Floor & Decor Holdings, Inc.'s (NYSE:FND) Stock Has Shown Weakness Lately But Financial Prospects Look Decent: Is The Market Wrong?

Simply Wall St.11-20

With its stock down 6.5% over the past three months, it is easy to disregard Floor & Decor Holdings (NYSE:FND). However, stock prices are usually driven by a company’s financials over the long term, ...

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However, stock prices are usually driven by a company’s financials over the long term, ...</p>\n\n<a href=\"https://finance.yahoo.com/news/floor-decor-holdings-inc-nyse-102714507.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"FND","symbol_name":"Floor & Decor Holdings Inc.","start_time":0,"source_url":"https://finance.yahoo.com/news/floor-decor-holdings-inc-nyse-102714507.html","article_id":"2484196466","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/ShqGpf2BYHtUllDu_nMHew--~B/aD00MzI7dz0xMTk0O2FwcGlkPXl0YWNoeW9u/https://media.zenfs.com/en/simply_wall_st__316/4ec940bb6b8d63b30bf30e7b89f8e013"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2484196466","pubTimestamp":1732098434,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"With its stock down 6.5% over the past three months, it is easy to disregard Floor & Decor Holdings . However, stock prices are usually driven by a company’s financials over the long term, which in this case look pretty respectable. In this article, we decided to focus on Floor & Decor Holdings'  ROE.ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. In short, ROE shows the profit each dollar generates with respect to its shareholder investments.Check out our latest analysis for Floor & Decor Holdings. Return on equity can be calculated by using the formula:. A Side By Side comparison of Floor & Decor Holdings' Earnings Growth And 9.3% ROE. Floor & Decor Holdings doesn't pay any regular dividends, meaning that all of its profits are being rein","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"FND":"Floor & Decor Holdings Inc.","BK4083":"家庭装潢零售","NYSE":"纽交所"},"translate_title":"地板装饰控股公司（纽约证券交易所代码：FND）的股票最近表现疲软，但财务前景看起来不错：市场错了吗？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"FND":1,"NYSE":1},"content_text":"With its stock down 6.5% over the past three months, it is easy to disregard Floor & Decor Holdings (NYSE:FND). However, stock prices are usually driven by a company’s financials over the long term, which in this case look pretty respectable. In this article, we decided to focus on Floor & Decor Holdings'  ROE. \n ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. In short, ROE shows the profit each dollar generates with respect to its shareholder investments. \n Check out our latest analysis for Floor & Decor Holdings \n How Do You Calculate Return On Equity? \n Return on equity can be calculated by using the formula: \n Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity \nSo, based on the above formula, the ROE for Floor & Decor Holdings is:\n9.3% = US$195m ÷ US$2.1b (Based on the trailing twelve months to September 2024).\n The 'return' refers to a company's earnings over the last year. So, this means that for every $1 of its shareholder's investments, the company generates a profit of $0.09. \n Why Is ROE Important For Earnings Growth? \n So far, we've learned that ROE is a measure of a company's profitability. Based on how much of its profits the company chooses to reinvest or \"retain\", we are then able to evaluate a company's future ability to generate profits. Assuming everything else remains unchanged, the higher the ROE and profit retention, the higher the growth rate of a company compared to companies that don't necessarily bear these characteristics. \n A Side By Side comparison of Floor & Decor Holdings' Earnings Growth And 9.3% ROE \n At first glance, Floor & Decor Holdings' ROE doesn't look very promising. Next, when compared to the average industry ROE of 19%, the company's ROE leaves us feeling even less enthusiastic. Although, we can see that Floor & Decor Holdings saw a modest net income growth of 8.4% over the past five years. So, there might be other aspects that are positively influencing the company's earnings growth. Such as - high earnings retention or an efficient management in place. \n As a next step, we compared Floor & Decor Holdings' net income growth with the industry and were disappointed to see that the company's growth is lower than the industry average growth of 17% in the same period. \n\n\n\n  NYSE:FND Past Earnings Growth November 20th 2024\n \n\n Earnings growth is a huge factor in stock valuation. It’s important for an investor to know whether the market has priced in the company's expected earnings growth (or decline). Doing so will help them establish if the stock's future looks promising or ominous. Has the market priced in the future outlook for FND? You can find out in our latest intrinsic value infographic research report.  \n Is Floor & Decor Holdings Making Efficient Use Of Its Profits? \n Floor & Decor Holdings doesn't pay any regular dividends, meaning that all of its profits are being reinvested in the business, which explains the fair bit of earnings growth the company has seen. \n Conclusion \n Overall, we feel that Floor & Decor Holdings certainly does have some positive factors to consider. Specifically, its fairly high earnings growth number, which no doubt was backed by the company's high earnings retention. Still, the low ROE means that all that reinvestment is not reaping a lot of benefit to the investors. Having said that, looking at the current analyst estimates, we found that the company's earnings are expected to gain momentum. Are these analysts expectations based on the broad expectations for the industry, or on the company's fundamentals? Click here to be taken to our analyst's forecasts page for the company. \nHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. 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