Lenovo Group (LNVGY) AI Stock Analysis

• Market Cap: $14.10B
• Dividend Yield: 4.03%
• Average Volume (3M): 32.66K
• Price to Earnings (P/E): 8.6
• Beta (1Y): 0.53
• Revenue Growth: 19.41%
• EPS Growth: 36.65%
• Country: US
• Employees: 69,500
• Sector: Technology
• Sector Strength: 88
• Industry: Computer Hardware
• EPS (TTM): 0.50
• Shares Outstanding: 620,233,000
• 10 Day Avg. Volume: 4,907
• 30 Day Avg. Volume: 32,659
• PEG Ratio: 0.45
• Price to Book (P/B): 2.72
• Price to Sales (P/S): 0.24
• P/FCF Ratio: -322.05
• Enterprise Value/Market Cap: 0.98
• Enterprise Value/Revenue: 0.18
• Enterprise Value/Gross Profit: 1.20
• Enterprise Value/Ebitda: 4.09
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 74 Outperform
• Price Target: $28.00 ▲(12.36% Upside)

Lenovo's strong financial performance and attractive valuation are the primary drivers of its overall score. The company's robust revenue growth, profitability, and strategic focus on AI provide a positive outlook. However, technical analysis indicates a bearish trend, and concerns about rising component costs present potential risks.

Positive Factors

AI Revenue Growth

The significant growth in AI-related revenues indicates Lenovo's strategic focus on AI, which is likely to drive long-term growth and market leadership in emerging tech sectors.

Strong Cash Flow

Robust cash flow generation enhances Lenovo's liquidity and financial flexibility, allowing for strategic investments and resilience against market fluctuations.

Infrastructure Solutions Growth

Strong growth in infrastructure solutions, particularly in AI infrastructure, positions Lenovo well in the expanding data center market, supporting future revenue streams.

Negative Factors

Rising Component Costs

Increasing component costs could pressure margins, potentially affecting profitability if not managed effectively, posing a risk to financial performance.

Low Equity Ratio

A relatively low equity ratio suggests potential vulnerability to financial fluctuations, which could impact Lenovo's ability to withstand economic downturns.

Gross Margin Decline

A decline in gross profit margin indicates potential cost pressures, which could affect Lenovo's profitability if not addressed through cost management or pricing strategies.

Lenovo Group Business Overview & Revenue Model

Company Description

Lenovo Group Limited, an investment holding company, develops, manufactures, and markets technology products and services. It operates through Intelligent Devices Group, Infrastructure Solutions Group, and Solutions and Services Group segments. The company offers commercial and consumer personal computers, as well as servers and workstations; and a family of mobile Internet devices, including tablets and smartphones. It also provides laptops, monitors, accessories, smart home and collaboration solutions, augmented and virtual reality, commercial internet of things, and smart infrastructure data center solutions. In addition, the company manufactures and distributes IT products, computers, computer hardware, and peripheral equipment; and offers IT, business planning, management, supply chain, finance, administration support, procurement agency, data management, intellectual property, and investment management services. Further, it is involved in the retail and service business for consumer electronic products and related digital services; development, ownership, licensing, and sale of communications hardware and software; and develops software and applications. Additionally, the company is involved in motherboard design and system, full-rack assembly across server, storage, and other products; and provides device-, infrastructure-, and software-as-a-service. It operates in China, the Asia Pacific, Europe, the Middle East, Africa, and the Americas. Lenovo Group Limited was founded in 1984 and is based in Quarry Bay, Hong Kong.

How the Company Makes Money

Lenovo generates revenue primarily through the sale of hardware products, including PCs, tablets, smartphones, and data center equipment. The company has a diverse revenue model that includes direct sales to consumers, business-to-business (B2B) sales to enterprises, and partnerships with distributors and retailers. Key revenue streams are derived from the sale of PCs and laptops, which remain the largest segment, followed by mobile devices and data center solutions. Additionally, Lenovo offers services such as warranty support, repair services, and software solutions, which contribute to recurring revenue. Strategic partnerships with major tech firms and collaborations for cloud services further enhance its earnings potential. The company's global presence and investment in research and development also play significant roles in maintaining competitive advantage and driving sales growth.

Lenovo Group Financial Statement Overview

Summary

Lenovo Group demonstrates solid financial health with strong revenue growth and profitability metrics. The balance sheet reflects a stable leverage position and effective equity utilization, though the low equity ratio warrants monitoring. Cash flow performance is particularly strong, with significant free cash flow growth enhancing liquidity. Overall, Lenovo is well-positioned in the computer hardware industry, with a positive outlook supported by efficient operations and robust cash flow generation.

Income Statement

Lenovo Group shows a solid revenue growth rate of 3.59% in the TTM, indicating a positive trajectory. The gross profit margin is stable at 15.31%, though slightly lower than the previous year. The net profit margin of 2.17% reflects moderate profitability, with EBIT and EBITDA margins at 3.30% and 4.84% respectively, suggesting efficient operations. However, the decline in gross profit margin compared to previous periods indicates potential cost pressures.

Balance Sheet

The debt-to-equity ratio of 0.77 in the TTM shows a manageable level of leverage, improved from previous periods. Return on equity is strong at 27.08%, reflecting effective use of equity to generate profits. The equity ratio stands at 13.73%, indicating a balanced capital structure. However, the relatively low equity ratio suggests potential vulnerability to financial fluctuations.

Cash Flow

Lenovo Group's free cash flow growth rate of 52.31% in the TTM is impressive, indicating strong cash generation capabilities. The operating cash flow to net income ratio is slightly negative, which may require attention. The free cash flow to net income ratio of 1.56 suggests robust cash flow relative to net income, highlighting strong liquidity and financial flexibility.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	75.04B	69.08B	56.86B	61.95B	71.62B	60.74B
Gross Profit	11.51B	11.10B	9.80B	10.50B	12.05B	9.77B
EBITDA	3.38B	3.67B	3.54B	3.80B	4.29B	3.10B
Net Income	1.63B	1.38B	1.01B	1.61B	2.03B	1.21B
Balance Sheet
Total Assets	49.83B	44.23B	38.75B	38.92B	44.51B	37.99B
Cash, Cash Equivalents and Short-Term Investments	5.21B	4.76B	3.57B	4.32B	3.96B	3.13B
Total Debt	4.84B	5.73B	3.96B	4.36B	5.93B	4.42B
Total Liabilities	42.34B	37.57B	32.67B	32.87B	39.12B	34.38B
Stockholders Equity	6.84B	6.07B	5.58B	5.59B	4.99B	3.56B
Cash Flow
Free Cash Flow	1.32B	-51.33M	725.09M	1.22B	2.79B	2.81B
Operating Cash Flow	2.14B	1.10B	2.01B	2.80B	4.08B	3.65B
Investing Cash Flow	-1.35B	-1.06B	-1.28B	-1.92B	-1.50B	-975.90M
Financing Cash Flow	191.25M	1.19B	-1.34B	-413.78M	-1.76B	-3.23B

Lenovo Group Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 24.92
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LNVGY, the sentiment is Negative. The current price of 24.92 is above the 20-day moving average (MA) of 23.09, above the 50-day MA of 23.99, and below the 200-day MA of 25.52, indicating a bearish trend. The MACD of -0.43 indicates Negative momentum. The RSI at 42.33 is Neutral, neither overbought nor oversold. The STOCH value of 82.33 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LNVGY.

Lenovo Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WDC	78 Outperform	$85.55B	25.12	41.27%	0.18%	-16.35%	316.56%
LNVGY	74 Outperform	$14.10B	8.57	26.43%	4.03%	19.41%	36.65%
NTAP	70 Outperform	$19.08B	16.77	125.35%	1.89%	2.64%	4.12%
DELL	65 Neutral	$75.84B	15.26	―	1.45%	10.81%	31.67%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
HPQ	61 Neutral	$17.85B	7.33	―	5.09%	4.09%	-5.77%
SMCI	59 Neutral	$17.38B	23.33	12.79%	―	12.22%	-48.34%