Will Imimobile's (LON:IMO)) share price suffer because of its poor F-Score?

Sometimes a company's financial situation deteriorates before the share price reacts. When this happens, it presents switched on investors with the chance to get their money out before a potentially steep decline in value.

Measures like the Piotroski F-Score, which distill a wealth of financial data into one easily comparable score, can help us identify these situations. When we apply it to cloud communications software and solutions provider Imimobile (LON:IMO), it presents some important questions for shareholders.

What the Piotroski F-Score says about Imimobile (LON:IMO)

The Piotroski F-Score is a nine-strong checklist split up into three sections, each looking at a different part of a company's financial situation. Unlike most ratios, the F-Score looks more deeply into the direction in which a company’s financial health is moving.

Piotroski found that weak stocks with an F-Score of 2 or less are five times more likely to either go bankrupt or delist due to financial problems. Working our way through Piotroski's checklist, we can see that Imimobile (LON:IMO) gets a lowly trailing twelve-month F-Score of 2 out of a possible 9...

This means that not only is Imimobile's (LON:IMO) financial health deteriorating, it currently fits in with the stocks that Piotroski identified as being five times more likely to go bankrupt or delist. Looking at the group's recent financial results, we can see that for the six months ended 30 September 2018, IMImobile PLC revenues increased 26% to £67.2M but the group actually moved from net profit to a net loss of £113k.

Fortify your portfolio with simple, effective tools

The problem areas for Imimobile identified here can be explored in more depth on Stockopedia's research platform. All the best investors have stringent due diligence processes that reduce the chances of them suffering big losses, so why not take a leaf out of their book?

Simple tools can help us better measure and understand the risks we take. That's why the Stockopedia team has been busy building new ways of understanding investment risks and company characteristics. In this webinar, we talk about two or our most popular innovations: StockRank Styles and RiskRatings. These indicators transform a ton of vital financial information into intuitive classifications, allowing you to get an instant feel for any company on any market - sign up for a free trial to see how your stocks stack up.