Analysis for LII
- 📈 Growth — 12/30
- 💰 Profitability — 14/20
- 🏦 Financial Health — 15/20
- 💵 Valuation — 12/20
- ⚠️ Risk — 7/10
Summary:
📈 Growth & Financial Trajectory
Over the 8 quarters (2024 Q2 to 2026 Q1), Revenues moved from about $1.451B to $1.135B, a net decline of about 22%. There were peaks near $1.50B in 2024 Q3 and 2025 Q2, but the sequence ends lower than the start. Net income fluctuated: about $239M in 2024 Q2, a peak near $274M in 2025 Q3, then $117M in 2026 Q1. The trajectory shows volatility but no sustained growth; the overall trend is down modestly.
💰 Margins & Cash Flow
Gross margins sit in the low- to mid-30s; one quarter shows ~48% due to mix. Operating margins range roughly 10–23%. Net cash from operating activities has been positive in several quarters, with 2025 Q4 ~ $332M and 2026 Q1 ~ $16M. Investing cash flow is negative in most periods, reflecting capex. Overall, cash generation is solid but margins are cyclical.
🛡️ Balance Sheet & Liquidity
Current assets around $1.8–2.0B and current liabilities around $1.1–1.3B, indicating modest liquidity headroom. Equity near $0.85–1.35B; total liabilities are higher. Long-term debt appears non-trivial in later quarters, implying leverage risk but not excessive given assets.
⚠️ Key Drivers & Risks
- Drivers: HVAC end-market demand and installed-base upgrades
- Risks: revenue cyclicality and margin compression; sensitivity to capex and debt levels