The Kraft Heinz Company Fundamental Analysis (NASDAQ: KHC)
The Kraft Heinz Company Fundamental Analysis (NASDAQ: KHC)
The Kraft Heinz Company (NASDAQ: KHC) shows weak financial fundamentals with a PE ratio of -8.97, profit margin of -13.64%, and ROE of -8.44%. The company generates $24.9B in annual revenue with weak year-over-year growth of -3.50%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 2.7/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze KHC's fundamental strength across five key dimensions:
Efficiency Score
WeakKHC struggles to generate sufficient returns from assets.
Valuation Score
ExcellentKHC trades at attractive valuation levels.
Growth Score
WeakKHC faces weak or negative growth trends.
Financial Health Score
ExcellentKHC maintains a strong and stable balance sheet.
Profitability Score
WeakKHC struggles to sustain strong margins.
Key Financial Metrics
Is KHC Expensive or Cheap?
P/E Ratio
KHC trades at -8.97 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, KHC's PEG of -0.75 indicates potential undervaluation.
Price to Book
The market values The Kraft Heinz Company at 0.85 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at -7.57 times EBITDA. This is generally considered low.
How Well Does KHC Make Money?
Net Profit Margin
For every $100 in sales, The Kraft Heinz Company keeps $-13.64 as profit after all expenses.
Operating Margin
Core operations generate -13.04 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $-8.44 in profit for every $100 of shareholder equity.
ROA
The Kraft Heinz Company generates $-4.65 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
The Kraft Heinz Company produces operating cash flow of $4.62B, showing steady but balanced cash generation.
Free Cash Flow
The Kraft Heinz Company generates strong free cash flow of $3.82B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $3.22 in free cash annually.
FCF Yield
KHC converts 12.49% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
-8.97
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-0.75
vs 25 benchmark
P/B Ratio
Price to book value ratio
0.85
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.22
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.53
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.06
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
-0.08
vs 25 benchmark
ROA
Return on assets percentage
-0.05
vs 25 benchmark
ROCE
Return on capital employed
-0.05
vs 25 benchmark
How KHC Stacks Against Its Sector Peers
| Metric | KHC Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | -8.97 | 20.19 | Better (Cheaper) |
| ROE | -8.44% | 735.00% | Weak |
| Net Margin | -13.64% | -2871.00% (disorted) | Weak |
| Debt/Equity | 0.53 | 0.79 | Strong (Low Leverage) |
| Current Ratio | 1.06 | 2.31 | Neutral |
| ROA | -4.65% | 359.00% | Weak |
KHC outperforms its industry in 2 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews The Kraft Heinz Company's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
-1.86%
Industry Style: Defensive, Dividend, Low Volatility
DecliningEPS CAGR
-1791.94%
Industry Style: Defensive, Dividend, Low Volatility
DecliningFCF CAGR
-6.73%
Industry Style: Defensive, Dividend, Low Volatility
Declining