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The Middleby Corp (MIDD)
NASDAQ:MIDD
Top Page
The Middleby
(NASDAQ:MIDD)
73Outperform
Positive Factors
Innovative Products
MIDD's new innovative products provide rapid paybacks through waste minimization and labor savings.
Management and Leadership
Activist Garden Investments took a stake in MIDD, indicating potential positive changes and growth.
Strategic Changes
The spinoff of its Food Processing business is expected to benefit MIDD's Commercial Foodservice business from renewed management focus and execution.
Negative Factors
Consumer Behavior
Promotional meal deals have consumers trading down to smaller serving sizes, acting as a headwind to volumes for MIDD.
Market Conditions
Residential segment struggles have been attributed to Brexit in the U.K in 2019 and 2020, along with rising interest rates, inflationary pressures, and overall market conditions from 2022 through 2024.
Restaurant Traffic
Restaurant traffic remains sluggish despite renewed value focus, which could negatively impact MIDD if traffic weakness persists.
The Middleby (MIDD) vs. S&P 500 (SPY)
Market Cap
$7.70B
Dividend YieldN/A
Average Volume (3M)875.41K
Price to Earnings (P/E)16.6
Beta (1Y)1.19
Revenue Growth-4.00%
EPS Growth6.53%
CountryUS
Employees10,616
SectorIndustrials
Sector Strength61
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)7.91
Shares Outstanding53,646,156
10 Day Avg. Volume1,154,947
30 Day Avg. Volume875,410
Financial Highlights & Ratios
PEG Ratio2.55
Price to Book (P/B)N/A
Price to Sales (P/S)2.14
Price to Cash Flow (P/CF)13.20
P/FCF Ratio12.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$182.40Price Target Upside38.61% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
The Middleby Business Overview & Revenue Model
Company DescriptionThe Middleby Corporation (MIDD) is a leading global manufacturer of commercial kitchen equipment, industrial processing solutions, and residential appliances. The company operates through three main segments: Commercial Foodservice Equipment, Food Processing Equipment, and Residential Kitchen Equipment. Middleby is renowned for its innovative cooking, warming, refrigeration, and beverage products, serving a diverse clientele ranging from fast-food chains and restaurants to food processors and residential customers.
How the Company Makes MoneyThe Middleby Corporation generates revenue through the sale of its diverse range of products across its three business segments. In the Commercial Foodservice Equipment segment, Middleby earns income by providing advanced kitchen equipment solutions to restaurants, hotels, and institutional foodservice operators. The Food Processing Equipment segment contributes to revenue by supplying processing solutions to food manufacturers, enhancing efficiency and productivity in food production. The Residential Kitchen Equipment segment focuses on high-end kitchen appliances for the home market, targeting consumers seeking premium cooking and refrigeration products. Middleby's earnings are further bolstered through strategic acquisitions that expand its product offerings and market reach, as well as through ongoing innovation and customer-centric solutions.
The Middleby Financial Statement Overview
Summary
The Middleby showcases robust financial health across its statements. Strong profitability and cash flow generation underpin its operations, although improvements in revenue growth and financial stability could enhance its position. The company is well-positioned for future opportunities with a solid foundation.Income Statement
The Middleby shows strong profitability with consistent gross and net profit margins. The EBIT margin indicates operational efficiency, though revenue growth has been fluctuating with a recent decline. Overall, the company maintains a solid income statement performance with room for growth in revenue.75
Positive
Balance Sheet
The company's balance sheet displays a stable equity base with a moderate debt-to-equity ratio, suggesting manageable leverage. However, the equity ratio indicates room for improved financial stability. Return on equity remains healthy, reflecting effective use of shareholders' funds.70
Positive
Cash Flow
The Middleby demonstrates strong cash flow generation with impressive free cash flow growth and high operating cash flow to net income ratio. This indicates efficient cash conversion and solid financial health. However, fluctuations in free cash flow growth rates warrant monitoring.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 3.88B | 4.04B | 4.03B | 3.25B | 2.51B | Gross Profit |
| 1.47B | 1.53B | 1.45B | 1.19B | 882.05M | EBIT |
| 656.19M | 634.87M | 639.60M | 448.31M | 324.43M | EBITDA |
| 796.72M | 797.35M | 780.39M | 776.67M | 457.21M | Net Income Common Stockholders |
| 428.43M | 400.88M | 436.57M | 488.49M | 207.29M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 689.53M | 247.50M | 162.00M | 180.36M | 268.10M | Total Assets |
| 7.28B | 6.91B | 6.87B | 6.38B | 5.20B | Total Debt |
| 2.40B | 2.54B | 2.72B | 2.41B | 1.73B | Net Debt |
| 1.71B | 2.29B | 2.56B | 2.23B | 1.46B | Total Liabilities |
| 3.64B | 3.66B | 4.08B | 3.89B | 3.23B | Stockholders Equity |
| 3.64B | 3.25B | 2.80B | 2.49B | 1.98B |
| Cash Flow | Free Cash Flow | |||
| 637.51M | 541.81M | 263.03M | 371.85M | 482.88M | Operating Cash Flow |
| 686.82M | 628.79M | 332.55M | 423.40M | 524.78M | Investing Cash Flow |
| -158.53M | -155.74M | -348.32M | -1.01B | -106.76M | Financing Cash Flow |
| -73.77M | -390.94M | 7.63M | 502.79M | -252.47M |
The Middleby Technical Analysis
Negative
131.59
Price Trends
158.06
Negative
149.77
Negative
142.21
Negative
Market Momentum
-1.69
Positive
42.44
Neutral
30.91
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MIDD, the sentiment is Negative. The current price of 131.59 is below the 20-day moving average (MA) of 148.51, below the 50-day MA of 158.06, and below the 200-day MA of 142.21, indicating a bearish trend. The MACD of -1.69 indicates Positive momentum. The RSI at 42.44 is Neutral, neither overbought nor oversold. The STOCH value of 30.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MIDD.
The Middleby Risk Analysis
The Middleby disclosed 34 risk factors in its most recent earnings report. The Middleby reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
The Middleby Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $6.52B | 22.46 | 18.08% | 0.88% | 9.53% | 10.98% | |
73 Outperform | $7.70B | 16.65 | 12.44% | ― | -4.00% | 6.53% | |
73 Outperform | $6.83B | 20.09 | 13.46% | ― | 6.79% | 64.30% | |
71 Outperform | $6.33B | 30.27 | 15.65% | ― | 13.94% | 37.49% | |
67 Neutral | $8.50B | 29.24 | 18.96% | 0.57% | 9.65% | ― | |
62 Neutral | $7.68B | 13.06 | 3.21% | 3.34% | 3.62% | -14.40% | |
56 Neutral | $7.11B | 36.44 | 3.11% | 1.30% | -3.47% | ― |
* Industrials Sector Average
Performance Comparison
MIDD
The Middleby
132.19
-13.23
-9.10%
GNRC
Generac Holdings
110.25
-21.51
-16.33%
RRX
Regal Rexnord
99.29
-62.19
-38.51%
SPXC
SPX
132.06
11.30
9.36%
WTS
Watts Water Technologies
193.71
-5.33
-2.68%
CR
Crane Company
140.54
6.40
4.77%
The Middleby Earnings Call Summary
Earnings Call Date: Feb 25, 2025 | % Change Since: -21.74% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant strategic moves, including the separation of the Food Processing business to enhance value and growth. Despite strong cash flow and innovative product developments, revenue declines in key segments and macroeconomic challenges were noted. The sentiment is balanced with optimism for future growth through strategic initiatives.Highlights
Record Free Cash Flow
The company achieved a record free cash flow of over $640 million for the year, with $229 million in the fourth quarter alone, demonstrating strong cash generation capabilities.
Food Processing Segment Performance
The Food Processing segment reported 4.7% organic revenue growth in Q4, with revenues over $219 million and an adjusted EBITDA margin of 29.6%, up 200 basis points from the prior year.
Board Expansion and Refreshment
The addition of two new Board members, Julie Bauman and Ed Garden, brings relevant operating and director experience, enhancing strategic guidance for the company.
Separation of Food Processing Business
The decision to separate the Middleby Food Processing business into a stand-alone company aims to unlock further value and growth opportunities for both the Food Processing and Kitchen Equipment businesses.
Strong Q4 Margins
The company closed 2024 with its strongest margins of the year across all three business segments, despite challenging macro conditions in commercial and residential sectors.
Innovative Product Launches
New innovations in ice and beverage categories and advancements in automation, ventless kitchens, electrification, and IoT connectivity are driving growth opportunities.
Lowlights
Revenue Decline
Total revenues in 2024 declined modestly to around $3.9 billion, with specific declines in the Residential segment by 2.4% and Commercial segment organic revenues down 2.8% year-over-year in Q4.
Challenging Macro Conditions
Macro conditions remained challenging for the commercial and residential businesses, impacting overall performance and growth.
Food Processing Segment Margin Pressure
While the Food Processing segment had strong performance, its margins are expected to fall below last year's levels due to the integration of recent acquisitions.
Residential Business Challenges
The Residential business faced a 2.4% decline in Q4 revenue year-over-year, with an adjusted EBITDA margin of 13%, although it marked the highest level in 1.5 years.
Company Guidance
During the Fourth Quarter 2024 Earnings Call, Middleby Corporation provided extensive guidance for their strategic plans and financial metrics. CEO Tim FitzGerald announced the decision to separate the Middleby Food Processing business into a stand-alone public company, aiming to unlock greater value and growth opportunities for both the food processing and kitchen equipment segments. The company reported that revenues for 2024 were approximately $3.9 billion, with adjusted EBITDA at $866 million, representing a 22.4% margin. The Food Processing segment achieved an impressive adjusted EBITDA margin of 25.6%. The company also declared GAAP earnings per share of $7.90 and adjusted EPS of $9.49. For Q4, Middleby reported revenues exceeding $1 billion and a record adjusted EBITDA margin of 24.8%. Free cash flow for the fourth quarter was $229 million, contributing to a record total of $640 million for the year. Middleby expects organic revenue growth in the low single digits for 2025, with profitability growth outpacing revenue growth, while maintaining a focus on strategic M&A activities and shareholder value enhancement through stock repurchases.The Middleby Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
The Middleby Announces Board Changes and Spin-Off Plans
Positive
Feb 25, 2025
On February 24, 2025, The Middleby Corporation entered into a Cooperation Agreement with Garden Investment Management, leading to the appointment of Ed Garden to its Board of Directors. This agreement includes standstill restrictions and mutual non-disparagement provisions, and it will terminate before the 2026 Annual Meeting. On February 25, 2025, Middleby announced the appointments of Julie Bowerman and Ed Garden to its Board and the retirement of John Miller. The company also revealed plans to spin off its food processing business into a standalone public company, aiming to optimize its portfolio and enhance shareholder value. These strategic moves reflect Middleby’s commitment to governance and shareholder engagement.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.