Lenovo Group (LNVGY) AI Stock Analysis

• Market Cap: $15.98B
• Dividend Yield: 3.76%
• Average Volume (3M): 2.01K
• Price to Earnings (P/E): 9.7
• Beta (1Y): 0.57
• 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: 6,018
• 30 Day Avg. Volume: 2,006
• 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: 1.40
• Enterprise Value/Revenue: 0.31
• Enterprise Value/Gross Profit: 2.00
• Enterprise Value/Ebitda: 6.60
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 2.51
• Revenue Forecast (FY): $78.56B

• Rating: 70 Outperform
• Price Target: $27.00 ▲(8.35% Upside)

Lenovo's overall stock score is driven by strong financial performance and positive earnings call highlights, particularly in AI growth. However, technical analysis indicates bearish momentum, which tempers the overall score. The stock's attractive valuation further supports its potential, despite concerns about rising component costs.

Positive Factors

AI Revenue Growth

The significant increase in AI-related revenues indicates Lenovo's successful strategic focus on AI, positioning it well for future growth in this expanding market.

Strategic Partnerships

The partnership with Jayud Global enhances Lenovo's logistics capabilities, supporting efficient global operations and potentially improving supply chain resilience.

Strong Cash Generation

Robust free cash flow generation indicates strong operational performance and financial health, providing Lenovo with the flexibility to invest in growth opportunities.

Negative Factors

Rising Component Costs

Increasing component costs could pressure margins, potentially affecting profitability and requiring strategic cost management to maintain financial performance.

Operational Efficiency Challenges

Decreasing margins suggest challenges in operational efficiency, which could impact profitability if not addressed through cost control or revenue growth strategies.

Debt Reliance

While the debt level is manageable, reliance on debt financing could limit financial flexibility and increase risk if interest rates rise or cash flows decline.

Lenovo Group Business Overview & Revenue Model

Company Description

Lenovo Group Limited is a multinational technology company headquartered in Beijing, China, and Morrisville, North Carolina, USA. It operates primarily in the personal computer (PC), mobile device, and data center sectors. Lenovo is best known for its ThinkPad laptops, IdeaPad series, and a wide range of desktop computers, tablets, smartphones, and server solutions. The company also focuses on artificial intelligence, cloud computing, and smart devices, striving to provide innovative technology solutions across various consumer and enterprise markets.

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 stable financial performance with consistent revenue growth and strong return on equity. However, there is room for improvement in operational efficiency and cash conversion, despite significant growth in free cash flow.

Income Statement

Lenovo Group's income statement shows a solid performance with a consistent revenue growth rate of 4.86% in the TTM. The gross profit margin is stable at 15.81%, and the net profit margin is 2.00%, indicating moderate profitability. However, the EBIT and EBITDA margins have slightly decreased compared to previous years, suggesting some pressure on operational efficiency.

Balance Sheet

The balance sheet reflects a moderate financial position with a debt-to-equity ratio of 1.04, indicating a balanced approach to leveraging. The return on equity is strong at 25.66%, showcasing effective use of equity to generate profits. However, the equity ratio is relatively low, suggesting a higher reliance on debt financing.

Cash Flow

Cash flow analysis reveals a significant improvement in free cash flow growth at 99.85% in the TTM, indicating strong cash generation capabilities. The operating cash flow to net income ratio is low at 0.04, suggesting potential challenges in converting income into cash. The free cash flow to net income ratio is healthy at 42.63%, reflecting good cash management.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	72.44B	69.08B	56.86B	61.95B	71.62B	60.74B
Gross Profit	11.16B	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	1.65B	1.38B	1.01B	1.61B	2.03B	1.21B
Balance Sheet
Total Assets	46.32B	44.23B	38.75B	38.92B	44.51B	37.99B
Cash, Cash Equivalents and Short-Term Investments	4.59B	4.76B	3.57B	4.32B	3.96B	3.13B
Total Debt	4.82B	5.73B	3.96B	4.36B	5.93B	4.42B
Total Liabilities	38.77B	37.57B	32.67B	32.87B	39.12B	34.38B
Stockholders Equity	6.81B	6.07B	5.58B	5.59B	4.99B	3.56B
Cash Flow
Free Cash Flow	866.03M	-51.33M	725.09M	1.22B	2.79B	2.81B
Operating Cash Flow	1.55B	1.10B	2.01B	2.80B	4.08B	3.65B
Investing Cash Flow	-1.17B	-1.06B	-1.28B	-1.92B	-1.50B	-975.90M
Financing Cash Flow	136.84M	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 below the 20-day moving average (MA) of 26.03, below the 50-day MA of 28.23, and below the 200-day MA of 26.41, indicating a bearish trend. The MACD of -0.89 indicates Negative momentum. The RSI at 41.66 is Neutral, neither overbought nor oversold. The STOCH value of 83.45 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	79 Outperform	$57.74B	24.62	31.48%	0.19%	-16.35%	316.56%
NTAP	76 Outperform	$23.23B	20.41	125.35%	1.77%	2.64%	4.12%
LNVGY	70 Outperform	$15.98B	9.71	26.43%	3.76%	19.41%	36.65%
DELL	62 Neutral	$93.10B	18.52	―	1.45%	10.77%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
HPQ	61 Neutral	$24.22B	9.78	―	4.47%	3.94%	-5.77%
SMCI	58 Neutral	$20.71B	27.80	12.79%	―	12.22%	-48.34%

Lenovo Group Corporate Events

Lenovo Group Reports Record Revenue and Profit Growth

Lenovo Group Limited, a leading global technology company, specializes in designing, manufacturing, and marketing a wide range of products including PCs, tablets, smartphones, and infrastructure solutions, with a strong focus on AI-driven innovations.

Lenovo’s Earnings Call Highlights Record Growth and Strategic Focus

Lenovo’s recent earnings call painted a picture of robust financial health, marked by record-breaking revenue and significant market share growth, particularly in the PC and Infrastructure Solutions Group (ISG) segments. Despite facing challenges such as tariff volatility and ISG profitability issues, the company expressed confidence in its strategic investments and technological advancements.