One-glance verdict
Undervalued
$65.22 our estimate vs market $47.85
Wall Street consensus: $55.25 (-15.3% lower than our fair-value estimate)
27% below our estimate, below the bear case
Fundamentals snapshot
Lamb Weston Holdings, Inc.
LW · NYQ · Consumer Defensive · Packaged Foods
Current price
$47.85
52-week range
$37.62 - $67.07
Market cap
$6.58B
Balance sheet
Distressed
3.85x Stretched
Net debt $3.97B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Revenue grew 2.5% last year.
- Reward Returns 16.3% on equity, ahead of 83% of its peers.
- Risk Net debt grew 21.6% over 3 years.
- Risk Stock trades 19.8% above its 5-year average P/E.
What this company does
Lamb Weston Holdings, Inc.
Lamb Weston is a major global producer of frozen potato products, like the french fries you'd find at fast-food chains and in the freezer aisle. The company makes most of its money selling these items in bulk to large restaurant chains, foodservice distributors, and grocery stores that sell them under their own brand names. This means its business performance often depends on how many people are eating out and buying frozen foods.
How the company got here
Lamb Weston's story began in 1950 when founder Gilbert Lamb started a food processing company in Oregon. A key invention, the water gun knife, revolutionized the industry by allowing potatoes to be cut into perfectly uniform french fries at high speed. After decades of growth and being part of a larger food corporation, ConAgra, Lamb Weston was spun off in 2016 to become its own publicly traded company. This move allowed it to focus entirely on its core business of frozen potato products.
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 many of the french fries, waffle fries, tater tots, and hash browns sold at fast-food chains and in the frozen food aisle of grocery stores. They sell these products under their own brands, like Lamb Weston and Alexia, as well as under the private labels (store brands) of retailers and restaurant chains. Essentially, they take potatoes grown on farms, primarily in the Pacific Northwest, and turn them into the various frozen potato items people eat at restaurants or buy to cook at home.
North America
This is the company's largest business segment, covering sales in the United States, Canada, and Mexico. It sells a wide range of frozen potato products to large restaurant chains, independent restaurants, and food distributors who then supply smaller eateries and institutions like schools and hospitals. This segment generates the majority of the company's revenue (the total money earned from sales). When you buy fries from a major U.S. fast-food chain, there's a good chance they came from this part of Lamb Weston's business.
International
This segment handles sales of frozen potato products to all customers outside of North America. It serves global and regional restaurant chains, foodservice distributors, and grocery stores in Europe, Asia, South America, and other parts of the world. While smaller than the North America segment, it represents a significant and growing part of the company's business as it expands its reach globally. This division helps bring American-style potato products to a worldwide customer base.
What management is betting on now
The company is currently focused on a strategy called "Focus to Win," which aims to improve how it operates and grow profits. This plan involves becoming more efficient to save money, strengthening relationships with key customers, and being more selective about where it invests its resources. Management is also emphasizing innovation (creating new and improved products) to stay ahead of competitors. The goal is to create a leaner organization that can deliver better results for investors over the long term.
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.
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
FY2026 Q4
$201.10M
Revenue
$6.61B
Net income
$109.60M
Diluted EPS
0.79
Operating cash flow
$347.30M
Free cash flow
$201.10M
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Sources
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
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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
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Sources
Revenue
—
Net income
$-36.10M
Diluted EPS
-0.25
Operating cash flow
$99.10M
Free cash flow
$-49.60M
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Sources
Revenue
—
Net income
$127.40M
Diluted EPS
0.88
Operating cash flow
$330.20M
Free cash flow
$4.30M
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Sources
Is it cheap or expensive?
Fair value $65.22 vs current price $47.85
Wall Street consensus is the average analyst price target: $55.25 (-15.3% lower than our fair-value estimate).
Our most-likely fair value is $65.22 a share — about 36.3% above today's price of $47.85, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Distressed
Net debt $4.0B. Interest coverage 3.9x.
Net debt
$3.97B
Interest coverage
3.85x
Lamb Weston Holdings, Inc.'s profit covers its interest bill about 3.9 times over. which is stronger than most peers shown here.
Distressed
Worse cushion
Baseline
Better cushion
LW
BASELINE
Lamb Weston Holdings, Inc.
Total debt $4.04B Interest coverage 3.85x This is the baseline the peer rows are being compared against.
Total debt $7.48B Interest coverage 3.23x -16% vs LW Carries about 1.2x less debt cushion than LW.
Total debt $19.00B Interest coverage 4.90x +27% vs LW Carries about 1.3x more debt cushion than LW.
Total debt $7.14B Interest coverage 3.92x +2% vs LW Has roughly the same debt cushion as LW.
Total debt $250.00M Interest coverage 11.47x +198% vs LW Carries about 3.0x more debt cushion than LW.
Total debt $7.63B Interest coverage 2.29x -40% vs LW Carries about 1.7x less debt cushion than LW.
What you should know
The case for and against LW
3 Rewards
3 Risks
Rewards
-
Revenue grew 2.5% last year.
-
Returns 16.3% on equity, ahead of 83% of its peers.
-
Free cash flow was positive in 9/10 years.
Risks
-
Net debt grew 21.6% over 3 years.
-
Stock trades 19.8% above its 5-year average P/E.
-
Insider ownership is only 2.9% (peer median: 15.8%).
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)
23.00x
Forward P/E
14.18x
P/B
3.60x
P/S
0.99x
EV/EBITDA
9.55x
PEG ratio
0.78x
Profitability
How much profit each dollar creates
Gross margin
20.7%
Operating margin
9.8%
Net margin
4.4%
ROE
16.3%
ROA
6.0%
Health
Liquidity and balance-sheet strength
Debt / equity
2.21x
Current ratio
1.42x
Quick ratio
0.60x
Total debt
$4.04B
Total cash
$68.20M
Growth
How the business has been compounding
Revenue TTM
$24.88B
Revenue 5Y CAGR
17.9%
EPS TTM
2.08
EPS 5Y CAGR
-33.1%
Cash flow
How much cash the business throws off
Operating CF TTM
$942.90M
Free CF TTM
$540.20M
FCF margin
2.2%
Dividend
Shareholder payout
Yield
3.2%
Payout ratio
72.1%
Last ex-div date
2026-08-07