One-glance verdict
Undervalued
$20.52 our estimate vs market $10.37
Wall Street consensus: $13.00 (-36.6% lower than our fair-value estimate)
49% below our estimate, below the bear case
Fundamentals snapshot
LSB Industries, Inc.
LXU · NYQ · Basic Materials · Chemicals
Current price
$10.37
52-week range
$8.12 - $17.22
Market cap
$746.61M
Balance sheet
Stretched
1.87x Concerning
Net debt $271.67M. 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 7.0% last year.
- Reward Returns 7.1% on equity, ahead of 33% of its peers.
- Risk Operating margin compressed from 34.2% to -1.6% over 3 years.
- Risk Stock trades 12.9% above its 5-year average P/E.
What this company does
LSB Industries, Inc.
LSB Industries makes and sells chemicals used for farming, like ammonia, and for industries, such as acids. Their money mainly comes from selling these chemicals to farmers and industrial customers. This matters because their products are essential for growing food and for various manufacturing processes.
How the company got here
LSB Industries was founded in 1968 by Jack Golsen, initially as a holding company for various manufacturing interests that included bearings and climate control products. Over the decades, the company strategically narrowed its focus, divesting its climate control business in 2016 to concentrate solely on chemical production. This shift transformed LSB Industries into a pure-play chemical company, with its modern identity rooted in the manufacturing of nitrogen-based chemicals for agriculture and industrial markets. The company has since focused on improving its operational efficiency and expanding its presence in less seasonal industrial and mining sectors.
What it actually does
LSB Industries manufactures and sells nitrogen-based chemical products. These chemicals are essential components used in a wide range of applications, from helping crops grow in agriculture to enabling various industrial processes and supporting mining operations. The company's core products include ammonia, nitric acid, and ammonium nitrate, which are produced at its manufacturing facilities located in the United States. These products are then sold to a diverse customer base across North America.
Chemicals
LSB Industries' primary business is the production and sale of nitrogen-based chemicals. These chemicals serve three main markets: agriculture, industrial applications, and mining. In agriculture, these products are used as fertilizers to help grow food crops, feed for livestock, and other forage production. For industrial uses, LSB's chemicals like nitric acid and sulfuric acid are vital in manufacturing processes for products ranging from clothing to semiconductors. In the mining sector, industrial-grade ammonium nitrate is a key component in explosives used for extracting minerals like coal, copper, and gold. The company's operations are centered around converting natural gas into ammonia and then further processing it into these downstream products.
What management is betting on now
LSB Industries' current strategy focuses on three key areas to drive future growth and profitability. First, they are prioritizing improvements in plant reliability to minimize unexpected downtime and ensure consistent production. Second, the company aims to increase its exposure to the industrial and mining markets, which are generally less affected by seasonal fluctuations compared to agriculture. Finally, LSB is actively pursuing opportunities in lower-carbon ammonia production, leveraging government incentives and carbon capture technologies to develop more sustainable products and meet growing demand for environmentally friendly solutions.
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 Q3
$-13.93M
FY2024 Q4
$-24.23M
FY2025 Q1
$-14.03M
FY2025 Q2
$-315.00K
FY2025 Q3
$35.60M
FY2025 Q4
$-3.19M
FY2026 Q1
$34.82M
FY2026 Q2
$30.09M
Revenue
$168.09M
Net income
$-6.19M
Diluted EPS
-0.09
Operating cash flow
$59.36M
Free cash flow
$30.09M
Fetching…
Sources
Revenue
$169.49M
Net income
$19.68M
Diluted EPS
0.27
Operating cash flow
$51.80M
Free cash flow
$34.82M
Fetching…
Sources
Revenue
$165.05M
Net income
$16.13M
Diluted EPS
0.22
Operating cash flow
$17.95M
Free cash flow
$-3.19M
Fetching…
Sources
Revenue
$155.43M
Net income
$7.12M
Diluted EPS
0.10
Operating cash flow
$52.57M
Free cash flow
$35.60M
Fetching…
Sources
Revenue
$151.30M
Net income
$3.01M
Diluted EPS
0.04
Operating cash flow
$18.16M
Free cash flow
$-315.00K
Fetching…
Sources
Revenue
$143.43M
Net income
$-1.64M
Diluted EPS
-0.02
Operating cash flow
$6.84M
Free cash flow
$-14.03M
Fetching…
Sources
Revenue
$134.91M
Net income
$-9.15M
Diluted EPS
-0.13
Operating cash flow
$3.98M
Free cash flow
$-24.23M
Fetching…
Sources
Revenue
$109.22M
Net income
$-25.38M
Diluted EPS
-0.35
Operating cash flow
$17.11M
Free cash flow
$-13.93M
Fetching…
Sources
Is it cheap or expensive?
Fair value $20.52 vs current price $10.37
Wall Street consensus is the average analyst price target: $13.00 (-36.6% lower than our fair-value estimate).
Our most-likely fair value is $20.52 a share — about 97.9% above today's price of $10.37, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Stretched
Net debt $271.7M. Interest coverage 1.9x.
Net debt
$271.67M
Interest coverage
1.87x
LSB Industries, Inc.'s profit covers its interest bill about 1.9 times over.
Stretched
Worse cushion
Baseline
Better cushion
LXU
BASELINE
LSB Industries, Inc.
Total debt $489.65M Interest coverage 1.87x This is the baseline the peer rows are being compared against.
Total debt $574.70M Interest coverage 4.28x +129% vs LXU Carries about 2.3x more debt cushion than LXU.
Total debt $423.94M Interest coverage 7.10x +280% vs LXU Carries about 3.8x more debt cushion than LXU.
Total debt $3.24M Interest coverage 38.24x +1,947% vs LXU Carries about 20.5x more debt cushion than LXU.
Total debt $774.60M Interest coverage 1.15x -38% vs LXU Carries about 1.6x less debt cushion than LXU.
Total debt $257.70M Interest coverage 8.98x +381% vs LXU Carries about 4.8x more debt cushion than LXU.
What you should know
The case for and against LXU
3 Rewards
2 Risks
Rewards
-
Revenue grew 7.0% last year.
-
Returns 7.1% on equity, ahead of 33% of its peers.
-
Free cash flow was positive in 4/10 years.
Risks
-
Operating margin compressed from 34.2% to -1.6% over 3 years.
-
Stock trades 12.9% above its 5-year average P/E.
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)
20.74x
Forward P/E
9.73x
P/B
1.38x
P/S
1.13x
EV/EBITDA
6.76x
PEG ratio
0.42x
Profitability
How much profit each dollar creates
Gross margin
17.3%
Operating margin
-1.6%
Net margin
5.6%
ROE
7.1%
ROA
3.5%
Health
Liquidity and balance-sheet strength
Debt / equity
0.91x
Current ratio
2.43x
Quick ratio
1.90x
Total debt
$489.65M
Total cash
$217.98M
Growth
How the business has been compounding
Revenue TTM
$658.06M
Revenue 5Y CAGR
2.6%
EPS TTM
0.50
EPS 5Y CAGR
-49.8%
Cash flow
How much cash the business throws off
Operating CF TTM
$181.68M
Free CF TTM
$18.06M
FCF margin
2.7%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
1998-12-29