Lamb Weston Holdings, Inc.
Lamb Weston Holdings, Inc. Fundamental Analysis
Lamb Weston Holdings, Inc. (LW) shows moderate financial fundamentals with a PE ratio of 16.74, profit margin of 6.06%, and ROE of 22.69%. The company generates $6.5B in annual revenue with strong year-over-year growth of 20.88%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 58.7/100 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 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
ModerateLW shows steady but slowing expansion.
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 16.74 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, LW's PEG of 0.50 indicates potential undervaluation.
Price to Book
The market values Lamb Weston Holdings, Inc. at 3.74 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 2.42 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 $6.06 as profit after all expenses.
Operating Margin
Core operations generate 11.28 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $22.69 in profit for every $100 of shareholder equity.
ROA
Lamb Weston Holdings, Inc. generates $5.35 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 $969.07M, showing steady but balanced cash generation.
Free Cash Flow
Lamb Weston Holdings, Inc. generates strong free cash flow of $650.58M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $4.67 in free cash annually.
FCF Yield
LW converts 9.91% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
16.74
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.50
vs 25 benchmark
P/B Ratio
Price to book value ratio
3.74
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.01
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
2.25
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.43
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.23
vs 25 benchmark
ROA
Return on assets percentage
0.05
vs 25 benchmark
ROCE
Return on capital employed
0.12
vs 25 benchmark
How LW Stacks Against Its Sector Peers
| Metric | LW Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 16.74 | 23.01 | Better (Cheaper) |
| ROE | 22.69% | 1228.00% | Weak |
| Net Margin | 6.06% | -4010.00% (disorted) | Weak |
| Debt/Equity | 2.25 | 0.78 | Weak (High Leverage) |
| Current Ratio | 1.43 | 2.35 | Neutral |
| ROA | 5.35% | -157546.00% (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
74.07%
Industry Style: Defensive, Dividend, Low Volatility
High GrowthEPS CAGR
53.26%
Industry Style: Defensive, Dividend, Low Volatility
High GrowthFCF CAGR
18.52%
Industry Style: Defensive, Dividend, Low Volatility
High Growth