Graco Inc.
Graco Inc. Fundamental Analysis
Graco Inc. (GGG) shows moderate financial fundamentals with a PE ratio of 25.96, profit margin of 22.96%, and ROE of 19.65%. The company generates $2.3B in annual revenue with moderate year-over-year growth of 5.83%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 76.0/100 based on profitability, valuation, growth, and balance sheet metrics. The B grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze GGG's fundamental strength across five key dimensions:
Efficiency Score
ExcellentGGG demonstrates superior asset utilization.
Valuation Score
WeakGGG trades at a premium to fair value.
Growth Score
ModerateGGG shows steady but slowing expansion.
Financial Health Score
ExcellentGGG maintains a strong and stable balance sheet.
Profitability Score
ExcellentGGG achieves industry-leading margins.
Key Financial Metrics
Is GGG Expensive or Cheap?
P/E Ratio
GGG trades at 25.96 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, GGG's PEG of 3.26 indicates potential overvaluation.
Price to Book
The market values Graco Inc. at 4.89 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 19.72 times EBITDA. This signals the market has high growth expectations.
How Well Does GGG Make Money?
Net Profit Margin
For every $100 in sales, Graco Inc. keeps $22.96 as profit after all expenses.
Operating Margin
Core operations generate 26.88 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $19.65 in profit for every $100 of shareholder equity.
ROA
Graco Inc. generates $15.48 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Graco Inc. generates strong operating cash flow of $680.57M, reflecting robust business health.
Free Cash Flow
Graco Inc. generates strong free cash flow of $633.21M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $3.82 in free cash annually.
FCF Yield
GGG converts 4.68% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
25.96
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
3.26
vs 25 benchmark
P/B Ratio
Price to book value ratio
4.89
vs 25 benchmark
P/S Ratio
Price to sales ratio
5.98
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.02
vs 25 benchmark
Current Ratio
Current assets to current liabilities
3.56
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.20
vs 25 benchmark
ROA
Return on assets percentage
0.15
vs 25 benchmark
ROCE
Return on capital employed
0.21
vs 25 benchmark
How GGG Stacks Against Its Sector Peers
| Metric | GGG Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 25.96 | 26.50 | Neutral |
| ROE | 19.65% | 1289.00% | Weak |
| Net Margin | 22.96% | -41634.00% (disorted) | Strong |
| Debt/Equity | 0.02 | 0.71 | Strong (Low Leverage) |
| Current Ratio | 3.56 | 10.09 | Strong Liquidity |
| ROA | 15.48% | -1505238.00% (disorted) | Strong |
GGG outperforms its industry in 4 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Graco Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
36.42%
Industry Style: Cyclical, Value, Infrastructure
High GrowthEPS CAGR
58.94%
Industry Style: Cyclical, Value, Infrastructure
High GrowthFCF CAGR
74.61%
Industry Style: Cyclical, Value, Infrastructure
High Growth