The Scotts Miracle-Gro Company Fundamental Analysis
The Scotts Miracle-Gro Company (SMG) shows weak financial fundamentals with a PE ratio of 35.25, profit margin of 3.27%, and ROE of -33.72%. The company generates $3.4B in annual revenue with N/A year-over-year growth of N/A.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 108.6/100 based on profitability, valuation, growth, and balance sheet metrics. The A grade reflects excellent fundamentals and strong overall stability.
Fundamental Health Score
We analyze SMG's fundamental strength across five key dimensions:
Efficiency Score
WeakSMG struggles to generate sufficient returns from assets.
Valuation Score
ModerateSMG shows balanced valuation metrics.
Growth Score
ModerateSMG shows steady but slowing expansion.
Financial Health Score
ExcellentSMG maintains a strong and stable balance sheet.
Profitability Score
WeakSMG struggles to sustain strong margins.
Key Financial Metrics
Is SMG Expensive or Cheap?
P/E Ratio
SMG trades at 35.25 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, SMG's PEG of 0.17 indicates potential undervaluation.
Price to Book
The market values The Scotts Miracle-Gro Company at -13.58 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 3.08 times EBITDA. This is generally considered low.
How Well Does SMG Make Money?
Net Profit Margin
For every $100 in sales, The Scotts Miracle-Gro Company keeps $3.27 as profit after all expenses.
Operating Margin
Core operations generate 13.58 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $-33.72 in profit for every $100 of shareholder equity.
ROA
The Scotts Miracle-Gro Company generates $3.25 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
The Scotts Miracle-Gro Company produces operating cash flow of $478.77M, showing steady but balanced cash generation.
Free Cash Flow
The Scotts Miracle-Gro Company generates strong free cash flow of $380.24M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $6.54 in free cash annually.
FCF Yield
SMG converts 9.74% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
35.25
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.17
vs 25 benchmark
P/B Ratio
Price to book value ratio
-13.58
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.15
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
-8.19
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.27
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
-0.34
vs 25 benchmark
ROA
Return on assets percentage
0.03
vs 25 benchmark
ROCE
Return on capital employed
0.22
vs 25 benchmark
How SMG Stacks Against Its Sector Peers
| Metric | SMG Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 35.25 | 27.84 | Worse (Expensive) |
| ROE | -33.72% | 1044.00% | Weak |
| Net Margin | 3.27% | -912.00% (disorted) | Weak |
| Debt/Equity | -8.19 | 0.64 | Strong (Low Leverage) |
| Current Ratio | 1.27 | 3.20 | Neutral |
| ROA | 3.25% | 574.00% | Weak |
SMG outperforms its industry in 1 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews The Scotts Miracle-Gro Company's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
N/A
Industry Style: Cyclical, Commodity, Value
EPS CAGR
N/A
Industry Style: Cyclical, Commodity, Value
FCF CAGR
N/A
Industry Style: Cyclical, Commodity, Value