Lowe's Companies Inc

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LOW : NYSE : Services
$76.065 -0.035 | -0.046%
Today's Range: 75.69 - 76.44
Avg. Daily Volume: 5398800.0
02/27/17 - 2:57 PM ET

Financial Analysis

LOWE'S COMPANIES INC's gross profit margin for the third quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased. LOWE'S COMPANIES INC has very weak liquidity. Currently, the Quick Ratio is 0.09 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

During the same period, stockholders' equity ("net worth") has decreased by 21.23% 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 FY16 Q3 FY15
Net Sales ($mil)15739.014360.0
EBITDA ($mil)1749.01703.0
EBIT ($mil)1371.01329.0
Net Income ($mil)378.0736.0

Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)1083.01385.0
Total Assets ($mil)35370.033655.0
Total Debt ($mil)15195.012599.0
Equity ($mil)6599.08378.0

Profitability Q3 FY16 Q3 FY15
Gross Profit Margin34.3534.75
EBITDA Margin11.1111.85
Operating Margin8.719.25
Sales Turnover1.771.73
Return on Assets6.898.86
Return on Equity36.9635.62
Debt Q3 FY16 Q3 FY15
Current Ratio1.011.02
Interest Expense168.0144.0
Interest Coverage8.169.23

Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)873.0917.0
Div / share0.350.28
Book value / share7.569.14
Institutional Own % n/a n/a
Avg Daily Volume5314987.06262668.0


BUY. The current P/E ratio indicates a premium compared to an average of 22.53 for the Specialty Retail industry and a value on par with the S&P 500 average of 26.53. To use another comparison, its price-to-book ratio of 10.03 indicates a significant premium versus the S&P 500 average of 2.96 and a significant discount versus the industry average of 18.37. The current price-to-sales ratio is well below the S&P 500 average and is also below the industry average, indicating a discount.

1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
LOW 27.77 Peers 22.53   LOW 11.96 Peers 14.67

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

LOW is trading at a premium to its peers.


Discount. 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 discount to its peers.

1 2 3 4 5
premium   discount
  Price to
1 2 3 4 5
premium   discount
LOW 16.73 Peers 19.53   LOW 0.64 Peers 1.86

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.

1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
LOW 10.03 Peers 18.37   LOW -13.61 Peers 5.04

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.


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

However, LOW is expected to significantly trail its peers on the basis of its earnings growth rate.

1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
LOW 1.06 Peers 1.51   LOW 7.00 Peers 7.39

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.


Average. Comparing a company's sales growth to its industry helps to determine if the company is adding or losing market share.

LOW is keeping pace with its peers on the basis of sales growth.



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