LOW
Lowe's
Dividend / Cash flow
★ Quality 56/100Price today
$204.45
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What this business is made of
The business
America's second-biggest hardware chain: wins when you remodel your home.
Lowe's is the second-largest home improvement chain in the U.S., with ~1,700 stores. It sells building materials, tools, and appliances to homeowners (DIY) and professionals. It brings in $86.3B in revenue with a 33% gross margin; the professional customer weighs less here than at Home Depot.
Scale and logistics density that a new competitor can't replicate cheaply. The brand and physical location drive recurring traffic, but the moat is about cost and convenience, not pricing. It doesn't dominate the professional customer the way its direct rival does.
Revenue history
From $96.3B to $86.3B in 4 years. Sales are shrinking — the engine is losing steam.
Where each $100 of sales goes
Revenue $86.3B · FY2026
Of every $100 in sales, $92 goes to costs and operations; $8 is left as net profit (8% margin).
Catalysts and risks
FCF of $7.7B supports buybacks and a growing dividend (~25 years of increases).
Renewed remodeling spending as mortgage rates fall in 2026.
Pro initiative and digital platform aiming to regain share against Home Depot.
Debt of $37.5B against just $1.0B in cash — high leverage if sales drop.
Contracting revenue: -3% estimated CAGR (annual growth rate), no structural tailwind.
Dependence on the housing market; high rates freeze big remodeling projects.
Charlie's note
“A decent business at a price with no real discount: intrinsic value sits below where it usually trades. A good dog running second behind Home Depot — and the debt leaves little room for error.”
Analysis · June 2026
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