La Z Stock Story


USD 28.94  0.56  1.97%   

As many baby boomers are still indifferent towards consumer cyclical space, it makes sense to go over La-Z-Boy. We will evaluate why we are still confident in anticipation of a recovery. What is the firm valuation so far in 2022? We are going to cover La-Z-Boy perspective on valuation to give investors a better transparency on taking a position in it.
Published over a month ago
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Our prognosis on La Z (NYSE:LZB) to bounce back in July

La-Z-Boy has 411.7 M in debt with debt to equity (D/E) ratio of 0.52, which is OK given its current industry classification. The entity has a current ratio of 1.32, which is typical for the industry and considered as normal. Debt can assist La Z until it has trouble settling it off, either with new capital or with free cash flow. So, La Z's shareholders could walk away with nothing if the company can't fulfill its legal obligations to repay debt. However, a more frequent occurrence is when companies like La-Z-Boy sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for La Z to invest in growth at high rates of return. When we think about La Z's use of debt, we should always consider it together with cash and equity.
The company owns a Beta (Systematic Risk) of 1.1206, which conveys a somewhat significant risk relative to the market. Let's try to break down what La Z's beta means in this case. La Z returns are very sensitive to returns on the market. As the market goes up or down, La Z is expected to follow. Even though it is essential to pay attention to La-Z-Boy existing price patterns, it is always good to be careful when utilizing equity price patterns. Our approach into estimating any stock's future performance is to check both, its past performance charts as well as the business as a whole, including all available technical indicators. La Z exposes twenty-one different technical indicators, which can help you to evaluate its performance. La-Z-Boy has an expected return of -0.29%. Please be advised to verify La-Z-Boy information ratio, and the relationship between the downside deviation and value at risk to decide if La-Z-Boy performance from the past will be repeated in the future.
We determine the current worth of La-Z-Boy using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of La-Z-Boy based exclusively on its fundamental and basic technical indicators. By analyzing La Z's financials, quarterly and monthly indicators, and related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of La Z's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of La Z. We calculate exposure to La Z's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to La Z's related companies.

La-Z-Boy Investment Alerts

La Z investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring La-Z-Boy performance across your portfolios.Please check all investment alerts for La Z

La Z Valuation Ratios as Compared to Competition

Our valuation model uses many indicators to compare La Z value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across La Z competition to find correlations between indicators driving the intrinsic value of La Z.

How does La Z utilize its cash?

To perform a cash flow analysis of La Z, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash La Z is receiving and how much cash it distributes out in a given period. The La Z cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.
La Z Net Cash Flow from Operations is projected to decrease significantly based on the last few years of reporting. The past year's Net Cash Flow from Operations was at 79 Million

La Z exotic insider transaction detected

Legal trades by La Z insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
La Z insider trading alert for general transaction of common shares by Jennifer McCurry, Chief Accounting Officer, on 3rd of August 2022. This event was filed by Lazboy Inc with SEC on 2022-08-03. Statement of changes in beneficial ownership - SEC Form 4. Jennifer McCurry currently serves as chief accounting officer, vice president controller of La-Z-Boy [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

Breaking down La Z Indicators

The firm reported the last year's revenue of 2.19 B. Total Income to common stockholders was 130.03 M with profit before taxes, overhead, and interest of 740.26 M.
 2021 2022 (projected)
Long Term Debt to Equity0.0010790.001107
Interest Coverage18.4818.97

Margins Breakdown

La Z profit margins show the degree to which it makes money. Margin indicators are used not only by investors but also by creditors or La Z itself as indicators of financial health and management effectiveness. Please look more closely at the different varieties of La Z profit margins.
Operating Margin6.88
EBITDA Margin0.1
Gross Margin0.42
Profit Margin0.0487

La Z Revenue Per Employee is somewhat stable at the moment. Further, La Z Long Term Debt to Equity is decreasing over the last 6 years. The current value of La Z Long Term Debt to Equity is 0.001107. La Z Revenue Per Employee is increasing over the last 4 years. Further, La Z Long Term Debt to Equity is decreasing over the last 6 years. The previous year's value of La Z Long Term Debt to Equity was 0.001107.

Are La Z technical ratios showing a throwback?

The skewness is down to -0.16 as of today. La-Z-Boy exhibits very low volatility with skewness of -0.16 and kurtosis of 0.3. However, we advise investors to further study La-Z-Boy technical indicators to make sure all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure La Z's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact La Z's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

La Z Implied Volatility

La Z's implied volatility exposes the market's sentiment of La-Z-Boy stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if La Z's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that La Z stock will not fluctuate a lot when La Z's options are near their expiration.

Our Conclusion on La Z

Whereas other entities under the furnishings, fixtures & appliances industry are still a bit expensive, La Z may offer a potential longer-term growth to investors. To conclude, as of the 20th of June 2022, our analysis shows that La Z almost mirrors the market. The company is undervalued and projects low odds of financial distress for the next 2 years. Our primary 90 days recommendation on the company is Strong Hold.

Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Gabriel Shpitalnik do not own shares of La-Z-Boy. Please refer to our Terms of Use for any information regarding our disclosure principles.

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