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Us Foods Holding Corp. (USFD)
:USFD
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US Foods Holding
(NYSE:USFD)80Outperform
Positive Factors
Earnings
Lower operating expenses led to an earnings beat, indicating effective cost management.
Stock Recommendation
Analyst recommends buying USFD stock with a price target increase to $83.
Negative Factors
Case Volume
Total org. case volume growth of 1.4% missed the bar of about 2%; more importantly, independent case volume of 1.8% missed the 3%+ bar and slowed sequentially.
US Foods Holding (USFD) vs. S&P 500 (SPY)
Market Cap
$15.39B
Dividend YieldN/A
Average Volume (3M)2.56M
Price to Earnings (P/E)32.6
Beta (1Y)1.00
Revenue Growth6.41%
EPS Growth-2.01%
CountryUS
Employees30,000
SectorConsumer Defensive
Sector Strength73
IndustryRetailers - Staples
Share Statistics
EPS (TTM)2.02
Shares Outstanding230,378,980
10 Day Avg. Volume2,532,968
30 Day Avg. Volume2,561,420
Financial Highlights & Ratios
PEG Ratio1.10
Price to Book (P/B)N/A
Price to Sales (P/S)0.41
Price to Cash Flow (P/CF)13.60
P/FCF Ratio17.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$81.15Price Target Upside23.67% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering13
US Foods Holding Business Overview & Revenue Model
Company DescriptionUS Foods Holding Corp. (USFD) is one of America's leading foodservice distributors, catering to customers across various sectors including restaurants, healthcare facilities, hospitality establishments, and educational institutions. The company offers a broad and innovative range of food and related products, including fresh, frozen, and dry food, as well as non-food items such as kitchen equipment and supplies. By leveraging its extensive distribution network and diverse product offerings, US Foods aims to provide tailored solutions and exceptional service to meet the dynamic needs of its customers across the United States.
How the Company Makes MoneyUS Foods generates revenue primarily through the sale and distribution of food and related products to a wide array of foodservice customers. The company's key revenue streams include the sale of fresh, frozen, and dry food products, which constitute the majority of its sales. In addition to food products, US Foods also offers non-food items such as disposable utensils, cleaning supplies, and kitchen equipment, contributing to its revenue diversification. The company benefits from its extensive distribution network, which allows it to efficiently deliver products to a broad customer base. Moreover, strategic partnerships and collaborations with suppliers and food manufacturers enable US Foods to offer a wide range of high-quality and innovative products, enhancing its competitive edge and customer appeal. The company's focus on customer service and operational efficiency further supports its revenue generation and market position.
US Foods Holding Financial Statement Overview
Summary
US Foods Holding exhibits a strong financial position with impressive revenue growth, improved profit margins, and stable cash flow generation. The balance sheet is solid but managing debt levels is crucial to mitigate potential risks.Income Statement
US Foods Holding has demonstrated strong revenue growth, with a 6.4% increase in total revenue from 2023 to 2024. The gross profit margin is solid at 17.3%, and the net profit margin improved slightly to 1.3%. The EBIT margin increased to 2.9%, indicating better operational efficiency. However, the net income has decreased slightly from the previous year, suggesting room for improvement in profitability.85
Very Positive
Balance Sheet
The company's debt-to-equity ratio stands at 1.09, showing a moderate level of leverage that is typical for the industry. The equity ratio is stable at 33.7%, reflecting a balanced asset financing structure. Return on equity is at 10.9%, indicating decent profitability. The financial health remains robust, although high debt levels could pose a risk if not managed carefully.78
Positive
Cash Flow
US Foods Holding has shown a consistent ability to generate cash, with an operating cash flow to net income ratio of 2.38. The free cash flow to net income ratio is 1.69, underscoring the strong cash generation relative to earnings. Free cash flow growth is modest, but the company maintains a solid cash flow position that supports its operational and financial activities.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 37.88B | 35.60B | 34.06B | 29.49B | 22.89B | Gross Profit |
| 6.53B | 6.15B | 5.49B | 4.66B | 3.72B | EBIT |
| 1.10B | 1.02B | 594.00M | 424.00M | -17.00M | EBITDA |
| 1.40B | 1.40B | 1.02B | 841.00M | 371.00M | Net Income Common Stockholders |
| 494.00M | 506.00M | 265.00M | 164.00M | -226.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 59.00M | 269.00M | 211.00M | 148.00M | 828.00M | Total Assets |
| 13.44B | 13.19B | 12.77B | 12.52B | 12.42B | Total Debt |
| 4.93B | 5.20B | 5.03B | 5.19B | 6.19B | Net Debt |
| 4.87B | 4.93B | 4.82B | 5.05B | 5.36B | Total Liabilities |
| 8.91B | 8.44B | 8.28B | 8.25B | 8.37B | Stockholders Equity |
| 4.53B | 4.75B | 4.50B | 4.27B | 4.05B |
| Cash Flow | Free Cash Flow | |||
| 833.00M | 831.00M | 500.00M | 145.00M | 224.00M | Operating Cash Flow |
| 1.17B | 1.14B | 765.00M | 419.00M | 413.00M | Investing Cash Flow |
| -552.00M | -495.00M | -255.00M | -262.00M | -1.11B | Financing Cash Flow |
| -831.00M | -587.00M | -447.00M | -837.00M | 1.43B |
US Foods Holding Technical Analysis
Negative
65.62
Price Trends
69.41
Negative
67.72
Negative
61.68
Positive
Market Momentum
-0.60
Positive
33.47
Neutral
23.67
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For USFD, the sentiment is Negative. The current price of 65.62 is below the 20-day moving average (MA) of 70.02, below the 50-day MA of 69.41, and above the 200-day MA of 61.68, indicating a neutral trend. The MACD of -0.60 indicates Positive momentum. The RSI at 33.47 is Neutral, neither overbought nor oversold. The STOCH value of 23.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for USFD.
US Foods Holding Risk Analysis
US Foods Holding disclosed 32 risk factors in its most recent earnings report. US Foods Holding reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
US Foods Holding Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $15.39B | 32.56 | 10.65% | ― | 6.41% | -2.01% | |
76 Outperform | $12.30B | 31.41 | 9.54% | ― | 3.85% | -9.74% | |
75 Outperform | $36.74B | 19.29 | 87.49% | 2.70% | 3.95% | -5.04% | |
75 Outperform | $2.38B | 43.63 | 11.18% | ― | 10.50% | 59.18% | |
72 Outperform | $222.08M | 16.59 | 6.83% | 4.12% | 4.19% | 80.37% | |
66 Neutral | $1.68B | ― | -5.66% | ― | 3.32% | -13.76% | |
63 Neutral | $20.85B | 13.27 | -10.88% | 7.48% | 1.13% | 11.50% |
* Consumer Defensive Sector Average
Performance Comparison
USFD
US Foods Holding
65.62
13.05
24.82%
SGC
Superior Group of Companies
13.81
0.29
2.14%
SYY
Sysco
76.55
-1.33
-1.71%
CHEF
The Chefs' Warehouse
56.68
20.10
54.95%
UNFI
United Natural Foods
26.91
14.99
125.76%
PFGC
Performance Food Group
77.93
2.86
3.81%
US Foods Holding Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: -6.14% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Positive
US Foods demonstrated strong financial performance with record earnings and consistent market share gains despite macroeconomic and environmental challenges. The company's strategic initiatives and cost-saving efforts have positioned it well for future growth, though some external factors have impacted immediate growth targets. The overall outlook remains positive with a strong future growth strategy in place.Highlights
Record 2024 Full Year Earnings
US Foods delivered a strong quarter resulting in record 2024 full year earnings of $1.74 billion, surpassing original commitments.
Consistent Market Share Gains
Achieved 15 consecutive quarters of share gains with independent restaurants and 17 consecutive quarters in healthcare, with independent case volume up 3.2%.
Strategic Initiatives and Savings
Executed key initiatives driving $230 million in cost savings, expanded adjusted EBITDA margin by 100 basis points to 4.6%, and achieved $120 million in operating expense savings.
Strong Cash Flow and Share Repurchases
Deployed strong cash flow through a $220 million acquisition and nearly $1 billion of share repurchases in 2024.
Positive Future Outlook
Confidence in achieving a 5% sales CAGR, 10% adjusted EBITDA CAGR, and 20% adjusted diluted EPS CAGR through 2027.
Lowlights
Macroeconomic Challenges
Chain restaurant foot traffic was down slightly less than 2% for the fourth quarter, with independent restaurant industry volume down less than 1%.
Impact of Environmental Disasters
Fourth quarter results were affected by hurricanes, storms, and wildfires, leading to a 150 to 200 basis point headwind in independent and hospitality case growth.
Challenges in Maintaining Growth Targets
Despite growth, the company faced difficulty maintaining its 5% to 8% independent case growth algorithm due to below-expected industry traffic.
Company Guidance
During the US Foods Q4 2024 earnings call, the company provided robust fiscal guidance for 2025, highlighting several key performance metrics. The company anticipates achieving a 5% sales compound annual growth rate (CAGR), a 10% adjusted EBITDA CAGR, and at least a 20% annual expansion in adjusted EBITDA margin through 2027. For 2025 specifically, US Foods projects total company net sales growth of 4% to 6%, driven by a 2% to 4% increase in total case volume, with independent restaurant case growth expected at 4% to 7%. The firm also targets adjusted EBITDA growth of 8% to 12% and adjusted diluted EPS growth of 17% to 23%. US Foods continues to focus on expanding adjusted EBITDA margin, which grew by 100 basis points to 4.6% in 2024, and aims for further margin improvements with a strong emphasis on driving profitable market share and executing self-help initiatives.US Foods Holding Corporate Events
Executive/Board Changes
US Foods Holding Expands Board with New Appointment
Neutral
Jan 10, 2025
US Foods Holding Corp. announced an expansion of its Board of Directors, appointing David W. Bullock as a new independent director. Bullock, a seasoned executive with extensive experience in financial and operational roles across various industries, is expected to bring valuable insights and governance expertise to the company’s leadership.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.