The Timken Company
The Timken Company Fundamental Analysis
The Timken Company (TKR) shows weak financial fundamentals with a PE ratio of 23.57, profit margin of 6.29%, and ROE of 9.35%. The company generates $4.6B in annual revenue with weak year-over-year growth of -4.11%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 41.9/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze TKR's fundamental strength across five key dimensions:
Efficiency Score
WeakTKR struggles to generate sufficient returns from assets.
Valuation Score
ExcellentTKR trades at attractive valuation levels.
Growth Score
WeakTKR faces weak or negative growth trends.
Financial Health Score
ExcellentTKR maintains a strong and stable balance sheet.
Profitability Score
WeakTKR struggles to sustain strong margins.
Key Financial Metrics
Is TKR Expensive or Cheap?
P/E Ratio
TKR trades at 23.57 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, TKR's PEG of -7.72 indicates potential undervaluation.
Price to Book
The market values The Timken Company at 2.13 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 6.70 times EBITDA. This is generally considered low.
How Well Does TKR Make Money?
Net Profit Margin
For every $100 in sales, The Timken Company keeps $6.29 as profit after all expenses.
Operating Margin
Core operations generate 12.35 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $9.35 in profit for every $100 of shareholder equity.
ROA
The Timken Company generates $4.32 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
The Timken Company produces operating cash flow of $553.62M, showing steady but balanced cash generation.
Free Cash Flow
The Timken Company produces free cash flow of $405.60M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $5.83 in free cash annually.
FCF Yield
TKR converts 5.99% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
23.57
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-7.72
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.13
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.48
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.68
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.82
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.09
vs 25 benchmark
ROA
Return on assets percentage
0.04
vs 25 benchmark
ROCE
Return on capital employed
0.10
vs 25 benchmark
How TKR Stacks Against Its Sector Peers
| Metric | TKR Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 23.57 | 25.24 | Neutral |
| ROE | 9.35% | 1281.00% | Weak |
| Net Margin | 6.29% | -44434.00% (disorted) | Weak |
| Debt/Equity | 0.68 | 0.75 | Neutral |
| Current Ratio | 2.82 | 10.59 | Strong Liquidity |
| ROA | 4.32% | -1528290.00% (disorted) | Weak |
TKR outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews The Timken Company's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
30.22%
Industry Style: Cyclical, Value, Infrastructure
High GrowthEPS CAGR
5.12%
Industry Style: Cyclical, Value, Infrastructure
GrowingFCF CAGR
-6.68%
Industry Style: Cyclical, Value, Infrastructure
Declining