Lincoln Electric Holdings, Inc.
Lincoln Electric Holdings, Inc. Fundamental Analysis
Lincoln Electric Holdings, Inc. (LECO) shows moderate financial fundamentals with a PE ratio of 27.54, profit margin of 12.30%, and ROE of 37.15%. The company generates $4.2B in annual revenue with weak year-over-year growth of -4.37%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 59.7/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze LECO's fundamental strength across five key dimensions:
Efficiency Score
ExcellentLECO demonstrates superior asset utilization.
Valuation Score
ModerateLECO shows balanced valuation metrics.
Growth Score
WeakLECO faces weak or negative growth trends.
Financial Health Score
ExcellentLECO maintains a strong and stable balance sheet.
Profitability Score
ModerateLECO maintains healthy but balanced margins.
Key Financial Metrics
Is LECO Expensive or Cheap?
P/E Ratio
LECO trades at 27.54 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, LECO's PEG of 1.94 indicates fair valuation.
Price to Book
The market values Lincoln Electric Holdings, Inc. at 9.75 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 16.51 times EBITDA. This signals the market has high growth expectations.
How Well Does LECO Make Money?
Net Profit Margin
For every $100 in sales, Lincoln Electric Holdings, Inc. keeps $12.30 as profit after all expenses.
Operating Margin
Core operations generate 17.19 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $37.15 in profit for every $100 of shareholder equity.
ROA
Lincoln Electric Holdings, Inc. generates $13.78 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Lincoln Electric Holdings, Inc. produces operating cash flow of $659.76M, showing steady but balanced cash generation.
Free Cash Flow
Lincoln Electric Holdings, Inc. generates strong free cash flow of $533.06M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $9.72 in free cash annually.
FCF Yield
LECO converts 3.75% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
27.54
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
1.94
vs 25 benchmark
P/B Ratio
Price to book value ratio
9.75
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.38
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.88
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.82
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.37
vs 25 benchmark
ROA
Return on assets percentage
0.14
vs 25 benchmark
ROCE
Return on capital employed
0.26
vs 25 benchmark
How LECO Stacks Against Its Sector Peers
| Metric | LECO Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 27.54 | 26.45 | Neutral |
| ROE | 37.15% | 1289.00% | Weak |
| Net Margin | 12.30% | -41634.00% (disorted) | Strong |
| Debt/Equity | 0.88 | 0.71 | Weak (High Leverage) |
| Current Ratio | 1.82 | 10.09 | Neutral |
| ROA | 13.78% | -1505238.00% (disorted) | Strong |
LECO 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 Lincoln Electric Holdings, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
46.02%
Industry Style: Cyclical, Value, Infrastructure
High GrowthEPS CAGR
73.96%
Industry Style: Cyclical, Value, Infrastructure
High GrowthFCF CAGR
62.52%
Industry Style: Cyclical, Value, Infrastructure
High Growth