MMarketMath

LOW

Slow growerQuality: Low (38/100)1 red flag

Lowe's · Consumer Discretionary · Home Improvement Retail

$216.98

52w 199.40 – 293.06

20y monthly, adjusted

Mkt cap

$121.7B

P/E

18.3

P/FCF

15.9

FCF yield

6.3%

ROE

-67.1%

Shldr yield

2.3%

div 2.2% + bb 0.2%

What today's price assumes

At $121.7B, the market is pricing in 4.6% annual free-cash-flow growth for the next decade (10% discount rate, 2.5% terminal growth). Over the last ten years, FCF actually grew 7.9% per year — expectations look undemanding relative to history.

Simple DCF per-share range: $208 · $276 · $344 (4% / base / optimistic growth). An estimate, not a target.

Adjust the assumptions yourself →

Historical multiple lens

At its own median P/OCF of 11.4× across 18 years, LOW would trade near $200/share (25th–75th percentile: $164–$247); it trades at 12.3× today.

Assumes the historical multiple regime persists — re-ratings can be permanent.

Growth record

Compound annual growth rates from as-filed 10-K data, split-adjusted

Rev 3y

−3.8%

Rev 5y

−0.8%

Rev 10y

+3.9%

EPS 5y

+8.9%

EPS 10y

+15.8%

FCF 5y

−3.7%

FCF 10y

+7.9%

Fundamentals

Fiscal 2008–2026, from SEC filings

Revenue

2008: $48.3B
2009: $48.2B
2010: $47.2B
2011: $48.8B
2012: $50.2B
2013: $50.5B
2014: $53.4B
2015: $56.2B
2016: $59.1B
2017: $65.0B
2018: $68.6B
2019: $71.3B
2020: $72.1B
2021: $89.6B
2022: $96.3B
2023: $97.1B
2024: $86.4B
2025: $83.7B
2026: $86.3B
$0$25.0B$50.0B$75.0B
08
12
16
20
24

Net income

2008: $2.8B
2009: $2.2B
2010: $1.8B
2011: $2.0B
2012: $1.8B
2013: $2.0B
2014: $2.3B
2015: $2.7B
2016: $2.5B
2017: $3.1B
2018: $3.4B
2019: $2.3B
2020: $4.3B
2021: $5.8B
2022: $8.4B
2023: $6.4B
2024: $7.7B
2025: $7.0B
2026: $6.7B
$0$2.5B$5.0B$7.5B
08
12
16
20
24

Free cash flow

2008: $337.0M
2009: $856.0M
2010: $2.3B
2011: $2.5B
2012: $2.5B
2013: $2.6B
2014: $3.2B
2015: $4.0B
2016: $3.6B
2017: $4.5B
2018: $3.9B
2019: $5.0B
2020: $2.8B
2021: $9.3B
2022: $8.3B
2023: $6.8B
2024: $6.2B
2025: $7.7B
2026: $7.7B
$0$2.5B$5.0B$7.5B
08
12
16
20
24

Diluted shares (lower is better)

2009: 1.5B
2010: 1.5B
2011: 1.4B
2012: 1.3B
2013: 1.2B
2014: 1.1B
2015: 990.0M
2016: 929.0M
2017: 881.0M
2018: 840.0M
2019: 812.0M
2020: 778.0M
2021: 750.0M
2022: 699.0M
2023: 631.0M
2024: 584.0M
2025: 568.0M
2026: 560.0M
0500.0M1.0B
08
12
16
20
24

Margins

0%10%20%30%08111417202326
Net marginFCF marginGross margin

Capital returned (dividends + buybacks)

2008: $2.7B
2009: $499.0M
2010: $895.0M
2011: $3.2B
2012: $3.6B
2013: $5.1B
2014: $4.4B
2015: $4.7B
2016: $4.9B
2017: $4.7B
2018: $4.5B
2019: $4.5B
2020: $5.9B
2021: $6.7B
2022: $15.0B
2023: $16.5B
2024: $8.7B
2025: $6.6B
2026: $2.8B
$0$5.0B$10.0B$15.0B
08
12
16
20
24

Cash vs long-term debt

$0$20.0B$40.0B08111417202326
CashLT debt

Quarterly

Discrete quarters from 10-Q filings; Q4 derived as fiscal year minus Q1–Q3. OCF is unwound from the year-to-date figures 10-Qs report. Compare to the same quarter a year ago — most businesses are seasonal.

Revenue by quarter

Q1'24: $22.3B
Q2'24: $25.0B
Q3'24: $20.5B
Q4'24: $18.6B
Q1'25: $21.4B
Q2'25: $23.6B
Q3'25: $20.2B
Q4'25: $18.6B
Q1'26: $20.9B
Q2'26: $24.0B
Q3'26: $20.8B
Q4'26: $20.6B
Q1'27: $23.1B
$0$10.0B$20.0B
24
24
25
26
27

Net income by quarter

Q1'24: $2.3B
Q2'24: $2.7B
Q3'24: $1.8B
Q4'24: $1.0B
Q1'25: $1.8B
Q2'25: $2.4B
Q3'25: $1.7B
Q4'25: $1.1B
Q1'26: $1.6B
Q2'26: $2.4B
Q3'26: $1.6B
Q4'26: $999.0M
Q1'27: $1.6B
$0$1.0B$2.0B
24
24
25
26
27
QuarterRevenueYoYNet incomeYoYEPSOCF
Q1'27$23.1B+10.3%$1.6B−0.8%2.90$3.4B
Q4'26 *$20.6B+10.9%$999.0M−11.1%1.78$1.6B
Q3'26$20.8B+3.2%$1.6B−4.7%2.88$687.0M
Q2'26$24.0B+1.6%$2.4B+0.6%4.27$4.2B
Q1'26$20.9B−2.0%$1.6B−6.5%2.92$3.4B
Q4'25 *$18.6B−0.3%$1.1B+10.2%2.01$911.0M
Q3'25$20.2B−1.5%$1.7B−4.4%2.99$1.3B
Q2'25$23.6B−5.5%$2.4B−10.8%4.17$3.2B
Q1'25$21.4B−4.4%$1.8B−22.3%3.06$4.3B
Q4'24 *$18.6B−17.1%$1.0B+6.5%1.81$1.1B
Q3'24$20.5B−12.8%$1.8B+1051.3%3.06$1.1B
Q2'24$25.0B−9.2%$2.7B−10.7%4.56$3.9B
Q1'24$22.3B−5.5%$2.3B−3.1%3.77$2.1B

Track record

Compound annual growth by period. For debt and share count, negative is the good direction.

Series3y5y10y15y
Revenue−3.8%−0.8%+3.9%+3.9%
Operating cash flow+4.7%−2.2%+7.5%+6.5%
Free cash flow+4.2%−3.7%+7.9%+7.7%
EPS (diluted)+5.2%+8.9%+15.8%+15.2%
Equity−37.5%−28.4%−22.4%—
LT debt+6.2%+14.0%+13.2%+12.8%
Diluted shares−3.9%−5.7%−4.9%−5.9%
Stock price−0.0%+3.2%+13.1%+19.4%

$100, 3 years ago

$100vs $176 in SPY

-0.0% vs 20.7%/yr

$100, 5 years ago

$117vs $181 in SPY

3.2% vs 12.6%/yr

$100, 10 years ago

$342vs $412 in SPY

13.1% vs 15.2%/yr

$100, 15 years ago

$1,433vs $813 in SPY

19.4% vs 15.0%/yr

The $1 test — market value created per $1 of earnings retained (Buffett's hurdle: at least $1)

Last 5 years

$1.60

$38.6B created / $24.1B retained

Last 10 years

$2.64

$95.0B created / $35.9B retained

Quality & capital discipline

Cash-based returns and how management deploys capital

Cash ROIC

33.0%

OCF ÷ (equity + debt)

OCF / EV yield

6.1%

MC vs 10× OCF

1.24

≤1 = priced under 10× OCF

Debt / FCF

5.2y

SBC / FCF

3.2%

Owner earnings

$7.4B

OCF − capex − SBC

OE yield

6.1%

Share count 5y

−5.5%

per year; negative = buybacks

Capital intensity

—

net PP&E ÷ revenue

Sales efficiency

$-0.08

new PP&E per $1 new revenue, 5y

Growth engine (5y): reinvested 24.8% of operating cash flow at an incremental return of -10.3% — an organically fundable growth rate of about -2.6% per year (growth ≈ reinvestment rate × incremental ROIC).

Checklist

18 of 26 checks pass · 69%. Checks with structurally missing inputs are excluded.

Growth & Consistency

4/7

  • Revenue growth

    -0.8% · 5y CAGR ≥ 5%

    fail

  • EPS growth

    8.9% · 5y CAGR ≥ 5%

    pass

  • FCF growth

    -3.7% · 5y CAGR ≥ 5%

    fail

  • Revenue rises consistently

    7 of 9 · up in ≥ 7 of last 10 years

    pass

  • FCF consistently positive

    10 of 10 · positive in ≥ 8 of last 10 years

    pass

  • Profitable every year

    10 of 10 · net income > 0 in ≥ 8 of last 10

    pass

  • Cash flow keeps up with sales

    -2.2% vs -0.8% · OCF CAGR ≥ 0.9× revenue CAGR

    fail

Profitability

5/7

  • Net margin

    7.7% · ≥ 8%

    fail

  • Operating margin

    11.8% · ≥ 10%

    pass

  • Gross margin stable or rising

    33.5% vs 33.2% · no drop > 2 pts over 3y

    pass

  • Return on equity

    -67.1% · ≥ 12%

    fail

  • Cash ROIC

    33.0% · ≥ 12%

    pass

  • FCF margin

    8.9% · ≥ 5%

    pass

  • Earnings back their cash

    OCF $9.9B vs NI $6.7B · OCF ≥ net income (latest FY)

    pass

Balance Sheet

1/4

  • Debt payable from cash flow

    5.2y · LT debt ≤ 3× FCF

    fail

  • Cash cushion

    2% · cash ≥ 50% of LT debt

    fail

  • Leverage

    -4.02 · LT debt ≤ 1.5× equity

    pass

  • Equity positive and compounding

    −$9.9B · equity > 0 and grew over ~5y

    fail

  • Interest burden

    — · interest ≤ 15% of operating income

    na

Capital Allocation

4/4

  • Share count flat or shrinking

    -5.5% · ≤ +0.5%/yr over ~5y

    pass

  • Stock comp restrained

    3% · SBC ≤ 15% of FCF

    pass

  • Distributions funded by FCF

    37% · dividends + buybacks ≤ 100% of FCF

    pass

  • Repurchases are a habit

    10 of 10 · buybacks in ≥ 5 of last 10 years

    pass

Valuation Discipline

4/4

  • FCF yield

    6.3% · ≥ 3%

    pass

  • Earnings multiple

    18.3 · P/E ≤ 25

    pass

  • Price asks less than history delivered

    4.6% vs 7.9% · implied FCF growth ≤ historical FCF CAGR

    pass

  • Shareholder yield

    2.3% · dividends + buybacks ≥ 2% of market cap

    pass

Red flags

Mechanical checks — a flag is a question to investigate, not a verdict

Heavy debt load

Long-term debt exceeds 5 years of free cash flow.

Financial data

As filed in 10-Ks; per-share figures split-adjusted. $ in millions.

FYRevenueGross profitOp incomeNet incomeEPSOCFCapExFCFDividendsBuybacksSBCCashLT debtEquityShares
202686,28628,88510,1536,65411.859,8642,2137,6512,63621124798239,819-9,917560
202583,67427,87710,4666,95712.239,6251,9277,6982,5664,0532211,76135,319-14,231568
202486,37728,84411,5577,72613.208,1401,9646,1762,5316,13821092135,770-15,050584
202397,05932,25710,1596,43710.178,5891,8296,7602,37014,1242231,34833,270-14,254631
202296,25032,05612,0938,44212.0410,1131,8538,2601,98413,0122301,13324,285-4,816699
202189,59729,5729,6475,8357.7511,0491,7919,2581,7044,9711554,69020,6681,437750
202072,14822,9436,3144,2815.494,2961,4842,8121,6184,3139871616,7681,972778
201971,30922,9084,0182,3142.846,1931,1745,0191,4553,0377451114,3913,644812
201868,61922,4346,5863,4474.095,0651,1233,9421,2883,1929958815,5645,873840
201765,01721,6745,8463,0913.475,6171,1674,4501,1213,5959055814,3946,434881
201659,07420,5704,9712,5462.734,7841,1973,5879573,92511740511,5457,654929
201556,22319,5584,7922,6982.714,9298804,0498223,90511946610,8069,968990
201453,41718,476—2,2862.144,1119403,1717333,71010039110,08611,8531,061
201350,52117,327—1,9591.693,7621,2112,5517044,3931005419,03013,8571,152
201250,20817,350—1,8391.434,3491,8292,5206472,9371071,0147,62716,5331,273
201148,81517,152—2,0101.423,8521,3292,5235712,6181156526,57318,1121,403
201047,22016,463—1,7831.214,0541,7992,2553915041026325,08019,0691,464
200948,23016,501—2,1951.494,1223,2668564918952455,03918,0551,468
200848,28316,727—2,8091.864,3474,0103374282,27599281—16,098—

Some concepts are structurally absent for certain industries (banks report no gross profit or capex). Missing ≠ zero.

Compare with peers →·10-K filings on EDGAR ↗