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LEON'S FURNITURE LTD (LNF.CA) Stock Fundamental Analysis

TSX:LNF - Toronto Stock Exchange - CA5266821092 - Common Stock - Currency: CAD

25.48  -0.48 (-1.85%)

Fundamental Rating

7

Taking everything into account, LNF scores 7 out of 10 in our fundamental rating. LNF was compared to 15 industry peers in the Specialty Retail industry. Both the health and profitability get an excellent rating, making LNF a very profitable company, without any liquidiy or solvency issues. LNF is not valued too expensively and it also shows a decent growth rate.


Dividend Valuation Growth Profitability Health

8

1. Profitability

1.1 Basic Checks

In the past year LNF was profitable.
In the past year LNF had a positive cash flow from operations.
In the past 5 years LNF has always been profitable.
Each year in the past 5 years LNF had a positive operating cash flow.
LNF.CA Yearly Net Income VS EBIT VS OCF VS FCFLNF.CA Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 100M 200M 300M 400M 500M

1.2 Ratios

LNF has a better Return On Assets (5.92%) than 85.71% of its industry peers.
LNF has a better Return On Equity (12.16%) than 85.71% of its industry peers.
LNF has a better Return On Invested Capital (8.99%) than 85.71% of its industry peers.
LNF had an Average Return On Invested Capital over the past 3 years of 12.83%. This is significantly above the industry average of 6.64%.
Industry RankSector Rank
ROA 5.92%
ROE 12.16%
ROIC 8.99%
ROA(3y)7.62%
ROA(5y)6.92%
ROE(3y)19.67%
ROE(5y)17.35%
ROIC(3y)12.83%
ROIC(5y)11.26%
LNF.CA Yearly ROA, ROE, ROICLNF.CA Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 5 10 15 20 25

1.3 Margins

LNF has a Profit Margin of 5.24%. This is in the better half of the industry: LNF outperforms 71.43% of its industry peers.
In the last couple of years the Profit Margin of LNF has grown nicely.
LNF has a better Operating Margin (7.58%) than 64.29% of its industry peers.
In the last couple of years the Operating Margin of LNF has grown nicely.
With a decent Gross Margin value of 44.15%, LNF is doing good in the industry, outperforming 71.43% of the companies in the same industry.
LNF's Gross Margin has been stable in the last couple of years.
Industry RankSector Rank
OM 7.58%
PM (TTM) 5.24%
GM 44.15%
OM growth 3Y-6.04%
OM growth 5Y1.9%
PM growth 3Y-8.38%
PM growth 5Y2.69%
GM growth 3Y-0.17%
GM growth 5Y0.19%
LNF.CA Yearly Profit, Operating, Gross MarginsLNF.CA Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 10 20 30 40

8

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), LNF is creating some value.
LNF has more shares outstanding than it did 1 year ago.
The number of shares outstanding for LNF has been reduced compared to 5 years ago.
LNF has a better debt/assets ratio than last year.
LNF.CA Yearly Shares OutstandingLNF.CA Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 20M 40M 60M
LNF.CA Yearly Total Debt VS Total AssetsLNF.CA Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 500M 1B 1.5B 2B

2.2 Solvency

An Altman-Z score of 3.03 indicates that LNF is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.03, LNF is in the better half of the industry, outperforming 71.43% of the companies in the same industry.
LNF has a debt to FCF ratio of 1.80. This is a very positive value and a sign of high solvency as it would only need 1.80 years to pay back of all of its debts.
LNF's Debt to FCF ratio of 1.80 is amongst the best of the industry. LNF outperforms 100.00% of its industry peers.
A Debt/Equity ratio of 0.30 indicates that LNF is not too dependend on debt financing.
LNF's Debt to Equity ratio of 0.30 is fine compared to the rest of the industry. LNF outperforms 78.57% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.3
Debt/FCF 1.8
Altman-Z 3.03
ROIC/WACC1.02
WACC8.83%
LNF.CA Yearly LT Debt VS Equity VS FCFLNF.CA Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 200M 400M 600M 800M 1B

2.3 Liquidity

LNF has a Current Ratio of 1.38. This is a normal value and indicates that LNF is financially healthy and should not expect problems in meeting its short term obligations.
With a decent Current ratio value of 1.38, LNF is doing good in the industry, outperforming 71.43% of the companies in the same industry.
A Quick Ratio of 0.77 indicates that LNF may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.77, LNF is in the better half of the industry, outperforming 64.29% of the companies in the same industry.
LNF does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
Industry RankSector Rank
Current Ratio 1.38
Quick Ratio 0.77
LNF.CA Yearly Current Assets VS Current LiabilitesLNF.CA Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 200M 400M 600M 800M 1B

4

3. Growth

3.1 Past

LNF shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -2.48%.
Measured over the past years, LNF shows a quite strong growth in Earnings Per Share. The EPS has been growing by 9.58% on average per year.
Looking at the last year, LNF shows a small growth in Revenue. The Revenue has grown by 3.69% in the last year.
The Revenue has been growing slightly by 1.84% on average over the past years.
EPS 1Y (TTM)-2.48%
EPS 3Y0.16%
EPS 5Y9.58%
EPS Q2Q%-28%
Revenue 1Y (TTM)3.69%
Revenue growth 3Y3.4%
Revenue growth 5Y1.84%
Sales Q2Q%-1.38%

3.2 Future

The Earnings Per Share is expected to grow by 2.39% on average over the next years.
Based on estimates for the next years, LNF will show a small growth in Revenue. The Revenue will grow by 2.65% on average per year.
EPS Next Y-5.1%
EPS Next 2Y0.32%
EPS Next 3Y2.39%
EPS Next 5YN/A
Revenue Next Year3.58%
Revenue Next 2Y3%
Revenue Next 3Y2.65%
Revenue Next 5YN/A

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less 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.
LNF.CA Yearly Revenue VS EstimatesLNF.CA Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 500M 1B 1.5B 2B 2.5B
LNF.CA Yearly EPS VS EstimatesLNF.CA Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 0.5 1 1.5 2 2.5

6

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 12.93, which indicates a correct valuation of LNF.
Based on the Price/Earnings ratio, LNF is valued a bit cheaper than the industry average as 78.57% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 28.12. LNF is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 12.23, which indicates a correct valuation of LNF.
LNF's Price/Forward Earnings ratio is rather cheap when compared to the industry. LNF is cheaper than 85.71% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 94.77, LNF is valued rather cheaply.
Industry RankSector Rank
PE 12.93
Fwd PE 12.23
LNF.CA Price Earnings VS Forward Price EarningsLNF.CA Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60 80

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of LNF indicates a somewhat cheap valuation: LNF is cheaper than 78.57% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of LNF indicates a somewhat cheap valuation: LNF is cheaper than 78.57% of the companies listed in the same industry.
Industry RankSector Rank
P/FCF 7.56
EV/EBITDA 6.06
LNF.CA Per share dataLNF.CA EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 10 20 30

4.3 Compensation for Growth

The excellent profitability rating of LNF may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.35
EPS Next 2Y0.32%
EPS Next 3Y2.39%

5

5. Dividend

5.1 Amount

LNF has a Yearly Dividend Yield of 3.08%.
LNF's Dividend Yield is rather good when compared to the industry average which is at 5.09. LNF pays more dividend than 85.71% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.29, LNF pays a bit more dividend than the S&P500 average.
Industry RankSector Rank
Dividend Yield 3.08%

5.2 History

The dividend of LNF has a limited annual growth rate of 5.18%.
LNF has paid a dividend for at least 10 years, which is a reliable track record.
LNF has decreased its dividend in the last 3 years.
Dividend Growth(5Y)5.18%
Div Incr Years2
Div Non Decr Years2
LNF.CA Yearly Dividends per shareLNF.CA Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0.5 1 1.5

5.3 Sustainability

LNF pays out 36.07% of its income as dividend. This is a sustainable payout ratio.
LNF's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP36.07%
EPS Next 2Y0.32%
EPS Next 3Y2.39%
LNF.CA Yearly Income VS Free CF VS DividendLNF.CA Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 100M 200M 300M 400M
LNF.CA Dividend Payout.LNF.CA Dividend Payout, showing the Payout Ratio.LNF.CA Dividend Payout.PayoutRetained Earnings

LEON'S FURNITURE LTD

TSX:LNF (2/7/2025, 7:00:00 PM)

25.48

-0.48 (-1.85%)

Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)11-07 2024-11-07/amc
Earnings (Next)02-25 2025-02-25
Inst Owners5.65%
Inst Owner ChangeN/A
Ins Owners3.35%
Ins Owner ChangeN/A
Market Cap1.74B
Analysts74
Price Target35.29 (38.5%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield 3.08%
Yearly Dividend0.64
Dividend Growth(5Y)5.18%
DP36.07%
Div Incr Years2
Div Non Decr Years2
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.47%
Min EPS beat(2)-2.79%
Max EPS beat(2)3.72%
EPS beat(4)3
Avg EPS beat(4)12.44%
Min EPS beat(4)-2.79%
Max EPS beat(4)27.3%
EPS beat(8)4
Avg EPS beat(8)-1.62%
EPS beat(12)6
Avg EPS beat(12)4.48%
EPS beat(16)10
Avg EPS beat(16)19.4%
Revenue beat(2)0
Avg Revenue beat(2)-3.74%
Min Revenue beat(2)-4.87%
Max Revenue beat(2)-2.62%
Revenue beat(4)2
Avg Revenue beat(4)-0.39%
Min Revenue beat(4)-4.87%
Max Revenue beat(4)3.67%
Revenue beat(8)2
Avg Revenue beat(8)-1.92%
Revenue beat(12)3
Avg Revenue beat(12)-0.67%
Revenue beat(16)6
Avg Revenue beat(16)-0.03%
PT rev (1m)0%
PT rev (3m)-7.73%
EPS NQ rev (1m)-0.35%
EPS NQ rev (3m)-8.01%
EPS NY rev (1m)-0.26%
EPS NY rev (3m)-2.51%
Revenue NQ rev (1m)0.12%
Revenue NQ rev (3m)-1.41%
Revenue NY rev (1m)0.04%
Revenue NY rev (3m)-1.32%
Valuation
Industry RankSector Rank
PE 12.93
Fwd PE 12.23
P/S 0.69
P/FCF 7.56
P/OCF 5.92
P/B 1.6
P/tB 4.08
EV/EBITDA 6.06
EPS(TTM)1.97
EY7.73%
EPS(NY)2.08
Fwd EY8.18%
FCF(TTM)3.37
FCFY13.24%
OCF(TTM)4.31
OCFY16.9%
SpS36.94
BVpS15.94
TBVpS6.24
PEG (NY)N/A
PEG (5Y)1.35
Profitability
Industry RankSector Rank
ROA 5.92%
ROE 12.16%
ROCE 11.83%
ROIC 8.99%
ROICexc 10.63%
ROICexgc 20.63%
OM 7.58%
PM (TTM) 5.24%
GM 44.15%
FCFM 9.13%
ROA(3y)7.62%
ROA(5y)6.92%
ROE(3y)19.67%
ROE(5y)17.35%
ROIC(3y)12.83%
ROIC(5y)11.26%
ROICexc(3y)17.65%
ROICexc(5y)15.24%
ROICexgc(3y)86.47%
ROICexgc(5y)62.45%
ROCE(3y)16.88%
ROCE(5y)14.81%
ROICexcg growth 3Y-18.31%
ROICexcg growth 5Y-16.98%
ROICexc growth 3Y-10.42%
ROICexc growth 5Y-4.4%
OM growth 3Y-6.04%
OM growth 5Y1.9%
PM growth 3Y-8.38%
PM growth 5Y2.69%
GM growth 3Y-0.17%
GM growth 5Y0.19%
F-Score6
Asset Turnover1.13
Health
Industry RankSector Rank
Debt/Equity 0.3
Debt/FCF 1.8
Debt/EBITDA 1.1
Cap/Depr 59.55%
Cap/Sales 2.53%
Interest Coverage 8.05
Cash Conversion 98.58%
Profit Quality 174.06%
Current Ratio 1.38
Quick Ratio 0.77
Altman-Z 3.03
F-Score6
WACC8.83%
ROIC/WACC1.02
Cap/Depr(3y)27.12%
Cap/Depr(5y)29.84%
Cap/Sales(3y)1.19%
Cap/Sales(5y)1.42%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-2.48%
EPS 3Y0.16%
EPS 5Y9.58%
EPS Q2Q%-28%
EPS Next Y-5.1%
EPS Next 2Y0.32%
EPS Next 3Y2.39%
EPS Next 5YN/A
Revenue 1Y (TTM)3.69%
Revenue growth 3Y3.4%
Revenue growth 5Y1.84%
Sales Q2Q%-1.38%
Revenue Next Year3.58%
Revenue Next 2Y3%
Revenue Next 3Y2.65%
Revenue Next 5YN/A
EBIT growth 1Y6.44%
EBIT growth 3Y-2.84%
EBIT growth 5Y3.77%
EBIT Next Year63.24%
EBIT Next 3Y20.29%
EBIT Next 5YN/A
FCF growth 1Y8088.99%
FCF growth 3Y-23.54%
FCF growth 5Y5.29%
OCF growth 1Y1937.59%
OCF growth 3Y-20.88%
OCF growth 5Y6.82%