Lowe's Companies, Inc. Fundamental Analysis (NYSE: LOW)
Lowe's Companies, Inc. (NYSE: LOW) shows weak financial fundamentals with a PE ratio of 16.64, profit margin of 7.34%, and ROE of -71.79%. The company generates $90.7B in annual revenue with moderate year-over-year growth of 3.12%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 33.9/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze LOW's fundamental strength across five key dimensions:
Efficiency Score
ExcellentLOW demonstrates superior asset utilization.
Valuation Score
ExcellentLOW trades at attractive valuation levels.
Growth Score
WeakLOW faces weak or negative growth trends.
Financial Health Score
ExcellentLOW maintains a strong and stable balance sheet.
Profitability Score
WeakLOW struggles to sustain strong margins.
Key Financial Metrics
Is LOW Expensive or Cheap?
P/E Ratio
LOW trades at 16.64 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, LOW's PEG of -5.64 indicates potential undervaluation.
Price to Book
The market values Lowe's Companies, Inc. at -14.81 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 5.88 times EBITDA. This is generally considered low.
How Well Does LOW Make Money?
Net Profit Margin
For every $100 in sales, Lowe's Companies, Inc. keeps $7.34 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 $-71.79 in profit for every $100 of shareholder equity.
ROA
Lowe's Companies, Inc. generates $11.89 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Lowe's Companies, Inc. produces operating cash flow of $9.29B, showing steady but balanced cash generation.
Free Cash Flow
Lowe's Companies, Inc. produces free cash flow of $7.02B, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $12.52 in free cash annually.
FCF Yield
LOW converts 6.34% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
16.64
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-5.64
vs 25 benchmark
P/B Ratio
Price to book value ratio
-14.81
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.22
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
-5.65
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.10
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
-0.72
vs 25 benchmark
ROA
Return on assets percentage
0.12
vs 25 benchmark
ROCE
Return on capital employed
0.30
vs 25 benchmark
How LOW Stacks Against Its Sector Peers
| Metric | LOW Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 16.64 | 24.25 | Better (Cheaper) |
| ROE | -71.79% | 1010.00% | Weak |
| Net Margin | 7.34% | -2983.00% (disorted) | Weak |
| Debt/Equity | -5.65 | 0.59 | Strong (Low Leverage) |
| Current Ratio | 1.10 | 2.31 | Neutral |
| ROA | 11.89% | 345.00% | Weak |
LOW outperforms its industry in 2 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Lowe's Companies, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
28.87%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
52.59%
Industry Style: Cyclical, Growth, Discretionary
High GrowthFCF CAGR
19.46%
Industry Style: Cyclical, Growth, Discretionary
High Growth