Lowes Companies Inc (LOW) stock analysis

P/E above its 5-year median

Lowes Companies's P/E of 19.6 is above its own 5-year median of 19.3.

P/E above the industry

Lowes Companies's P/E of 19.6 is above the Consumer discretionary median of 19.6.

EV/EBITDA above its 5-year median

Lowes Companies's EV/EBITDA of 13.0 is above its 5-year median of 13.0.

P/S above the industry

Lowes Companies's price-to-sales of 1.44 is above the Consumer discretionary median of 1.16 (book value is negative, so we use sales).

Trading above fair value

The share price of $231.60 is above our fair value estimate of $201.08.

Margin of safety under 20%

The price is 15.2% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew -3.8% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew 5.2% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -3.1% over the last twelve months, against a 5-year average of 2.7% a year.

Growing faster than the industry

Revenue grew 8.2% over the last twelve months; the Consumer discretionary median is 2.5%.

Guidance lowered

Lowes Companies lowered its Fiscal Year 2026 Total sales outlook on Aug 19, 2026.

Gross margin slipping

Gross margin was 33.1% over the last twelve months, against 33.5% a year earlier.

Return on equity

Needs positive equity and five years of results.

Return on capital over 10%

Return on invested capital was 34.8%, above the 10% that usually covers the cost of capital.

Return on equity against the industry

Needs positive equity.

Earnings grew over 5 years

Net income grew 2.7% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 7.3% over the last twelve months, against a 5-year average of 8.1%.

Net margin above the industry

Lowes Companies's net margin of 7.3% is above the Consumer discretionary median of 6.2%.

Debt level

Needs debt and equity figures.

Debt trend

Needs a balance sheet from five years ago with positive equity.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 24.7% of total debt.

Interest coverage

Interest expense is not reported separately.

Short-term assets cover short-term debts

Current assets are 1.10 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 3.30; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Lowes Companies paid dividends worth 1.6% of the share price over the last twelve months.

Yield below Treasuries

The 1.6% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Lowes Companies yields 1.6%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 40.5% of net income.

Covered by free cash flow

Dividends take 38.5% of free cash flow.