Ralph Lauren Corporation
Ralph Lauren Corporation Fundamental Analysis
Ralph Lauren Corporation (RL) shows moderate financial fundamentals with a PE ratio of 24.33, profit margin of 11.73%, and ROE of 34.74%. The company generates $7.8B in annual revenue with moderate year-over-year growth of 6.75%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 66.6/100 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 RL's fundamental strength across five key dimensions:
Efficiency Score
ExcellentRL demonstrates superior asset utilization.
Valuation Score
ModerateRL shows balanced valuation metrics.
Growth Score
ExcellentRL delivers strong and consistent growth momentum.
Financial Health Score
ModerateRL shows balanced financial health with some risks.
Profitability Score
ModerateRL maintains healthy but balanced margins.
Key Financial Metrics
Is RL Expensive or Cheap?
P/E Ratio
RL trades at 24.33 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, RL's PEG of 2.90 indicates potential overvaluation.
Price to Book
The market values Ralph Lauren Corporation at 7.74 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 14.32 times EBITDA. This signals the market has high growth expectations.
How Well Does RL Make Money?
Net Profit Margin
For every $100 in sales, Ralph Lauren Corporation keeps $11.73 as profit after all expenses.
Operating Margin
Core operations generate 15.03 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $34.74 in profit for every $100 of shareholder equity.
ROA
Ralph Lauren Corporation generates $11.75 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Ralph Lauren Corporation produces operating cash flow of $1.12B, showing steady but balanced cash generation.
Free Cash Flow
Ralph Lauren Corporation produces free cash flow of $689.28M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $11.37 in free cash annually.
FCF Yield
RL converts 3.13% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
24.33
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
2.90
vs 25 benchmark
P/B Ratio
Price to book value ratio
7.74
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.83
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.39
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.10
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.35
vs 25 benchmark
ROA
Return on assets percentage
0.12
vs 25 benchmark
ROCE
Return on capital employed
0.20
vs 25 benchmark
How RL Stacks Against Its Sector Peers
| Metric | RL Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 24.33 | 24.85 | Neutral |
| ROE | 34.74% | 1165.00% | Weak |
| Net Margin | 11.73% | 749.00% | Weak |
| Debt/Equity | 1.39 | 0.76 | Weak (High Leverage) |
| Current Ratio | 2.10 | 9.23 | Strong Liquidity |
| ROA | 11.75% | 1271.00% | Weak |
RL outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Ralph Lauren Corporation's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
39.16%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
134.07%
Industry Style: Cyclical, Growth, Discretionary
High GrowthFCF CAGR
98.19%
Industry Style: Cyclical, Growth, Discretionary
High Growth