Harvey Norman Holdings Limited
Harvey Norman Holdings Limited Fundamental Analysis
Harvey Norman Holdings Limited (HNORY) shows moderate financial fundamentals with a PE ratio of 8.52, profit margin of 14.79%, and ROE of 10.93%. The company generates $3.5B in annual revenue with weak year-over-year growth of -1.55%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 45.7/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze HNORY's fundamental strength across five key dimensions:
Efficiency Score
WeakHNORY struggles to generate sufficient returns from assets.
Valuation Score
ExcellentHNORY trades at attractive valuation levels.
Growth Score
WeakHNORY faces weak or negative growth trends.
Financial Health Score
ExcellentHNORY maintains a strong and stable balance sheet.
Profitability Score
WeakHNORY struggles to sustain strong margins.
Key Financial Metrics
Is HNORY Expensive or Cheap?
P/E Ratio
HNORY trades at 8.52 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, HNORY's PEG of 0.29 indicates potential undervaluation.
Price to Book
The market values Harvey Norman Holdings Limited at 0.92 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 2.63 times EBITDA. This is generally considered low.
How Well Does HNORY Make Money?
Net Profit Margin
For every $100 in sales, Harvey Norman Holdings Limited keeps $14.79 as profit after all expenses.
Operating Margin
Core operations generate 20.46 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $10.93 in profit for every $100 of shareholder equity.
ROA
Harvey Norman Holdings Limited generates $6.19 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Harvey Norman Holdings Limited produces operating cash flow of $694.30M, showing steady but balanced cash generation.
Free Cash Flow
Harvey Norman Holdings Limited generates strong free cash flow of $510.74M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $2.05 in free cash annually.
FCF Yield
HNORY converts 11.57% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
8.52
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.29
vs 25 benchmark
P/B Ratio
Price to book value ratio
0.92
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.26
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.48
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.38
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.11
vs 25 benchmark
ROA
Return on assets percentage
0.06
vs 25 benchmark
ROCE
Return on capital employed
0.10
vs 25 benchmark
How HNORY Stacks Against Its Sector Peers
| Metric | HNORY Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 8.52 | 24.85 | Better (Cheaper) |
| ROE | 10.93% | 1165.00% | Weak |
| Net Margin | 14.79% | 749.00% | Weak |
| Debt/Equity | 0.48 | 0.76 | Strong (Low Leverage) |
| Current Ratio | 1.38 | 9.23 | Neutral |
| ROA | 6.19% | 1271.00% | Weak |
HNORY outperforms its industry in 2 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Harvey Norman Holdings Limited's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
63.51%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
-18.40%
Industry Style: Cyclical, Growth, Discretionary
DecliningFCF CAGR
71.51%
Industry Style: Cyclical, Growth, Discretionary
High Growth