Investment Thesis
Ferguson Enterprises demonstrates solid financial health with exceptional free cash flow generation ($680M, 9.1% FCF margin) and moderate leverage (0.68x debt/equity). However, returns on capital are modest (ROE 7.0%, ROA 2.3%), and absent YoY growth metrics obscure the trajectory; the wholesale distribution business faces structural margin pressures.
Strengths
- Exceptional free cash flow generation at $680M with 9.1% FCF margin demonstrates operational efficiency
- Solid liquidity position with 1.78x current ratio and manageable 0.68x debt-to-equity ratio
- Large diversified revenue base of $7.5B in stable wholesale distribution sector provides scale and resilience
Risks
- Low returns on capital (ROE 7.0%, ROA 2.3%) suggest inefficient capital deployment or intense competitive pressure
- Quick ratio of 0.96x indicates working capital constraints and potential inventory management pressure
- Missing year-over-year growth comparisons prevent assessment of revenue and earnings trajectory in competitive wholesale market
Key Metrics to Watch
- Free cash flow trend and sustainability relative to capital allocation needs
- Year-over-year revenue and net income growth rates
- Debt-to-equity ratio changes and interest coverage ratio trends
Financial Metrics
Revenue
7.5B
Net Income
414.0M
EPS (Diluted)
$2.13
Free Cash Flow
680.0M
Total Assets
17.8B
Cash
820.0M
Profitability Ratios
Gross Margin
31.0%
Operating Margin
8.2%
Net Margin
5.5%
ROE
7.0%
ROA
2.3%
FCF Margin
9.1%
Balance Sheet & Liquidity
Current Ratio
1.78x
Quick Ratio
0.96x
Debt/Equity
0.68x
Debt/Assets
67.0%
Interest Coverage
N/A
Long-term Debt
4.0B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-07T08:55:09.052117 |
Data as of: 2026-03-31 |
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