Lamb Weston Holdings, Inc.
Lamb Weston Holdings, Inc. Fundamental Analysis
Lamb Weston Holdings, Inc. (LW) shows weak financial fundamentals with a PE ratio of 18.21, profit margin of 4.61%, and ROE of 16.90%. The company generates $6.5B in annual revenue with weak year-over-year growth of -0.25%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 34.4/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze LW's fundamental strength across five key dimensions:
Efficiency Score
WeakLW struggles to generate sufficient returns from assets.
Valuation Score
ExcellentLW trades at attractive valuation levels.
Growth Score
WeakLW faces weak or negative growth trends.
Financial Health Score
ModerateLW shows balanced financial health with some risks.
Profitability Score
ModerateLW maintains healthy but balanced margins.
Key Financial Metrics
Is LW Expensive or Cheap?
P/E Ratio
LW trades at 18.21 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, LW's PEG of -0.79 indicates potential undervaluation.
Price to Book
The market values Lamb Weston Holdings, Inc. at 2.99 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 1.72 times EBITDA. This is generally considered low.
How Well Does LW Make Money?
Net Profit Margin
For every $100 in sales, Lamb Weston Holdings, Inc. keeps $4.61 as profit after all expenses.
Operating Margin
Core operations generate 9.33 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $16.90 in profit for every $100 of shareholder equity.
ROA
Lamb Weston Holdings, Inc. generates $4.06 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Lamb Weston Holdings, Inc. produces operating cash flow of $969.26M, showing steady but balanced cash generation.
Free Cash Flow
Lamb Weston Holdings, Inc. produces free cash flow of $650.70M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $4.68 in free cash annually.
FCF Yield
LW converts 11.90% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
18.21
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-0.79
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.99
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.84
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
2.19
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.46
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.17
vs 25 benchmark
ROA
Return on assets percentage
0.04
vs 25 benchmark
ROCE
Return on capital employed
0.10
vs 25 benchmark
How LW Stacks Against Its Sector Peers
| Metric | LW Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 18.21 | 22.36 | Better (Cheaper) |
| ROE | 16.90% | 1238.00% | Weak |
| Net Margin | 4.61% | -5096.00% (disorted) | Weak |
| Debt/Equity | 2.19 | 1.23 | Weak (High Leverage) |
| Current Ratio | 1.46 | 2.47 | Neutral |
| ROA | 4.06% | -191998.00% (disorted) | Weak |
LW outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Lamb Weston Holdings, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
74.90%
Industry Style: Defensive, Dividend, Low Volatility
High GrowthEPS CAGR
0.37%
Industry Style: Defensive, Dividend, Low Volatility
GrowingFCF CAGR
55.53%
Industry Style: Defensive, Dividend, Low Volatility
High Growth