Nestlé S.A.
Nestlé S.A. Fundamental Analysis
Nestlé S.A. (NESM.DE) shows moderate financial fundamentals with a PE ratio of 22.14, profit margin of 11.36%, and ROE of 30.68%. The company generates $90.6B in annual revenue with weak year-over-year growth of -1.75%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 35.8/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze NESM.DE's fundamental strength across five key dimensions:
Efficiency Score
WeakNESM.DE struggles to generate sufficient returns from assets.
Valuation Score
ExcellentNESM.DE trades at attractive valuation levels.
Growth Score
WeakNESM.DE faces weak or negative growth trends.
Financial Health Score
WeakNESM.DE carries high financial risk with limited liquidity.
Profitability Score
ModerateNESM.DE maintains healthy but balanced margins.
Key Financial Metrics
Is NESM.DE Expensive or Cheap?
P/E Ratio
NESM.DE trades at 22.14 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, NESM.DE's PEG of -4.22 indicates potential undervaluation.
Price to Book
The market values Nestlé S.A. at 7.37 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 9.16 times EBITDA. This is generally considered low.
How Well Does NESM.DE Make Money?
Net Profit Margin
For every $100 in sales, Nestlé S.A. keeps $11.36 as profit after all expenses.
Operating Margin
Core operations generate 16.04 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $30.68 in profit for every $100 of shareholder equity.
ROA
Nestlé S.A. generates $7.37 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Nestlé S.A. produces operating cash flow of $14.59B, showing steady but balanced cash generation.
Free Cash Flow
Nestlé S.A. generates strong free cash flow of $9.36B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $3.62 in free cash annually.
FCF Yield
NESM.DE converts 4.09% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
22.14
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-4.22
vs 25 benchmark
P/B Ratio
Price to book value ratio
7.37
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.53
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
2.28
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.71
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.31
vs 25 benchmark
ROA
Return on assets percentage
0.07
vs 25 benchmark
ROCE
Return on capital employed
0.16
vs 25 benchmark
How NESM.DE Stacks Against Its Sector Peers
| Metric | NESM.DE Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 22.14 | 22.36 | Neutral |
| ROE | 30.68% | 1238.00% | Weak |
| Net Margin | 11.36% | -5096.00% (disorted) | Strong |
| Debt/Equity | 2.28 | 1.23 | Weak (High Leverage) |
| Current Ratio | 0.71 | 2.47 | Weak Liquidity |
| ROA | 7.37% | -191995.00% (disorted) | Weak |
NESM.DE outperforms its industry in 1 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Nestlé S.A.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
11.79%
Industry Style: Defensive, Dividend, Low Volatility
High GrowthEPS CAGR
-2.61%
Industry Style: Defensive, Dividend, Low Volatility
DecliningFCF CAGR
18.70%
Industry Style: Defensive, Dividend, Low Volatility
High Growth