The Estée Lauder Companies Inc.
The Estée Lauder Companies Inc. Fundamental Analysis
The Estée Lauder Companies Inc. (EL) shows weak financial fundamentals with a PE ratio of -230.67, profit margin of -1.21%, and ROE of -4.41%. The company generates $14.6B in annual revenue with weak year-over-year growth of -8.46%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of -2.3/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze EL's fundamental strength across five key dimensions:
Efficiency Score
WeakEL struggles to generate sufficient returns from assets.
Valuation Score
ExcellentEL trades at attractive valuation levels.
Growth Score
WeakEL faces weak or negative growth trends.
Financial Health Score
ModerateEL shows balanced financial health with some risks.
Profitability Score
WeakEL struggles to sustain strong margins.
Key Financial Metrics
Is EL Expensive or Cheap?
P/E Ratio
EL trades at -230.67 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, EL's PEG of -2.85 indicates potential undervaluation.
Price to Book
The market values The Estée Lauder Companies Inc. at 10.19 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 20.79 times EBITDA. This signals the market has high growth expectations.
How Well Does EL Make Money?
Net Profit Margin
For every $100 in sales, The Estée Lauder Companies Inc. keeps $-1.21 as profit after all expenses.
Operating Margin
Core operations generate 7.29 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $-4.41 in profit for every $100 of shareholder equity.
ROA
The Estée Lauder Companies Inc. generates $-0.91 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
The Estée Lauder Companies Inc. produces operating cash flow of $1.67B, showing steady but balanced cash generation.
Free Cash Flow
The Estée Lauder Companies Inc. produces free cash flow of $1.13B, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $3.14 in free cash annually.
FCF Yield
EL converts 2.77% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
-230.67
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-2.85
vs 25 benchmark
P/B Ratio
Price to book value ratio
10.19
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.79
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
2.74
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.36
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
-0.04
vs 25 benchmark
ROA
Return on assets percentage
-0.01
vs 25 benchmark
ROCE
Return on capital employed
0.07
vs 25 benchmark
How EL Stacks Against Its Sector Peers
| Metric | EL Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | -230.67 | 23.01 | Better (Cheaper) |
| ROE | -4.41% | 1228.00% | Weak |
| Net Margin | -1.21% | -4010.00% (disorted) | Weak |
| Debt/Equity | 2.74 | 0.78 | Weak (High Leverage) |
| Current Ratio | 1.36 | 2.35 | Neutral |
| ROA | -0.91% | -157546.00% (disorted) | Weak |
EL outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews The Estée Lauder Companies Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
0.10%
Industry Style: Defensive, Dividend, Low Volatility
GrowingEPS CAGR
-265.87%
Industry Style: Defensive, Dividend, Low Volatility
DecliningFCF CAGR
-44.13%
Industry Style: Defensive, Dividend, Low Volatility
Declining