Levi Strauss & Co.
Levi Strauss & Co. Fundamental Analysis
Levi Strauss & Co. (LEVI) shows moderate financial fundamentals with a PE ratio of 14.78, profit margin of 9.20%, and ROE of 27.00%. The company generates $6.3B in annual revenue with weak year-over-year growth of 2.85%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 48.6/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze LEVI's fundamental strength across five key dimensions:
Efficiency Score
WeakLEVI struggles to generate sufficient returns from assets.
Valuation Score
ExcellentLEVI trades at attractive valuation levels.
Growth Score
WeakLEVI faces weak or negative growth trends.
Financial Health Score
ModerateLEVI shows balanced financial health with some risks.
Profitability Score
ModerateLEVI maintains healthy but balanced margins.
Key Financial Metrics
Is LEVI Expensive or Cheap?
P/E Ratio
LEVI trades at 14.78 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, LEVI's PEG of -3.74 indicates potential undervaluation.
Price to Book
The market values Levi Strauss & Co. at 3.75 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 7.95 times EBITDA. This is generally considered low.
How Well Does LEVI Make Money?
Net Profit Margin
For every $100 in sales, Levi Strauss & Co. keeps $9.20 as profit after all expenses.
Operating Margin
Core operations generate 10.79 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $27.00 in profit for every $100 of shareholder equity.
ROA
Levi Strauss & Co. generates $8.44 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Levi Strauss & Co. generates limited operating cash flow of $550.20M, signaling weaker underlying cash strength.
Free Cash Flow
Levi Strauss & Co. produces free cash flow of $326.97M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $0.83 in free cash annually.
FCF Yield
LEVI converts 3.75% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
14.78
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-3.74
vs 25 benchmark
P/B Ratio
Price to book value ratio
3.75
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.37
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.01
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.55
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.27
vs 25 benchmark
ROA
Return on assets percentage
0.08
vs 25 benchmark
ROCE
Return on capital employed
0.14
vs 25 benchmark
How LEVI Stacks Against Its Sector Peers
| Metric | LEVI Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 14.78 | 24.85 | Better (Cheaper) |
| ROE | 27.00% | 1165.00% | Weak |
| Net Margin | 9.20% | 752.00% | Weak |
| Debt/Equity | 1.01 | 0.76 | Weak (High Leverage) |
| Current Ratio | 1.55 | 9.23 | Neutral |
| ROA | 8.44% | 1280.00% | Weak |
LEVI outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Levi Strauss & Co.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
7.74%
Industry Style: Cyclical, Growth, Discretionary
GrowingEPS CAGR
-47.86%
Industry Style: Cyclical, Growth, Discretionary
DecliningFCF CAGR
112.95%
Industry Style: Cyclical, Growth, Discretionary
High Growth