2Y annualized return is
negative
at -6.8% per year
SW has met or exceeded earnings expectations in
few
recent quarters (2/5)
Attractive Price-to-Sales Ratio
Decent Gross Profit Margin
Low Debt Levels
Good Current Ratio
🏢 Strong Competitive Position
👥 Experienced Management Team
🚀 Growth Opportunities Identified
🧩 Innovative Solutions
High Price-to-Earnings Ratio
High Price-to-Free Cash Flow Ratio
Low Net Profit Margin
Weak Return on Equity
Low Quick Ratio
High Dividend Payout Ratio
⚖️ Streamlining Workforce
🌍 Market Volatility Risks
Overall, Smurfit Westrock exhibits strong business quality with a well-established market position and experienced management. However, it faces challenges related to workforce adjustments and market volatility. The company appears well-positioned for future growth through identified efficiencies and innovation.
Analysis Date: February 12, 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.
Smurfit Westrock Plc is a company that makes packaging products from paper. They create things like cardboard boxes and other types of paper containers that are used to package food, drinks, and other goods. They sell these products to businesses around the world, helping them safely transport and display their items. Founded in 1934 and based in Dublin, Ireland, Smurfit Westrock focuses on making packaging that meets the needs of various industries, including food and retail.
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
$4.27
Current Market Price: $38.51
IV/P Ratio: 0.11x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
-801.0%
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 SW
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (109.59)
P/B ratio ≤ 1.5 (1.10)
Current ratio ≥ 2.0 (1.37x)
Long-term debt < Net current assets (0.00x)
Margin of safety (-801.0%)
SW 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
1.97%
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
20.38%
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
0.73%
Higher values indicate better overall profitability
TTM (as of 2025-04-30)
A gross profit margin of 20.38% indicates that the company retains a reasonable amount of revenue after accounting for the cost of goods sold, which is a positive sign for profitability.
With a net profit margin of only 1.37%, the company has limited profitability after all expenses, which may raise concerns about its overall earning capacity.
The return on equity of 3.71% indicates that the company is not effectively generating profit from its shareholders' equity, which is a significant concern for investors.
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
0.06x
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
1.37x
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
The debt-to-equity ratio of 0.061 and debt-to-assets ratio of 0.024 signify that the company maintains a strong balance sheet with minimal debt, reducing financial risk.
A current ratio of 1.37 indicates that the company has sufficient short-term assets to cover its short-term liabilities, which reflects strong liquidity.
The quick ratio of 0.89 suggests potential liquidity issues, as it indicates the company may not have enough liquid assets to cover its current liabilities without relying on inventory.
The dividend payout ratio of 150.86% indicates that the company pays out more in dividends than it earns, which is unsustainable in the long run and may threaten future dividend payments.
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
EPS
Smurfit Westrock has established itself as a leading player in sustainable packaging with a diverse product portfolio and a significant global footprint. The company operates over 500 converting facilities and 62 mills, providing it with scale and operational efficiency.
The leadership team is described as stable and experienced, having successfully navigated various challenges while improving key metrics like EBITDA margin and return on capital employed (ROCE). This strong management foundation is crucial for sustained performance.
The company has undergone significant workforce reductions, with over 1,000 people leaving the company. This could impact morale and operational continuity in the short term as the company adjusts to its new structure.
The company has identified over $400 million in operational and commercial improvement opportunities, indicating a focus on efficiency and profitability. This includes potential cost takeouts and improved pricing strategies.
Smurfit Westrock is committed to innovation, with over 2,000 designers creating unique products daily. This innovation drive positions the company to meet evolving customer needs and market demands effectively.
The company operates in regions with economic volatility, such as Latin America, which could pose risks to consistent growth. Additionally, tariff uncertainties could impact operations and customer demand.