One-glance verdict
Overvalued
$11.20 our estimate vs market $45.84
Wall Street consensus: $46.50 (315.2% higher than our fair-value estimate)
309% above our estimate, beyond the bull case
Fundamentals snapshot
Lamb Weston Holdings, Inc.
LW · NYQ · Consumer Defensive · Packaged Foods
Current price
$45.84
52-week range
$37.62 - $67.07
Market cap
$6.33B
Balance sheet
Distressed
4.25x Stretched
Net debt $3.96B. 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 20.6% last year.
- Reward Returns 17.4% on equity, ahead of 83% of its peers.
- Risk Net debt grew 83.5% over 3 years.
- Risk Insider ownership is only 3.1% (peer median: 15.4%).
What this company does
Lamb Weston Holdings, Inc.
Lamb Weston is a major producer of frozen potato products, like the french fries you get at restaurants and the ones you buy at the grocery store. The company makes its money selling these products in huge volumes to big customers, including fast-food chains and major supermarkets who sometimes sell them under their own store brand. Because its products are a key part of the food supply chain (the whole system of getting food from the farm to your table), its business is sensitive to changes in dining habits and grocery costs.
How the company got here
Founded in 1950 by Gilbert Lamb in Oregon, the company initially focused on processing peas. A major turning point came in 1960 with the invention of the Lamb Water Gun Knife, a device that revolutionized the process of cutting potatoes for french fries. This innovation propelled the company into the frozen potato market, aligning with the rising popularity of fast-food restaurants. After being acquired by ConAgra Foods in 1988, Lamb Weston was spun off as an independent public company in 2016.
What it actually does
Lamb Weston is one of the world's largest producers of frozen potato products. You've likely eaten their products without knowing it, as they supply french fries, waffle fries, and other potato items to many large restaurant chains and foodservice companies. They also sell frozen potato products in grocery stores under their own brands, like Lamb Weston, Grown in Idaho, and Alexia, as well as store brands. The company's offerings include not just fries, but also sweet potato products, tater tots, and other appetizers.
Global
This is Lamb Weston's largest business segment, making up more than half of its sales. It sells and distributes frozen potato products to large, multinational quick-service restaurant chains (fast-food restaurants like McDonald's) and other foodservice customers in North America and around the world. Essentially, this part of the business ensures that major fast-food brands have a consistent supply of fries and other potato items for their restaurants globally.
Foodservice
The Foodservice segment focuses on selling branded and private label frozen potato products to a wide range of customers in North America. This includes smaller regional restaurant chains, independent restaurants, and distributors who then sell to places like schools, hospitals, and sports stadiums. This segment is a significant contributor to the company's profits and represents a large portion of their business, just behind the Global segment.
Retail
This segment sells the company's branded and private label frozen potato products directly to consumers through grocery stores, mass merchants (large retail stores that sell a wide variety of goods), and club stores. When you see brands like 'Grown in Idaho' or 'Alexia' in the freezer aisle, you are looking at products from this part of Lamb Weston's business. While smaller than the Global and Foodservice segments, it's the most direct way the company reaches everyday shoppers.
What management is betting on now
Lamb Weston is focused on expanding its business internationally, particularly in Asia, where the demand for frozen potato products is growing. The company is also investing in technology and automation to make its manufacturing plants more efficient and reduce costs. They are working on developing new and innovative products, such as fries that stay crispy longer for food delivery. Additionally, after some operational challenges, management is prioritizing improving its supply chain (the entire process of making and selling goods, from getting raw materials to delivering the final product to customers) to ensure reliable service to its customers.
Price history
How the share price has moved
—
Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q4
$150.60M
FY2025 Q1
$4.30M
FY2025 Q2
$-49.60M
FY2025 Q3
$-19.80M
FY2025 Q4
$295.20M
FY2026 Q1
$274.40M
FY2026 Q2
$101.00M
FY2026 Q3
$-36.30M
Revenue
—
Net income
$54.00M
Diluted EPS
0.39
Operating cash flow
$65.20M
Free cash flow
$-36.30M
Fetching…
Sources
Revenue
—
Net income
$62.10M
Diluted EPS
0.44
Operating cash flow
$178.40M
Free cash flow
$101.00M
Fetching…
Sources
Revenue
—
Net income
$64.30M
Diluted EPS
0.46
Operating cash flow
$352.00M
Free cash flow
$274.40M
Fetching…
Sources
Revenue
$6.45B
Net income
$119.90M
Diluted EPS
0.84
Operating cash flow
$383.00M
Free cash flow
$295.20M
Fetching…
Sources
Revenue
—
Net income
$146.00M
Diluted EPS
1.03
Operating cash flow
$56.00M
Free cash flow
$-19.80M
Fetching…
Sources
Revenue
—
Net income
$-36.10M
Diluted EPS
-0.25
Operating cash flow
$99.10M
Free cash flow
$-49.60M
Fetching…
Sources
Revenue
—
Net income
$127.40M
Diluted EPS
0.88
Operating cash flow
$330.20M
Free cash flow
$4.30M
Fetching…
Sources
Revenue
$6.47B
Net income
$129.60M
Diluted EPS
0.89
Operating cash flow
$316.70M
Free cash flow
$150.60M
Fetching…
Sources
Is it cheap or expensive?
Fair value $11.20 vs current price $45.84
Wall Street consensus is the average analyst price target: $46.50 (315.2% higher than our fair-value estimate).
Our most-likely fair value is $11.20 a share — about 75.6% below today's price of $45.84, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Distressed
Net debt $4.0B. Interest coverage 4.3x.
Net debt
$3.96B
Interest coverage
4.25x
Lamb Weston Holdings, Inc.'s profit covers its interest bill about 4.3 times over. which is stronger than most peers shown here.
Distressed
Worse cushion
Baseline
Better cushion
LW
BASELINE
Lamb Weston Holdings, Inc.
Total debt $4.02B Interest coverage 4.25x This is the baseline the peer rows are being compared against.
Total debt $7.33B Interest coverage 3.50x -18% vs LW Carries about 1.2x less debt cushion than LW.
Total debt $21.13B Interest coverage 4.90x +15% vs LW Carries about 1.2x more debt cushion than LW.
Total debt $7.34B Interest coverage 3.92x -8% vs LW Has roughly the same debt cushion as LW.
Total debt $250.00M Interest coverage 11.47x +170% vs LW Carries about 2.7x more debt cushion than LW.
Total debt $7.63B Interest coverage 2.29x -46% vs LW Carries about 1.9x less debt cushion than LW.
What you should know
The case for and against LW
3 Rewards
2 Risks
Rewards
-
Revenue grew 20.6% last year.
-
Returns 17.4% on equity, ahead of 83% of its peers.
-
Free cash flow was positive in 9/10 years.
Risks
-
Net debt grew 83.5% over 3 years.
-
Insider ownership is only 3.1% (peer median: 15.4%).
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)
21.52x
Forward P/E
15.26x
P/B
3.49x
P/S
0.97x
EV/EBITDA
8.77x
PEG ratio
1.03x
Profitability
How much profit each dollar creates
Gross margin
20.7%
Operating margin
10.9%
Net margin
4.6%
ROE
17.4%
ROA
6.3%
Health
Liquidity and balance-sheet strength
Debt / equity
2.20x
Current ratio
1.46x
Quick ratio
0.57x
Total debt
$4.02B
Total cash
$57.50M
Growth
How the business has been compounding
Revenue TTM
$19.19B
Revenue 5Y CAGR
69.0%
EPS TTM
2.13
EPS 5Y CAGR
21.9%
Cash flow
How much cash the business throws off
Operating CF TTM
$978.60M
Free CF TTM
$230.10M
FCF margin
1.2%
Dividend
Shareholder payout
Yield
3.4%
Payout ratio
70.0%
Last ex-div date
2026-05-08