Moderate Price-to-Earnings Ratio
Attractive Price-to-Sales Ratio
Strong Gross Profit Margin
Positive Return on Equity
Manageable Debt Levels
Interest Coverage Ratio
🏆 Strong Market Position
📈 Efficient Cost Management
💡 Innovation and Brand Investment
🚀 Growth Outlook for 2025
🔍 Focus on Innovation
🌟 Strong Marketing Strategy
High Price-to-Free Cash Flow Ratio
Elevated EV/EBITDA Ratio
Low Net Profit Margin
High Operating Profit Margin
Low Current and Quick Ratios
Low Cash Ratio
📉 Declining Sales Growth
🌏 Disruption in Asia Pacific
⚠️ Challenges in Cold and Flu Products
🔮 Economic Uncertainty
Kenvue demonstrates a strong business model with significant market share and effective cost management, but it faces challenges in sales growth and external market conditions. Looking ahead, the company has promising growth prospects driven by innovation and strong marketing strategies, despite some anticipated headwinds.
Analysis Date: February 6, 2025
Last Updated: March 12, 2025
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
$20.71
Current Market Price: $22.29
IV/P Ratio: 0.93x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
-8.0%
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 KVUE
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (41.52)
P/B ratio ≤ 1.5 (4.42)
Current ratio ≥ 2.0 (0.96x)
Long-term debt < Net current assets (-33.32x)
Margin of safety (-8.0%)
KVUE does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
The gross profit margin of 57.91% indicates that KVUE retains a significant portion of revenue after accounting for the cost of goods sold, suggesting efficient production or strong pricing power.
The return on equity (ROE) of 10.02% indicates that the company is effectively using shareholders' equity to generate profit, which is a positive sign for investors.
A net profit margin of 6.66% indicates that only a small portion of revenue is converted into profit, which may suggest operational inefficiencies or high costs relative to revenue.
While the operating profit margin of 16.75% is decent, it may not be sufficient to support the higher valuations suggested by other metrics.
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
10.02%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-16)
Return on Assets (ROA)
Measures how efficiently a company uses its assets to generate profits
1.14%
Higher values indicate better asset utilization
TTM (as of 2025-04-16)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
57.91%
Higher values indicate better efficiency in production
TTM (as of 2025-04-16)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
6.66%
Higher values indicate better overall profitability
TTM (as of 2025-04-16)
The debt-to-equity ratio of 0.90 and debt-to-assets ratio of 34.06% indicate that KVUE has a manageable level of debt compared to its equity and total assets, showing a prudent approach to financing.
An interest coverage ratio of 6.01 indicates that the company earns enough to cover its interest obligations, which is a good sign of financial health.
The current ratio of 0.96 and quick ratio of 0.69 suggest that KVUE may struggle to cover its short-term liabilities, indicating potential liquidity concerns.
The cash ratio of 0.19 indicates that the company has limited cash available to cover its short-term obligations, which could be a red flag 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
0.90x
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
0.96x
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
Kenvue has established itself as a leader in multiple segments, with nearly 80% of its self-care segment gaining market share, including key brands such as Tylenol, Zyrtec, and Nicorette.
The company expanded its adjusted gross margin by 200 basis points year-over-year to 60.4%, indicating strong operational efficiencies and cost-cutting measures that have improved profitability.
Kenvue has increased its brand investment by about 20%, enabling stronger marketing campaigns and new product innovations, which are expected to drive future growth.
The organic sales growth of 1.5% for the year was below expectations, primarily due to lower-than-expected incidences of cough, cold, and flu impacting sales in key product lines.
The company faced a decline in customer orders in Asia Pacific, particularly China, due to disruptions in their distribution network, which impacted overall performance.
Kenvue expects organic sales growth of 2% to 4% in 2025, with plans to accelerate volume growth and leverage the benefits of structural changes implemented in 2024.
The company plans to launch 40% more innovations in 2025 compared to 2024, which will enhance its product portfolio and market competitiveness.
Kenvue is increasing its advertising budget and enhancing its marketing strategies, including social media influencer campaigns, which are expected to improve brand visibility and consumer engagement.
The company anticipates headwinds in the first half of 2025 due to destocking from a weak pediatric pain season, which may impact organic sales growth.
Kenvue is entering 2025 with challenges such as economic uncertainty and geopolitical tensions, which could affect consumer behavior and spending.