ATIF Holdings Ltd: A Deep Dive into Its Performance Potential
Long-established in the Capital Markets industry, ATIF Holdings Ltd (NASDAQ:ATIF) has enjoyed a stellar reputation. It has recently witnessed a surge of 12.94%, juxtaposed with a three-month change of -18.75%. However, fresh insights from the GuruFocus Score Rating hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of ATIF Holdings Ltd.
Understanding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
1. Financial strength rank: 4/10
2. Profitability rank: 3/10
3. Growth rank: 1/10
4. GF Value rank: 2/10
5. Momentum rank: 6/10
Based on the above method, GuruFocus assigned ATIF Holdings Ltd the GF Score of 54 out of 100, which signals poor future outperformance potential.
ATIF Holdings Ltd: A Snapshot
ATIF Holdings Ltd is a consulting company that provides financial and advisory services to small and medium-sized enterprises, individual customers, and families. The firm also offers Pre-IPO and Post-IPO services. It operates in one operating segment which is the consulting service business. With a market cap of $14.83 million and sales of $3.34 million, the company has an operating margin of 7.75%.
Financial Strength Analysis
ATIF Holdings Ltd's financial strength indicators present some concerning insights about the company's balance sheet health. The company's Altman Z-Score is just -2.91, which is below the distress zone of 1.81. This suggests that the company may face financial distress over the next few years. Additionally, the company's low cash-to-debt ratio at 0.68 indicates a struggle in handling existing debt levels.
Profitability Analysis
ATIF Holdings Ltd's low Profitability rank can also raise warning signals. ATIF Holdings Ltd's Operating Margin has declined over the past five years ((-358.42%)), as shown by the following data: 2018: 51.39; 2019: 21.83; 2020: -913.80; 2021: -258.49; 2022: -132.81. With a Piotroski F-Score of 2, ATIF Holdings Ltd's financial health appears concerning. This score, rooted in Joseph Piotroski's nine-point scale, evaluates a firm's profitability, liquidity, and operating efficiency. Given its rating, ATIF Holdings Ltd might be facing challenges in these areas.
Growth Prospects
A lack of significant growth is another area where ATIF Holdings Ltd seems to falter, as evidenced by the company's low Growth rank. The company's revenue has declined by -26.1 per year over the past three years, which underperforms worse than 89.56% of 680 companies in the Capital Markets industry. Stagnating revenues may pose concerns in a fast-evolving market.
Conclusion
Given ATIF Holdings Ltd's financial strength, profitability, and growth metrics, the GuruFocus Score Rating highlights the firm's unparalleled position for potential underperformance. While the company has a history of strong performance, current indicators suggest that it may struggle to maintain this trajectory. Investors should consider these factors when making investment decisions.
GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
This article first appeared on GuruFocus.
