LABCORP HOLDINGS INC (LH) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:LH - US5049221055 - Common Stock
266.66 USD
-3.31 (-1.23%)
266.66 USD
0 (0%)
Overall LH gets a fundamental rating of 5 out of 10. We evaluated LH against 102 industry peers in the Health Care Providers & Services industry. LH has an average financial health and profitability rating. LH has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
- In the past year LH was profitable.
- LH had a positive operating cash flow in the past year.
- In the past 5 years LH has always been profitable.
- In the past 5 years LH always reported a positive cash flow from operatings.
1.2 Ratios
- LH has a better Return On Assets (4.68%) than 75.49% of its industry peers.
- LH has a Return On Equity of 9.83%. This is in the better half of the industry: LH outperforms 71.57% of its industry peers.
- LH's Return On Invested Capital of 6.32% is fine compared to the rest of the industry. LH outperforms 63.73% of its industry peers.
- LH had an Average Return On Invested Capital over the past 3 years of 6.31%. This is below the industry average of 9.21%.
- The 3 year average ROIC (6.31%) for LH is below the current ROIC(6.32%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.68% | ||
| ROE | 9.83% | ||
| ROIC | 6.32% |
ROA(3y)4.3%
ROA(5y)6.46%
ROE(3y)9.08%
ROE(5y)13.4%
ROIC(3y)6.31%
ROIC(5y)8.87%
1.3 Margins
- LH has a Profit Margin of 6.21%. This is amongst the best in the industry. LH outperforms 83.33% of its industry peers.
- LH's Profit Margin has declined in the last couple of years.
- Looking at the Operating Margin, with a value of 9.92%, LH is in the better half of the industry, outperforming 79.41% of the companies in the same industry.
- In the last couple of years the Operating Margin of LH has declined.
- LH has a Gross Margin (28.45%) which is comparable to the rest of the industry.
- In the last couple of years the Gross Margin of LH has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.92% | ||
| PM (TTM) | 6.21% | ||
| GM | 28.45% |
OM growth 3Y-27.95%
OM growth 5Y-7.41%
PM growth 3Y-31.82%
PM growth 5Y-4.26%
GM growth 3Y-9.83%
GM growth 5Y-0.21%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so LH is destroying value.
- Compared to 1 year ago, LH has less shares outstanding
- Compared to 5 years ago, LH has less shares outstanding
- The debt/assets ratio for LH is higher compared to a year ago.
2.2 Solvency
- LH has an Altman-Z score of 3.17. This indicates that LH is financially healthy and has little risk of bankruptcy at the moment.
- LH has a better Altman-Z score (3.17) than 66.67% of its industry peers.
- LH has a debt to FCF ratio of 4.09. This is a neutral value as LH would need 4.09 years to pay back of all of its debts.
- LH has a better Debt to FCF ratio (4.09) than 69.61% of its industry peers.
- LH has a Debt/Equity ratio of 0.59. This is a neutral value indicating LH is somewhat dependend on debt financing.
- With a Debt to Equity ratio value of 0.59, LH perfoms like the industry average, outperforming 58.82% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.59 | ||
| Debt/FCF | 4.09 | ||
| Altman-Z | 3.17 |
ROIC/WACC0.76
WACC8.29%
2.3 Liquidity
- A Current Ratio of 1.55 indicates that LH should not have too much problems paying its short term obligations.
- LH has a Current ratio (1.55) which is in line with its industry peers.
- LH has a Quick Ratio of 1.35. This is a normal value and indicates that LH is financially healthy and should not expect problems in meeting its short term obligations.
- LH's Quick ratio of 1.35 is in line compared to the rest of the industry. LH outperforms 55.88% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.55 | ||
| Quick Ratio | 1.35 |
3. Growth
3.1 Past
- LH shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 9.71%, which is quite good.
- The Earnings Per Share has been growing slightly by 5.20% on average over the past years.
- LH shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 8.28%.
- Measured over the past years, LH shows a small growth in Revenue. The Revenue has been growing by 2.40% on average per year.
EPS 1Y (TTM)9.71%
EPS 3Y-20.05%
EPS 5Y5.2%
EPS Q2Q%19.43%
Revenue 1Y (TTM)8.28%
Revenue growth 3Y-0.32%
Revenue growth 5Y2.4%
Sales Q2Q%8.58%
3.2 Future
- Based on estimates for the next years, LH will show a small growth in Earnings Per Share. The EPS will grow by 7.93% on average per year.
- Based on estimates for the next years, LH will show a small growth in Revenue. The Revenue will grow by 4.05% on average per year.
EPS Next Y15.46%
EPS Next 2Y11.22%
EPS Next 3Y10.7%
EPS Next 5Y7.93%
Revenue Next Year7.74%
Revenue Next 2Y6.09%
Revenue Next 3Y5.66%
Revenue Next 5Y4.05%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 16.86 indicates a correct valuation of LH.
- 80.39% of the companies in the same industry are more expensive than LH, based on the Price/Earnings ratio.
- Compared to an average S&P500 Price/Earnings ratio of 27.21, LH is valued a bit cheaper.
- The Price/Forward Earnings ratio is 14.80, which indicates a correct valuation of LH.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of LH indicates a somewhat cheap valuation: LH is cheaper than 78.43% of the companies listed in the same industry.
- LH's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 24.26.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.86 | ||
| Fwd PE | 14.8 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, LH is valued a bit cheaper than 61.76% of the companies in the same industry.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of LH indicates a somewhat cheap valuation: LH is cheaper than 74.51% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.01 | ||
| EV/EBITDA | 14.39 |
4.3 Compensation for Growth
- The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- LH has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.09
PEG (5Y)3.24
EPS Next 2Y11.22%
EPS Next 3Y10.7%
5. Dividend
5.1 Amount
- LH has a Yearly Dividend Yield of 1.07%. Purely for dividend investing, there may be better candidates out there.
- LH's Dividend Yield is rather good when compared to the industry average which is at 0.59. LH pays more dividend than 86.27% of the companies in the same industry.
- With a Dividend Yield of 1.07, LH pays less dividend than the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.07% |
5.2 History
- The dividend of LH is nicely growing with an annual growth rate of 96.38%!
- LH has been paying a dividend for over 5 years, so it has already some track record.
- LH has decreased its dividend in the last 3 years.
Dividend Growth(5Y)96.38%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
- 28.24% of the earnings are spent on dividend by LH. This is a low number and sustainable payout ratio.
- LH's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP28.24%
EPS Next 2Y11.22%
EPS Next 3Y10.7%
LABCORP HOLDINGS INC / LH FAQ
What is the ChartMill fundamental rating of LABCORP HOLDINGS INC (LH) stock?
ChartMill assigns a fundamental rating of 5 / 10 to LH.
What is the valuation status for LH stock?
ChartMill assigns a valuation rating of 6 / 10 to LABCORP HOLDINGS INC (LH). This can be considered as Fairly Valued.
What is the profitability of LH stock?
LABCORP HOLDINGS INC (LH) has a profitability rating of 6 / 10.
What is the valuation of LABCORP HOLDINGS INC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for LABCORP HOLDINGS INC (LH) is 16.86 and the Price/Book (PB) ratio is 2.54.
What is the expected EPS growth for LABCORP HOLDINGS INC (LH) stock?
The Earnings per Share (EPS) of LABCORP HOLDINGS INC (LH) is expected to grow by 15.46% in the next year.