10Y annualized return is
negative
at -4.7% per year
MHK has met or exceeded earnings expectations in
most
recent quarters (9/10)
Low Price-to-Earnings Ratio
Attractive Price-to-Book Ratio
Healthy Operating Profit Margin
Positive Return on Equity
Strong Liquidity Ratios
Low Debt Levels
🏆 Strong Market Position
🔧 Operational Improvements
🌱 Innovation Focus
📊 Recovery Potential
Low Dividend Yield
Moderate Price-to-Sales Ratio
Low Net Profit Margin
Cash Ratio Below 1
📉 Pricing Pressure
🔒 Market Uncertainty
🌀 Foreign Exchange Exposure
Mohawk Industries demonstrates a solid business model with strong market positioning and operational efficiencies. However, it is currently grappling with pricing pressures and market uncertainties due to a cyclical downturn in the housing industry. Future growth prospects hinge on innovation and a potential recovery in the market.
Analysis Date: February 7, 2025
Last Updated: March 12, 2025
Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
Mohawk Industries, Inc. is a company that makes and sells flooring products for homes and businesses. They offer a wide variety of options, including carpets, tiles, and hardwood floors. Mohawk has different brands for their products, like Karastan and Pergo, and they sell these products in the United States and around the world. Essentially, if you're looking to update or build a space, Mohawk provides the flooring materials you might need.
Streams of revenue
Geographic Distribution
Core Products
Business Type
Business to Business
Competitive Advantages
Key Business Risks
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$103.03
Current Market Price: $105.29
IV/P Ratio: 0.98x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
-2.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for MHK
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (12.82)
P/B ratio ≤ 1.5 (0.88)
Current ratio ≥ 2.0 (2.06x)
Long-term debt < Net current assets (0.10x)
Margin of safety (-2.0%)
MHK does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
6.75%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-30)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
25.19%
Higher values indicate better efficiency in production
TTM (as of 2025-04-30)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
4.78%
Higher values indicate better overall profitability
TTM (as of 2025-04-30)
MHK's operating profit margin of 6.88% indicates a solid level of profitability from operations, reflecting effective cost management.
With a return on equity (ROE) of 6.75%, MHK demonstrates a reasonable level of profitability in relation to shareholders' equity.
The net profit margin of 4.78% is relatively modest and indicates that a significant portion of revenue is consumed by expenses.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.13x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
2.06x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
MHK's current ratio of 2.06 and quick ratio of 1.12 indicate strong liquidity, suggesting that the company can comfortably cover its short-term obligations.
The debt-to-equity ratio of 0.13 and debt-to-assets ratio of 0.07 reflect a conservative capital structure, indicating that MHK is not over-leveraged.
The cash ratio of 0.25 suggests that while MHK has liquidity, it may not have sufficient cash readily available to cover all short-term liabilities.
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
EPS
Mohawk Industries is the largest flooring manufacturer globally, with a strong presence across four continents. The company benefits from a diverse portfolio that includes residential and commercial products, ensuring it can cater to various market demands.
The company has undertaken significant restructuring initiatives, resulting in cost savings projected at $285 million by 2026. This focus on operational efficiency enhances profitability and positions the company well for future growth.
The company experiences ongoing pricing pressures due to heightened competition and rising input costs. This is reflected in reduced operating income margins and challenges in passing on costs to consumers.
Mohawk is committed to product innovation, with plans to invest significantly in new product developments and marketing initiatives aimed at enhancing the product mix.
The flooring industry is expected to rebound after prolonged downturns, and Mohawk is well-positioned to benefit from this recovery due to its strong market presence and operational efficiencies.
The company is currently facing a cyclical downturn in the housing market, which has led to lower consumer confidence and reduced discretionary spending.
A strengthening U.S. dollar is negatively impacting translated results, particularly affecting international sales and overall profitability.