Lowe's Cos. Inc.

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LOW : NYSE : Retail Trade
$97.0 up 0.69 | 0.72%
Today's Range: 95.53 - 96.95
Avg. Daily Volume: 6504500.0
02/20/18 - 10:55 AM ET

Financial Analysis


LOWE'S COMPANIES INC's gross profit margin for the third quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. The company has grown its sales and net income during the past quarter when compared with the same quarter a year ago, and although its growth in net income has outpaced the industry average, its revenue growth has not. LOWE'S COMPANIES INC has very weak liquidity. Currently, the Quick Ratio is 0.06 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity decreased from the same period a year ago, despite already having very weak liquidity to begin with. This would indicate deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has decreased by 12.98% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.

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Income Statement Q3 FY17 Q3 FY16
Net Sales ($mil)16770.015739.0
EBITDA ($mil)1905.01755.0
EBIT ($mil)1547.01371.0
Net Income ($mil)872.0378.0


Balance Sheet Q3 FY17 Q3 FY16
Cash & Equiv. ($mil)828.01083.0
Total Assets ($mil)36783.035370.0
Total Debt ($mil)16038.015195.0
Equity ($mil)5742.06599.0


Profitability Q3 FY17 Q3 FY16
Gross Profit Margin34.0734.35
EBITDA Margin11.3511.15
Operating Margin9.228.71
Sales Turnover1.871.77
Return on Assets9.666.89
Return on Equity61.9236.96
Debt Q3 FY17 Q3 FY16
Current Ratio1.021.01
Debt/Capital0.740.7
Interest Expense164.0168.0
Interest Coverage9.438.16


Share Data Q3 FY17 Q3 FY16
Shares outstanding (mil)831.0873.0
Div / share0.410.35
EPS1.050.43
Book value / share6.917.56
Institutional Own % n/a n/a
Avg Daily Volume6686758.06564021.0

Valuation


BUY. This stock's P/E ratio indicates a discount compared to an average of 24.16 for the Specialty Retail industry and a discount compared to the S&P 500 average of 25.51. To use another comparison, its price-to-book ratio of 13.97 indicates a significant premium versus the S&P 500 average of 3.26 and a significant discount versus the industry average of 38.06. The current price-to-sales ratio is well below the S&P 500 average and is also below the industry average, indicating a discount. Upon assessment of these and other key valuation criteria, LOWE'S COMPANIES INC proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
LOW 23.14 Peers 24.16   LOW 13.96 Peers 15.50

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

LOW is trading at a valuation on par with its peers.

 

Average. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

LOW is trading at a valuation on par to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
LOW 16.09 Peers 21.54   LOW 0.76 Peers 1.44

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

LOW is trading at a valuation on par with its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

LOW trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
LOW 13.97 Peers 38.06   LOW 52.74 Peers 12.42

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

LOW is trading at a significant discount to its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

LOW is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
LOW 1.16 Peers 1.65   LOW 10.30 Peers 5.19

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

LOW is trading at a significant discount to its industry on this measurement.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

LOW has a sales growth rate that significantly exceeds its peers.

 

 

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