Lowe's (LOW) AI Stock Analysis

• Market Cap: $151.13B
• Dividend Yield: 1.94%
• Average Volume (3M): 2.38M
• Price to Earnings (P/E): 22.3
• Beta (1Y): 0.75
• Revenue Growth: 0.64%
• EPS Growth: 0.58%
• Country: US
• Employees: 161,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Home Improvement
• EPS (TTM): 3.06
• Shares Outstanding: 560,951,500
• 10 Day Avg. Volume: 2,607,015
• 30 Day Avg. Volume: 2,379,378
• PEG Ratio: -2.83
• Price to Book (P/B): -10.36
• Price to Sales (P/S): 1.76
• P/FCF Ratio: 19.15
• Enterprise Value/Market Cap: 1.28
• Enterprise Value/Revenue: 2.30
• Enterprise Value/Gross Profit: 7.32
• Enterprise Value/Ebitda: 15.53
• 1Y Price Target: $283.82
• Price Target Upside: 6.44% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 22
• EPS Forecast (FY): 12.25
• Revenue Forecast (FY): $86.04B

• Rating: 69 Neutral
• Price Target: $295.00 ▲(10.64% Upside)

Lowe's overall stock score is driven by strong earnings call performance and strategic initiatives, including the acquisition of Foundation Building Materials. However, financial performance is hindered by high leverage and declining revenue growth. Technical analysis suggests positive momentum, but potential overbought conditions. Valuation is fair, with a reasonable P/E ratio and moderate dividend yield.

Positive Factors

Margin Sustainability

Consistently strong gross (~32%) and net (~8%) margins indicate durable pricing power, favorable product mix, and operational efficiency. These margins provide structural ability to fund investments in services, digital capabilities, and pro support, cushioning cyclical revenue swings.

E-commerce & AI Adoption

Double-digit online growth and deployment of AI tools signal a lasting channel shift and productivity lift. Strong digital conversion reduces reliance on store traffic, enhances customer lifetime value, and supports scalable, cost-efficient fulfillment and pro servicing over the medium term.

Pro/Total Home Strategy & FBM

The Total Home focus and FBM acquisition expand commercial product breadth and pro channels, diversifying revenue and increasing cross-sell opportunities. Successfully integrating FBM can raise recurring commercial sales and deepen contractor relationships, supporting more stable growth.

Negative Factors

High Leverage / Negative Equity

Negative shareholders' equity and elevated leverage materially weaken financial flexibility. Higher debt burdens raise refinancing and interest-rate sensitivity, constrain capital allocation for capex/dividends, and increase downside risk until meaningful deleveraging occurs.

Declining Free Cash Flow Growth

A falling free cash flow growth trend reduces internal funding for strategic initiatives, dividends, or debt reduction. Even with decent FCF conversion today, persistent negative FCF growth limits the company’s ability to self-finance acquisitions or withstand prolonged softness in consumer spending.

Inconsistent Revenue Growth

Inconsistent and slightly declining revenue weakens predictability and may signal market saturation or demand pressure for discretionary projects. Coupled with macro affordability headwinds, this forces reliance on pro, services, or M&A to sustain top-line expansion over the medium term.

Lowe's Business Overview & Revenue Model

Company Description

Lowe's Companies, Inc., together with its subsidiaries, operates as a home improvement retailer in the United States and internationally. The company offers a line of products for construction, maintenance, repair, remodeling, and decorating. It provides home improvement products, such as appliances, seasonal and outdoor living, lawn and garden, lumber, kitchens and bath, tools, paint, millwork, hardware, flooring, rough plumbing, building materials, decor, lighting, and electrical. It also offers installation services through independent contractors in various product categories; extended protection plans; and in-warranty and out-of-warranty repair services. The company sells its national brand-name merchandise and private brand products to homeowners, renters, and professional customers. As of January 28, 2022, it operated 1,971 home improvement and hardware stores. The company also sells its products through websites comprising Lowes.com and Lowesforpros.com; and through mobile applications. Lowe's Companies, Inc. was founded in 1921 and is based in Mooresville, North Carolina.

How the Company Makes Money

Lowe's generates revenue primarily through the sale of home improvement products and services. The company's revenue model is based on retail sales from its brick-and-mortar stores as well as its e-commerce platform. Key revenue streams include sales of building materials, appliances, tools, and seasonal items like garden products. Additionally, Lowe's offers installation services for various products, which also contributes to its earnings. The company benefits from strategic partnerships with suppliers and manufacturers, ensuring a diverse product offering. Loyalty programs and credit services further enhance customer retention and drive sales, contributing to Lowe's overall profitability.

Lowe's Financial Statement Overview

Summary

Lowe's financial performance is characterized by strong profitability but is offset by high leverage and declining revenue growth. The income statement reflects efficient operations, while the balance sheet indicates potential financial risk due to negative equity. Cash flow management is adequate, though declining free cash flow growth poses a challenge. Overall, the company needs to address leverage and improve growth to enhance financial stability.

Income Statement

Lowe's demonstrates strong profitability with a consistent gross profit margin around 32% and a net profit margin of approximately 8%. However, revenue growth has been inconsistent, with a slight decline in the most recent TTM period. The EBIT and EBITDA margins indicate efficient operations, though they have slightly decreased over time.

Balance Sheet

The balance sheet shows a high level of leverage with a negative stockholders' equity, resulting in a negative debt-to-equity ratio. This indicates potential financial risk. Return on equity is also negative, reflecting challenges in generating returns for shareholders. The equity ratio is concerning, suggesting a reliance on debt financing.

Cash Flow

Cash flow analysis reveals a decline in free cash flow growth, though the company maintains a healthy free cash flow to net income ratio. Operating cash flow coverage is moderate, indicating some ability to cover net income with operating cash flow. However, the negative growth in free cash flow is a concern.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	84.25B	83.67B	86.38B	97.06B	96.25B	89.60B
Gross Profit	26.48B	26.15B	27.13B	30.49B	30.39B	28.17B
EBITDA	12.48B	12.59B	13.57B	12.69B	14.47B	10.68B
Net Income	6.78B	6.96B	7.73B	6.44B	8.44B	5.83B
Balance Sheet
Total Assets	53.45B	44.57B	43.36B	45.27B	46.33B	48.29B
Cash, Cash Equivalents and Short-Term Investments	1.03B	2.13B	1.23B	1.73B	1.40B	5.20B
Total Debt	44.70B	39.68B	40.15B	37.99B	29.38B	26.21B
Total Liabilities	63.84B	58.80B	58.41B	59.53B	51.15B	46.85B
Stockholders Equity	-10.38B	-14.23B	-15.05B	-14.25B	-4.82B	1.44B
Cash Flow
Free Cash Flow	7.05B	7.70B	6.18B	6.76B	8.26B	9.26B
Operating Cash Flow	9.21B	9.63B	8.14B	8.59B	10.11B	11.05B
Investing Cash Flow	-12.11B	-1.74B	-1.90B	-1.31B	-1.65B	-1.89B
Financing Cash Flow	247.00M	-7.05B	-6.67B	-7.05B	-12.02B	-5.19B

Lowe's Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 266.64
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LOW, the sentiment is Positive. The current price of 266.64 is above the 20-day moving average (MA) of 264.72, above the 50-day MA of 249.98, and above the 200-day MA of 237.71, indicating a bullish trend. The MACD of 7.08 indicates Positive momentum. The RSI at 54.76 is Neutral, neither overbought nor oversold. The STOCH value of 23.68 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LOW.

Lowe's Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WSM	75 Outperform	$24.56B	22.62	56.92%	1.37%	5.10%	7.59%
TSCO	71 Outperform	$29.14B	26.77	45.18%	1.80%	4.26%	0.73%
LOW	69 Neutral	$151.13B	22.34	―	1.94%	0.64%	0.58%
HD	66 Neutral	$373.62B	25.59	162.91%	2.67%	7.50%	-0.38%
FND	63 Neutral	$7.47B	34.13	9.69%	―	6.04%	10.26%
BBY	62 Neutral	$13.74B	21.64	22.49%	5.46%	-0.95%	-48.28%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%