, SolarWinds's Piotroski F-Score, along with its competitors' market caps and Piotroski F-Score data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
SolarWinds's Piotroski F-Score Distribution in the Software Industry
For the Software industry and Technology sector, SolarWinds's Piotroski F-Score distribution charts can be found below:
* The bar in red indicates where SolarWinds's Piotroski F-Score falls into.
How is the Piotroski F-Score calculated?
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
*Note: If the latest quarterly/semi-annual/annual total assets data is 0, then we will use previous quarterly/semi-annual/annual data for all the items in the balance sheet.
Profitability
Question 1. 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.
SolarWinds's current Net Income (TTM) was -9.1.
==> Negative ==> Score 0.
Question 2. 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.
SolarWinds's return on assets of this year was -0.00284656. SolarWinds's return on assets of last year was -0.19394582.
==> This year is higher. ==> Score 1.
Question 4. Quality of Earnings (Accrual)
Compare Cash flow return on assets (2) to return on assets (1)
SolarWinds's current ratio of this year was 0.89871973. SolarWinds's current ratio of last year was 0.67317299.
==> This year's current ratio is higher. ==> Score 1.
Question 7. Change in Shares in Issue
Compare the number of shares in issue this year, to the number in issue last year.
Score 0 if there is larger number of shares in issue this year, 1 otherwise.
SolarWinds's number of shares in issue this year was 166.257. SolarWinds's number of shares in issue last year was 161.729.
==> There is larger number of shares in issue this year. ==> Score 0.
Efficiency
Question 8. 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.
SolarWinds's gross margin of this year was 0.88532963. SolarWinds's gross margin of last year was 0.86657297.
==> This year's gross margin is higher. ==> Score 1.
Question 9. Change in asset turnover
Compare this year's asset turnover (total sales for the year 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
SolarWinds's asset turnover of this year was 0.23710581. SolarWinds's asset turnover of last year was 0.15011434.
==> This year's asset turnover is higher. ==> Score 1.
Evaluation
Piotroski F-Score
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6
Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3
SolarWinds has an F-score of 6 indicating the company's financial situation is typical for a stable company.
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.
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.
SolarWinds Piotroski F-Score Related Terms
Thank you for viewing the detailed overview of SolarWinds's Piotroski F-Score provided by GuruFocus.com. Please click on the following links to see related term pages.
SolarWinds Corp is a provider of information technology (IT), and management software. Company offers full-stack observability solutions. The company's business is focused on building products that enable technology professionals and leaders to securely monitor and manage the performance of their IT environments, whether on-premises, in the cloud or in hybrid deployments. The products offered are designed to monitor and manage networks, systems, databases and applications across on-premises, multi-cloud and hybrid IT environments without the need for customization or professional services. Majority of company's revenue is earned in United States.
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