Lowe's Companies Inc (LOW) stock analysis
Lowe's Companies Inc (LOW) clears 4 of this site's 8 mechanical value filters, 6 of 8 Buffett-style checks and 2 of 5 Lynch-style checks. At $204.37 it trades 4.4% below this site's neutral DCF value (a margin of safety of +4.4%). Its earnings quality rates Mixed and it returns +2.3% to shareholders net of dilution. Figures are as of October 23, 2026, from SEC filings and market data refreshed weekly; this is educational analysis, not investment advice.
Data as of October 23, 2026. Refreshed weekly from SEC filings and market data.
What does Lowe's do?
Lowe's is the second-largest US home-improvement chain, selling tools, appliances and building materials to homeowners and professional contractors in roughly 1,700 stores and online.
What stands out about Lowe's?
- The share price implies 6.9% yearly growth. At $204.37, LOW's free cash flow of $12.53 per share would have to grow 6.9% a year, fading to 2.5% by year 10, for this site's DCF (10% discount rate) to match the price. This site's baseline starts at 8%, so the price asks for less growth than the baseline. Change the assumptions.
- Misses 2 of the 8 value filters. It fails PEG Ratio < 1.5 (4.09) and Price/Book < 8 (256.67); the other 4 pass and 2 were not evaluated. See every filter.
- Strongest against peers: return on equity. At 265% (peer median 45%) it ranks 2nd of 21 among retail stocks this site tracks. See the ranking.
- Weakest against peers: debt / equity. At 52.23 (peer median 0.84) it ranks 21st of 21 among retail stocks this site tracks. See the ranking.
- Balance sheet in the distress zone. Its Altman Z″-Score is 0.63; below 1.1 is the distress zone, 1.1 to 2.6 the grey zone. See the Altman Z″-Score list.
How has Lowe's' share price moved?
The interactive price chart needs JavaScript.
Is Lowe's undervalued? The value diligence check
Every value-investing signal this site computes for this stock, gathered in one place: the same real numbers from the tools below, not a new score.
- Margin of safety (DCF) +4.4%
- P/E vs. its own history 17.2x · near the cheap end Real range: 16.2x–22.5x over 5 years (net income per diluted share from each fiscal year's 10-K, paired with the real closing price at that fiscal year-end).
- Wall St. analyst rating Buy · 3.95/5 40 analysts this month: 11 strong buy, 17 buy, 11 hold, 1 sell, 0 strong sell (Finnhub). Up from 3.93 last month.
- Altman Z″-Score (bankruptcy risk) 0.63 · Distress zone
- Earnings quality (is the profit real?) Mixed · 1 flag Beneish M-score 1.50 (above the −1.78 line), mostly from receivables growing faster than sales · accruals −6.6% of assets · 129% of profit arrived as cash · stock comp 0.3% of revenue · share count −2.1% a year. From the latest 10-K (year to Jan 2026) - see the Earnings Quality Screener for how each check is scored.
- Shareholder yield (cash back to owners) +2.3% net Latest fiscal year (2026): dividends 2.3% + buybacks 0.2% − stock comp 0.2%, as a share of today's market cap. Over 14 years its split-adjusted share count fell 56%. See Shareholder Yield Leaders.
- Capital needed to grow (See's test) $0.63 per $1 of new profit · See's-like Operating profit $5.5B → $11B, capital needed $21B → $25B, 2017–2026 (3-year averages); return on capital now 44% before tax. Buffett's See's Candies needed $0.42 per $1 of new profit, FlightSafety $3.20, a typical grower about $5. See Capital-Light Compounders.
- PEG (growth at a reasonable price) 4.09 · Well above fair P/E 17.2× ÷ 4.2% a year of growth behind it. 391st lowest of 447 stocks with a usable PEG. Lynch's fair value is a PEG of 1; a very high PEG usually means almost no growth, a very low one a profit spike. See PEG Ratio Ranking.
- Compounder lenses (4) 1 of 4 · misses capital-light, real profit, price Capital-light growth: not cleared (profit grew 2.0×, under 2×); Profit is real: not cleared (1 earnings-quality flag); Cash to owners: cleared; Fair price (PEG): not cleared (PEG 4.09, over 1.5). See Compounders at a Fair Price, which also lets you move the PEG bar.
- Value trap check Clear
- Munger's Inversion Check 1 flag
- Standing vs. sector peers 5 of 7 measures above the median Compared with the 20 other retail stocks this site tracks: 3 in the top third, 1 in the bottom third.
- Dividend payout sustainability 1/6 flags
How does Lowe's compare with its peers?
5 of 7 measures sit above the median of the 20 other retail stocks tracked here, 3 in the top third and 1 in the bottom third.
- P/E ratiolower is cheaper · peer median 23.2× 17.2× ✓5th of 21
- Free-cash-flow yieldhigher is cheaper · peer median 4.4% 6.1% ✓5th of 21
- Return on equityhigher is better · peer median 45% 265% ✓2nd of 21
- Net marginhigher is better · peer median 7.3% 7.3% –11th of 21
- Revenue growthhigher is better, year on year · peer median 7.7% 8.2% –10th of 21
- Debt / equitylower is safer · peer median 0.84 52.23 ✕21st of 21
- Dividend yieldamong dividend payers · peer median 1.77% 2.36% –6th of 15
Peers are the stocks this site tracks in the same sector group, not every listed competitor. The bar runs from the weakest peer (left) to the strongest (right); the tick is the middle. Measures that don't apply to a sector (cash-flow yield for banks, debt for financials) are left out.
What would Buffett & Lynch say?
Buffett's checklist is built around durable, profitable businesses bought at sensible prices, and LOW doesn't clear enough of it yet. In its favor: LOW is currently earning a strong return on shareholders' equity, and has kept that profitability up over five years, not just this year, has grown earnings per share at a solid clip over five years, earns many times its interest expense, so debt service isn't a worry, is trading below what a conservative discounted-cash-flow estimate says it's worth - his own "price is what you pay, value is what you get" test, not a fixed multiple ceiling, and trades at a reasonable multiple of owner earnings, his own term for the real cash a business could pay out. Where it comes up short: LOW carries more debt relative to equity than he typically tolerates, and runs thinner pretax margins than he'd like to see.
- ROE (TTM) > 11% ✓
- ROE (5yr avg) > 11% ✓
- Debt/Equity < 0.5 ✕
- Pretax margin > 15% ✕
- EPS growth (5yr) > 7% ✓
- Interest coverage > 5x ✓
- Trading below intrinsic value (DCF) ✓
- Price vs. owner earnings < 25x ✓
- Bonus: returning capital via buybacks FY2026
Lynch looked for growth stories that weren't overpriced for that growth, and LOW falls short of his bar. In its favor: LOW is cheap enough for a business with limited growth ahead of it, and converts earnings into real cash at a reasonable price. Where it comes up short: LOW doesn't pay much of a dividend, which is the main reason to own a slow grower in the first place, isn't even growing at the modest pace he'd expect from a slow grower, and carries more debt than he liked to see, even allowing for the extra room a large, stable business gets.
- Dividend yield > 2.5% ✕
- EPS growth 0%-10% ✕
- Debt/Equity < 0.6 ✕
- P/E < 20 ✓
- Price/FCF < 25 ✓
Quantitative approximations of each investor's documented approach, not endorsed by either investor or their estates - commentary, not this site's actual ranking criteria. Buffett never published a numeric checklist: only 2 of his 8 checks here trace to his own documented concepts ("owner earnings," from his 1986 shareholder letter, and "price is what you pay, value is what you get," his case against fixed P/E/P/B ceilings) - the other 6 (ROE, debt, margins, growth, interest coverage) use commonly-cited thresholds that are not numbers he himself published. The 8 hard filters below (plus the Munger check and Graham margin of safety) are this site's real, mechanical screen and are computed completely independently of the checklists above.
Berkshire Hathaway's own filing
Which of the 8 value filters does Lowe's pass?
- Market Cap > $25B $114.2B
- Trailing P/E < 25 17.19
- PEG Ratio < 1.5 4.09
- Price/Book < 8 256.67
- Price/Sales < 7 1.26
- EPS Growth YoY > -5% +0.0%
- vs 50-day MA (±12%) Not evaluated †
- vs 200-day MA (±12%) Not evaluated †
What is Lowe's' margin of safety?
+15% on 2026-10-07 → +4% on 2026-10-23 (5 weekly readings).
Where is Lowe's in its 52-week range?
What is the short interest in Lowe's?
10,398,099 shares short as of 2026-09-30 (FINRA settlement date). Reported twice a month, so this only changes roughly every two weeks, not daily.
What could go wrong with Lowe's? Munger's inversion check
"Invert, always invert." Instead of reasons to buy, these are reasons to hesitate, not a verdict, and not everything worth knowing about a business.
- Margin of safety, even in the bull case +44%
- Short interest under 5% of float 1.9%
- Passes most of the 6 fundamental filters 4/6 passed
- Price run-up backed by value, not just momentum +13% off 52wk low
- Debt/equity stable since 2017 2.36 → 15.16
Doesn't cover circle of competence, management quality, or accounting concerns: those need judgment, not data.
How much have Lowe's shareholders gained per year?
Earnings growth per share plus dividend.
An earnings-based proxy, not a stock-price total return - it doesn't capture multiple expansion/contraction or reinvested dividends. EPS from LOW's own 10-K filings; dividend yield is the current trailing yield on today's price, from the same weekly fetch as the rest of this site.
What do Lowe's' 10-year financials show?
From LOW's own 10-K filings (SEC EDGAR): up to the last 10 fiscal years. Press any year's bars for the exact figures.
Frequently asked questions about Lowe's
What kind of company is Lowe's?
Lowe's is the second-largest US home-improvement chain, selling tools, appliances and building materials to homeowners and professional contractors in roughly 1,700 stores and online. This site groups it with Retail stocks.
Is Lowe's trading above or below its DCF value?
At $204.37, LOW trades 4.4% below this site's neutral DCF value of $213.88 per share, a margin of safety of +4.4%. That DCF projects free cash flow for 10 years, with growth starting at 8% and fading to 2.5%, discounted at 10%; it is one set of assumptions, not a forecast. Test your own in the Intrinsic Value Calculator.
How many of this site's 8 value filters does Lowe's pass?
LOW passes 4 of 8. It passes Market Cap > $25B ($114.2B), Trailing P/E < 25 (17.19), Price/Sales < 7 (1.26) and EPS Growth YoY > -5% (+0.0%). It misses PEG Ratio < 1.5 (4.09) and Price/Book < 8 (256.67). vs 50-day MA (±12%) and vs 200-day MA (±12%) were not evaluated, because the moving-average checks only run on stocks that clear the fundamentals first. The 8-filter list shows every stock that passes all of them.
Are Lowe's's reported earnings reliable?
This site's earnings-quality check rates LOW Mixed · 1 flag. Beneish M-score 1.50 (above the −1.78 line), mostly from receivables growing faster than sales · accruals −6.6% of assets · 129% of profit arrived as cash · stock comp 0.3% of revenue · share count −2.1% a year. From the latest 10-K (year to Jan 2026). Concerns: the Beneish M-score (flagged). The five checks are the Beneish M-score (manipulation risk), accruals, cash conversion, stock-based compensation and share dilution; the Earnings Quality Screener shows how each is graded.
How much cash does Lowe's return to shareholders?
LOW's net shareholder yield is +2.3%: the cash it returns through dividends and buybacks, minus stock-based compensation, as a share of its market value. Latest fiscal year (2026): dividends 2.3% + buybacks 0.2% − stock comp 0.2%, as a share of today's market cap. Over 14 years its split-adjusted share count fell 56%. Its trailing dividend yield is 2.36%, paid out of 38% of its free cash flow; the dividend-sustainability check raises 1 of 6 flags (high leverage). See Shareholder Yield Leaders and the Sustainable Dividend Screener.
How risky is Lowe's's balance sheet?
LOW's Altman Z″-Score is 0.63, which falls in the distress zone. Altman's own thresholds are above 2.6 for the safe zone, 1.1 to 2.6 for the grey zone and below 1.1 for the distress zone; the score blends working capital, retained earnings, operating profit and equity against liabilities. Its debt-to-equity ratio is 52.23, against a sector median of 0.84. See the Altman Z″-Score list.
Where do these numbers come from?
- Financial statements: Lowe's's 10-K annual report for the year ended Jan 30, 2026, filed Mar 23, 2026 (filing index). Every earlier year in the 10-year financials comes from the company's older 10-K filings, all listed on SEC EDGAR.
- Prices and market data: quotes, P/E and analyst ratings from Finnhub; daily price history and the 52-week range from Twelve Data, both refreshed weekly. Short interest comes from FINRA, reported twice a month.
- How to check a figure: click any number in the card above to see its exact source, and read the Editorial Standards for every rule behind the checks.
About this Lowe's Companies Inc analysis
This page shows every value-investing check the site runs on Lowe's Companies Inc (LOW) in one place: the 8 mechanical filters, the Buffett and Lynch checklists, a margin of safety from a disclosed DCF, earnings quality, shareholder yield and how it ranks against its sector peers. The numbers come from SEC filings and public market data, refreshed weekly, and the same rules apply to every stock on the stock list. See Editorial Standards for the sources and the rules, or run your own filters in the stock screener.