One-glance verdict
Overvalued
$349.73 our estimate vs market $570.03
Wall Street consensus: $571.00 (63.3% higher than our fair-value estimate)
63% above our estimate, beyond the bull case
Fundamentals snapshot
Lennox International Inc.
LII · NYQ · Industrials · Building Products & Equipment
Current price
$570.03
52-week range
$434.06 - $689.44
Market cap
$19.84B
Balance sheet
Stretched
22.70x Strong cushion
Net debt $1.90B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 1.2% last year.
- Reward Returns 76.8% on equity, ahead of 83% of its peers.
- Risk Stock trades 9.3% above its 5-year average P/E.
- Risk Net debt grew 2.8% over 3 years.
What this company does
Lennox International Inc.
Lennox International designs and sells the heating and air conditioning (HVAC) systems that control the temperature in homes and commercial buildings. The company makes most of its money selling new units to builders and homeowners, as well as the replacement parts and services needed for repairs and upgrades. Because heating and cooling are essential, Lennox benefits from both new construction and the constant need for people to replace their old, worn-out systems.
How the company got here
Lennox started back in 1895 when its founder, Dave Lennox, began manufacturing the world's first riveted-steel furnace. [1, 7] The company was purchased in 1904 by D.W. Norris and remained a family-run business for decades, expanding from just furnaces into the new field of air conditioning in the 1950s. [2, 4, 7] A major turning point was the 1982 introduction of the high-efficiency Pulse furnace, which was a significant leap in home heating technology. [2] The company became publicly traded in 1999, and more recently has focused its business on the North American market by selling off its European operations. [1, 7, 8]
What it actually does
Lennox is in the business of climate control, which means they make products that heat, cool, and improve the air in buildings. [9, 12] For your home, this includes familiar items like furnaces, air conditioners, and heat pumps (a single unit that can both heat and cool). [6, 19] They also sell products to improve indoor air quality, such as air purifiers, humidifiers, and smart thermostats that let you control the temperature from your phone. [9, 17] For businesses, Lennox provides larger, more powerful systems you might see on the rooftops of stores or offices, as well as refrigeration systems for places like supermarkets. [6, 7]
Home Comfort Solutions
This is the largest part of Lennox's business, focused entirely on products for houses. [5, 14] It makes and sells furnaces, air conditioners, heat pumps, and a variety of equipment to improve the air quality inside a home. [6, 15] When a homeowner needs a new heating or cooling system, they typically buy it from a local dealer who then installs the Lennox equipment. [15, 23] This segment generates the majority of the company's total revenue (the total money brought in from sales). [5]
Building Climate Solutions
This segment is the company's business-to-business arm, providing climate control systems for commercial spaces like offices, schools, and retail stores. The products here are much larger and more complex, such as the big heating and cooling units you see on the roofs of commercial buildings. [6, 7] This division also sells commercial refrigeration equipment to businesses like supermarkets and restaurants. [6] While smaller than the residential business, it's a significant part of the company's overall operations. [13, 14]
What management is betting on now
The company's main strategy is to focus on its strong position in the North American market. [20] A key priority is developing more energy-efficient and technologically advanced products, like smart home systems and highly efficient heat pumps, to meet growing customer demand for sustainability. [12, 20, 22] Management is also investing heavily in its supply chain (the entire process of making and delivering a product) and digital tools to make it easier for dealers to sell and service Lennox products. [18, 24] Their long-term financial goals are to grow revenue (the total amount of money the company brings in from sales) and increase profit margins (the percentage of revenue the company keeps as profit). [21]
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q2
$151.30M
FY2024 Q3
$410.90M
FY2024 Q4
$272.20M
FY2025 Q1
$-61.30M
FY2025 Q2
$58.30M
FY2025 Q3
$265.10M
FY2025 Q4
$376.70M
FY2026 Q1
$-39.40M
Revenue
$1.14B
Net income
$117.20M
Diluted EPS
3.35
Operating cash flow
$16.10M
Free cash flow
$-39.40M
Fetching…
Sources
Revenue
$1.20B
Net income
$142.50M
Diluted EPS
4.07
Operating cash flow
$405.90M
Free cash flow
$376.70M
Fetching…
Sources
Revenue
$1.43B
Net income
$245.80M
Diluted EPS
6.98
Operating cash flow
$300.70M
Free cash flow
$265.10M
Fetching…
Sources
Revenue
$1.50B
Net income
$277.60M
Diluted EPS
7.82
Operating cash flow
$86.80M
Free cash flow
$58.30M
Fetching…
Sources
Revenue
$1.07B
Net income
$120.30M
Diluted EPS
3.37
Operating cash flow
$-35.80M
Free cash flow
$-61.30M
Fetching…
Sources
Revenue
$1.34B
Net income
$197.70M
Diluted EPS
5.52
Operating cash flow
$332.40M
Free cash flow
$272.20M
Fetching…
Sources
Revenue
$1.50B
Net income
$239.00M
Diluted EPS
6.68
Operating cash flow
$452.10M
Free cash flow
$410.90M
Fetching…
Sources
Revenue
$1.45B
Net income
$245.90M
Diluted EPS
6.87
Operating cash flow
$184.00M
Free cash flow
$151.30M
Fetching…
Sources
Is it cheap or expensive?
Fair value $349.73 vs current price $570.03
Wall Street consensus is the average analyst price target: $571.00 (63.3% higher than our fair-value estimate).
Our most-likely fair value is $349.73 a share — about 38.6% below today's price of $570.03, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Stretched
Net debt $1.9B. Interest coverage 22.7x.
Net debt
$1.90B
Interest coverage
22.70x
Lennox International Inc.'s profit covers its interest bill about 22.7 times over. which is stronger than most peers shown here.
Stretched
Worse cushion
Baseline
Better cushion
LII
BASELINE
Lennox International Inc.
Total debt $1.95B Interest coverage 22.70x This is the baseline the peer rows are being compared against.
Total debt $12.57B Interest coverage 4.16x -82% vs LII Carries about 5.5x less debt cushion than LII.
Total debt $4.62B Interest coverage 17.50x -23% vs LII Carries about 1.3x less debt cushion than LII.
Total debt $9.52B Interest coverage 12.46x -45% vs LII Carries about 1.8x less debt cushion than LII.
Total debt $486.23M Interest coverage 140.77x +520% vs LII Carries about 6.2x more debt cushion than LII.
Total debt $443.33M Interest coverage 8.59x -62% vs LII Carries about 2.6x less debt cushion than LII.
What you should know
The case for and against LII
3 Rewards
2 Risks
Rewards
-
Revenue grew 1.2% last year.
-
Returns 76.8% on equity, ahead of 83% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Stock trades 9.3% above its 5-year average P/E.
-
Net debt grew 2.8% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
25.31x
Forward P/E
21.32x
P/B
16.35x
P/S
3.77x
EV/EBITDA
18.84x
PEG ratio
1.64x
Profitability
How much profit each dollar creates
Gross margin
33.2%
Operating margin
14.3%
Net margin
15.1%
ROE
76.8%
ROA
16.7%
Health
Liquidity and balance-sheet strength
Debt / equity
1.61x
Current ratio
1.57x
Quick ratio
0.54x
Total debt
$1.95B
Total cash
$50.20M
Growth
How the business has been compounding
Revenue TTM
$5.26B
Revenue 5Y CAGR
5.5%
EPS TTM
22.52
EPS 5Y CAGR
18.0%
Cash flow
How much cash the business throws off
Operating CF TTM
$809.50M
Free CF TTM
$638.80M
FCF margin
12.1%
Dividend
Shareholder payout
Yield
0.9%
Payout ratio
23.1%
Last ex-div date
2026-06-30