LAMB WESTON HOLDINGS INC (LW) Stock Fundamental Analysis
NYSE:LW - New York Stock Exchange, Inc. - US5132721045 - Common Stock
Taking everything into account, LW scores 4 out of 10 in our fundamental rating. LW was compared to 92 industry peers in the Food Products industry. While LW is still in line with the averages on profitability rating, there are concerns on its financial health. LW has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year LW was profitable.
In the past year LW had a positive cash flow from operations.
In the past 5 years LW has always been profitable.
In the past 5 years LW always reported a positive cash flow from operatings.
1.2 Ratios
LW has a Return On Assets of 4.93%. This is in the better half of the industry: LW outperforms 65.12% of its industry peers.
LW has a Return On Equity of 22.48%. This is amongst the best in the industry. LW outperforms 93.02% of its industry peers.
LW's Return On Invested Capital of 8.95% is fine compared to the rest of the industry. LW outperforms 79.07% of its industry peers.
LW had an Average Return On Invested Capital over the past 3 years of 11.50%. This is above the industry average of 8.99%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.93% | ||
| ROE | 22.48% | ||
| ROIC | 8.95% |
ROA(3y)10.06%
ROA(5y)9.11%
ROE(3y)55.93%
ROE(5y)77.28%
ROIC(3y)11.5%
ROIC(5y)10.81%
1.3 Margins
The Profit Margin of LW (5.80%) is better than 73.26% of its industry peers.
In the last couple of years the Profit Margin of LW has declined.
LW has a better Operating Margin (11.90%) than 77.91% of its industry peers.
LW's Operating Margin has been stable in the last couple of years.
LW has a Gross Margin (22.54%) which is comparable to the rest of the industry.
LW's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.9% | ||
| PM (TTM) | 5.8% | ||
| GM | 22.54% |
OM growth 3Y8.95%
OM growth 5Y-1.27%
PM growth 3Y9.02%
PM growth 5Y-2.07%
GM growth 3Y6.42%
GM growth 5Y0.45%
2. Health
2.1 Basic Checks
LW has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
LW has less shares outstanding than it did 1 year ago.
The number of shares outstanding for LW has been reduced compared to 5 years ago.
LW has a better debt/assets ratio than last year.
2.2 Solvency
LW has an Altman-Z score of 2.65. This is not the best score and indicates that LW is in the grey zone with still only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 2.65, LW perfoms like the industry average, outperforming 56.98% of the companies in the same industry.
A Debt/Equity ratio of 2.46 is on the high side and indicates that LW has dependencies on debt financing.
LW has a Debt to Equity ratio of 2.46. This is amonst the worse of the industry: LW underperforms 90.70% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.46 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 2.65 |
ROIC/WACC1.18
WACC7.58%
2.3 Liquidity
LW has a Current Ratio of 1.35. This is a normal value and indicates that LW is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.35, LW perfoms like the industry average, outperforming 43.02% of the companies in the same industry.
LW has a Quick Ratio of 1.35. This is a bad value and indicates that LW is not financially healthy enough and could expect problems in meeting its short term obligations.
LW has a worse Quick ratio (0.53) than 75.58% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.35 | ||
| Quick Ratio | 0.53 |
3. Growth
3.1 Past
LW shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -41.19%.
Measured over the past years, LW shows a quite strong growth in Earnings Per Share. The EPS has been growing by 9.46% on average per year.
LW shows a decrease in Revenue. In the last year, the revenue decreased by -0.33%.
The Revenue has been growing by 11.48% on average over the past years. This is quite good.
EPS 1Y (TTM)-41.19%
EPS 3Y32.81%
EPS 5Y9.46%
EPS Q2Q%-54.48%
Revenue 1Y (TTM)-0.33%
Revenue growth 3Y20.78%
Revenue growth 5Y11.48%
Sales Q2Q%-7.57%
3.2 Future
LW is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.77% yearly.
The Revenue is expected to grow by 3.97% on average over the next years.
EPS Next Y-14.42%
EPS Next 2Y0.46%
EPS Next 3Y3.13%
EPS Next 5Y8.77%
Revenue Next Year-3.08%
Revenue Next 2Y-0.45%
Revenue Next 3Y0.75%
Revenue Next 5Y3.97%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 17.83, the valuation of LW can be described as rather expensive.
Based on the Price/Earnings ratio, LW is valued a bit cheaper than 62.79% of the companies in the same industry.
LW is valuated rather cheaply when we compare the Price/Earnings ratio to 27.96, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 11.77, which indicates a very decent valuation of LW.
Compared to the rest of the industry, the Price/Forward Earnings ratio of LW indicates a rather cheap valuation: LW is cheaper than 82.56% of the companies listed in the same industry.
LW is valuated cheaply when we compare the Price/Forward Earnings ratio to 24.11, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.83 | ||
| Fwd PE | 11.77 |
4.2 Price Multiples
LW's Enterprise Value to EBITDA is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 10.72 |
4.3 Compensation for Growth
LW has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.88
EPS Next 2Y0.46%
EPS Next 3Y3.13%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.43%, LW has a reasonable but not impressive dividend return.
In the last 3 months the price of LW has falen by -23.19%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
Compared to an average industry Dividend Yield of 3.87, LW pays a bit more dividend than its industry peers.
LW's Dividend Yield is comparable with the S&P500 average which is at 2.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.43% |
5.2 History
The dividend of LW is nicely growing with an annual growth rate of 9.19%!
LW has been paying a dividend for over 5 years, so it has already some track record.
LW has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)9.19%
Div Incr Years7
Div Non Decr Years7
5.3 Sustainability
LW pays out 53.31% of its income as dividend. This is a bit on the high side, but may be sustainable.
The dividend of LW is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP53.31%
EPS Next 2Y0.46%
EPS Next 3Y3.13%
LAMB WESTON HOLDINGS INC
NYSE:LW (1/17/2025, 8:13:23 PM)
After market: 60.08 0 (0%)60.08
+1.01 (+1.71%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners98.78%
Inst Owner Change0.02%
Ins Owners0.74%
Ins Owner Change8.41%
Market Cap8.57B
Analysts74.29
Price Target71.58 (19.14%)
Short Float %6.53%
Short Ratio3.61
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.43% |
Yearly Dividend1.2
Dividend Growth(5Y)9.19%
DP53.31%
Div Incr Years7
Div Non Decr Years7
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-20.26%
Min EPS beat(2)-39.21%
Max EPS beat(2)-1.31%
EPS beat(4)0
Avg EPS beat(4)-25.07%
Min EPS beat(4)-39.85%
Max EPS beat(4)-1.31%
EPS beat(8)3
Avg EPS beat(8)-0.09%
EPS beat(12)7
Avg EPS beat(12)16.63%
EPS beat(16)9
Avg EPS beat(16)11.72%
Revenue beat(2)1
Avg Revenue beat(2)-2.02%
Min Revenue beat(2)-7.3%
Max Revenue beat(2)3.25%
Revenue beat(4)1
Avg Revenue beat(4)-6.52%
Min Revenue beat(4)-13.91%
Max Revenue beat(4)3.25%
Revenue beat(8)2
Avg Revenue beat(8)-2.92%
Revenue beat(12)4
Avg Revenue beat(12)-1.53%
Revenue beat(16)6
Avg Revenue beat(16)-0.79%
PT rev (1m)-10.39%
PT rev (3m)1.8%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-21.77%
EPS NY rev (1m)-0.93%
EPS NY rev (3m)-6.53%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.09%
Revenue NY rev (1m)-4.51%
Revenue NY rev (3m)-3.98%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.83 | ||
| Fwd PE | 11.77 | ||
| P/S | 1.35 | ||
| P/FCF | N/A | ||
| P/OCF | 11.1 | ||
| P/B | 5.25 | ||
| P/tB | 17.02 | ||
| EV/EBITDA | 10.72 |
EPS(TTM)3.37
EY5.61%
EPS(NY)5.11
Fwd EY8.5%
FCF(TTM)-1.12
FCFYN/A
OCF(TTM)5.41
OCFY9.01%
SpS44.34
BVpS11.45
TBVpS3.53
PEG (NY)N/A
PEG (5Y)1.88
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.93% | ||
| ROE | 22.48% | ||
| ROCE | 12.92% | ||
| ROIC | 8.95% | ||
| ROICexc | 9.07% | ||
| ROICexgc | 11.14% | ||
| OM | 11.9% | ||
| PM (TTM) | 5.8% | ||
| GM | 22.54% | ||
| FCFM | N/A |
ROA(3y)10.06%
ROA(5y)9.11%
ROE(3y)55.93%
ROE(5y)77.28%
ROIC(3y)11.5%
ROIC(5y)10.81%
ROICexc(3y)12.37%
ROICexc(5y)12.84%
ROICexgc(3y)15.2%
ROICexgc(5y)15.33%
ROCE(3y)16.24%
ROCE(5y)15.46%
ROICexcg growth 3Y4.73%
ROICexcg growth 5Y-5.56%
ROICexc growth 3Y2.18%
ROICexc growth 5Y-7.67%
OM growth 3Y8.95%
OM growth 5Y-1.27%
PM growth 3Y9.02%
PM growth 5Y-2.07%
GM growth 3Y6.42%
GM growth 5Y0.45%
F-Score5
Asset Turnover0.85
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.46 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 3.55 | ||
| Cap/Depr | 247.04% | ||
| Cap/Sales | 14.73% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 68.36% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.35 | ||
| Quick Ratio | 0.53 | ||
| Altman-Z | 2.65 |
F-Score5
WACC7.58%
ROIC/WACC1.18
Cap/Depr(3y)271.04%
Cap/Depr(5y)202.57%
Cap/Sales(3y)12.19%
Cap/Sales(5y)9.3%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-41.19%
EPS 3Y32.81%
EPS 5Y9.46%
EPS Q2Q%-54.48%
EPS Next Y-14.42%
EPS Next 2Y0.46%
EPS Next 3Y3.13%
EPS Next 5Y8.77%
Revenue 1Y (TTM)-0.33%
Revenue growth 3Y20.78%
Revenue growth 5Y11.48%
Sales Q2Q%-7.57%
Revenue Next Year-3.08%
Revenue Next 2Y-0.45%
Revenue Next 3Y0.75%
Revenue Next 5Y3.97%
EBIT growth 1Y-32.35%
EBIT growth 3Y31.59%
EBIT growth 5Y10.06%
EBIT Next Year3.02%
EBIT Next 3Y7.25%
EBIT Next 5Y5.9%
FCF growth 1Y-327.57%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y54.89%
OCF growth 3Y13%
OCF growth 5Y3.23%