Harvey Norman Holdings Limited
Harvey Norman Holdings Limited Fundamental Analysis
Harvey Norman Holdings Limited (HVN.AX) shows moderate financial fundamentals with a PE ratio of 10.51, profit margin of 12.89%, and ROE of 11.55%. The company generates $4.3B in annual revenue with moderate year-over-year growth of 5.09%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 47.5/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze HVN.AX's fundamental strength across five key dimensions:
Efficiency Score
WeakHVN.AX struggles to generate sufficient returns from assets.
Valuation Score
ExcellentHVN.AX trades at attractive valuation levels.
Growth Score
ExcellentHVN.AX delivers strong and consistent growth momentum.
Financial Health Score
ExcellentHVN.AX maintains a strong and stable balance sheet.
Profitability Score
WeakHVN.AX struggles to sustain strong margins.
Key Financial Metrics
Is HVN.AX Expensive or Cheap?
P/E Ratio
HVN.AX trades at 10.51 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, HVN.AX's PEG of 1.08 indicates fair valuation.
Price to Book
The market values Harvey Norman Holdings Limited at 1.20 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 2.45 times EBITDA. This is generally considered low.
How Well Does HVN.AX Make Money?
Net Profit Margin
For every $100 in sales, Harvey Norman Holdings Limited keeps $12.89 as profit after all expenses.
Operating Margin
Core operations generate 18.07 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $11.55 in profit for every $100 of shareholder equity.
ROA
Harvey Norman Holdings Limited generates $6.39 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 $639.09M, showing steady but balanced cash generation.
Free Cash Flow
Harvey Norman Holdings Limited generates strong free cash flow of $498.02M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $0.40 in free cash annually.
FCF Yield
HVN.AX converts 8.45% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
10.51
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
1.08
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.20
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.36
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.76
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.64
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.12
vs 25 benchmark
ROA
Return on assets percentage
0.06
vs 25 benchmark
ROCE
Return on capital employed
0.10
vs 25 benchmark
How HVN.AX Stacks Against Its Sector Peers
| Metric | HVN.AX Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 10.51 | 23.78 | Better (Cheaper) |
| ROE | 11.55% | 1098.00% | Weak |
| Net Margin | 12.89% | -626.00% (disorted) | Strong |
| Debt/Equity | 0.76 | 0.86 | Neutral |
| Current Ratio | 1.64 | 2.64 | Neutral |
| ROA | 6.39% | -8081.00% (disorted) | Weak |
HVN.AX outperforms its industry in 2 out of 6 key metrics, particularly excelling in Net Margin, 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
76.75%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
6.09%
Industry Style: Cyclical, Growth, Discretionary
GrowingFCF CAGR
-35.35%
Industry Style: Cyclical, Growth, Discretionary
Declining