Leggett & Platt Inc (LEG, Financial), a prominent player in the Furnishings, Fixtures & Appliances industry, is currently trading at $30.48 with a market capitalization of $4.06 billion. The company's stock price has seen a gain of 4.15% today and a 2.75% increase over the past four weeks. In this article, we will delve into LEG's GF Score of 85/100, indicating good outperformance potential, and analyze its financial strength, profitability, growth, GF value, and momentum ranks. The GF Score is a stock performance ranking system developed by GuruFocus, which has been found to be closely correlated to the long-term performances of stocks.
Financial Strength Analysis
LEG's Financial Strength Rank stands at 5/10. This rank measures the robustness of a company's financial situation, considering factors such as its debt burden, debt to revenue ratio, and Altman Z-Score. LEG's interest coverage is 4.19, indicating its ability to cover interest expenses with its operating profit. The company's debt to revenue ratio is 0.47, suggesting a moderate level of debt relative to its revenue. Its Altman Z score of 2.93 indicates a low risk of bankruptcy.
Profitability Rank Analysis
The Profitability Rank of LEG is 8/10, reflecting its strong profitability. The company's Operating Margin is 8.53%, and its Piotroski F-Score is 5, indicating a stable financial situation. Despite a negative 5-year average trend in the operating margin of -2.90%, the company has consistently been profitable over the past 10 years. Its predictability rank is 3.5, suggesting a high level of predictability in its business operations.
Growth Rank Analysis
LEG's Growth Rank is 8/10, indicating a strong growth trajectory. The company's 5-year revenue growth rate is 5.10%, and its 3-year revenue growth rate is 2.40%. Its 5-year EBITDA growth rate is 3.80%, suggesting a steady increase in its earnings before interest, taxes, depreciation, and amortization.
GF Value Rank Analysis
The company's GF Value Rank is 10/10, indicating that it is undervalued. This rank is determined by the price-to-GF-Value ratio, a proprietary metric calculated based on historical multiples, an adjustment factor based on a company's past returns and growth, and future estimates of the business' performance.
Momentum Rank Analysis
LEG's Momentum Rank is 4/10, reflecting a moderate momentum in its stock price. This rank is determined using the standardized momentum ratio and other momentum indicators.
Competitor Analysis
When compared to its competitors in the same industry, LEG's GF Score of 85/100 is higher than MillerKnoll Inc (MLKN, Financial) with a GF Score of 75, but lower than Patrick Industries Inc (PATK, Financial) with a GF Score of 90. However, it significantly outperforms MasterBrand Inc (MBC, Financial) with a GF Score of 24.
Conclusion
In conclusion, LEG's overall GF Score of 85/100 suggests good outperformance potential. Its strong profitability, growth, and undervalued status, coupled with its moderate financial strength and momentum, make it an attractive investment option. However, potential investors should also consider the competitive landscape and other market factors before making investment decisions.
