Luckin Coffee Inc.
Luckin Coffee Inc. Fundamental Analysis
Luckin Coffee Inc. (LKNCY) shows moderate financial fundamentals with a PE ratio of 21.43, profit margin of 8.45%, and ROE of 29.05%. The company generates $46.2B in annual revenue with strong year-over-year growth of 40.42%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 85.1/100 based on profitability, valuation, growth, and balance sheet metrics. The B+ grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze LKNCY's fundamental strength across five key dimensions:
Efficiency Score
ExcellentLKNCY demonstrates superior asset utilization.
Valuation Score
ExcellentLKNCY trades at attractive valuation levels.
Growth Score
ModerateLKNCY shows steady but slowing expansion.
Financial Health Score
ExcellentLKNCY maintains a strong and stable balance sheet.
Profitability Score
ModerateLKNCY maintains healthy but balanced margins.
Key Financial Metrics
Is LKNCY Expensive or Cheap?
P/E Ratio
LKNCY trades at 21.43 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, LKNCY's PEG of -4.76 indicates potential undervaluation.
Price to Book
The market values Luckin Coffee Inc. at 5.58 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 11.55 times EBITDA. This signals the market has high growth expectations.
How Well Does LKNCY Make Money?
Net Profit Margin
For every $100 in sales, Luckin Coffee Inc. keeps $8.45 as profit after all expenses.
Operating Margin
Core operations generate 11.38 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $29.05 in profit for every $100 of shareholder equity.
ROA
Luckin Coffee Inc. generates $13.16 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Luckin Coffee Inc. produces operating cash flow of $6.39B, showing steady but balanced cash generation.
Free Cash Flow
Luckin Coffee Inc. produces free cash flow of $4.09B, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $12.79 in free cash annually.
FCF Yield
LKNCY converts 4.91% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
21.43
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-4.76
vs 25 benchmark
P/B Ratio
Price to book value ratio
5.58
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.81
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.46
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.66
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.29
vs 25 benchmark
ROA
Return on assets percentage
0.13
vs 25 benchmark
ROCE
Return on capital employed
0.25
vs 25 benchmark
How LKNCY Stacks Against Its Sector Peers
| Metric | LKNCY Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 21.43 | 24.93 | Better (Cheaper) |
| ROE | 29.05% | 1149.00% | Weak |
| Net Margin | 8.45% | 749.00% | Weak |
| Debt/Equity | 0.46 | 0.76 | Strong (Low Leverage) |
| Current Ratio | 1.66 | 9.21 | Neutral |
| ROA | 13.16% | 1274.00% | Weak |
LKNCY outperforms its industry in 2 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Luckin Coffee Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
631.03%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
150.65%
Industry Style: Cyclical, Growth, Discretionary
High GrowthFCF CAGR
223.11%
Industry Style: Cyclical, Growth, Discretionary
High Growth