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US Foods Holding (USFD)
NYSE:USFD
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US Foods Holding
(NYSE:USFD)
79Outperform
Positive Factors
Earnings Performance
Lower operating expenses led to an earnings beat, indicating effective cost management.
Market Position
USFD is on track to hit impressive financial targets, indicating strong momentum and improvement.
Self-Help Strategy
USFD is executing well on its self-help strategy and is positioned to continue taking share in an uncertain demand environment.
Negative Factors
Case Volume Growth
Case growth outlook for 2025 is below the long-term target, largely due to a weaker macro environment.
Sales Performance
Total org. case vol. 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
$14.92B
Dividend YieldN/A
Average Volume (3M)2.53M
Price to Earnings (P/E)32.1
Beta (1Y)0.86
Revenue Growth6.41%
EPS Growth-2.01%
CountryUS
Employees30,000
SectorConsumer Defensive
Sector Strength86
IndustryFood Distribution
Share Statistics
EPS (TTM)2.02
Shares Outstanding230,378,980
10 Day Avg. Volume2,261,788
30 Day Avg. Volume2,529,751
Financial Highlights & Ratios
PEG Ratio1.10
Price to Book (P/B)N/A
Price to Sales (P/S)0.39
Price to Cash Flow (P/CF)13.10
P/FCF Ratio17.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$80.00Price Target Upside27.65% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering11
US Foods Holding Business Overview & Revenue Model
Company DescriptionUS Foods Holding Corp., through its subsidiary, US Foods, Inc., markets and distributes fresh, frozen, and dry food and non-food products to foodservice customers in the United States. The company's customers include independently owned single and multi-unit restaurants, regional concepts, national restaurant chains, hospitals, nursing homes, hotels and motels, country clubs, government and military organizations, colleges and universities, and retail locations. As of July 06, 2022, it operated 70 broadline facilities; and 80 cash and carry locations. The company was formerly known as USF Holding Corp. and changed its name to US Foods Holding Corp. in February 2016. US Foods Holding Corp. was incorporated in 2007 and is headquartered in Rosemont, Illinois.
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 and stable cash flow generation. Profit margins are improving, though there is room for enhancing net profitability. The balance sheet is solid, but the company must manage its debt levels to mitigate potential risks. Overall, the company is well-positioned in the Retailers - Staples industry with a positive financial outlook.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
62.67
Price Trends
67.52
Negative
68.06
Negative
63.02
Negative
Market Momentum
-1.01
Negative
45.97
Neutral
76.93
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 62.67 is below the 20-day moving average (MA) of 64.46, below the 50-day MA of 67.52, and below the 200-day MA of 63.02, indicating a bearish trend. The MACD of -1.01 indicates Negative momentum. The RSI at 45.97 is Neutral, neither overbought nor oversold. The STOCH value of 76.93 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 |
|---|---|---|---|---|---|---|---|
79 Outperform | $14.92B | 32.14 | 10.65% | ― | 6.41% | -2.01% | |
74 Outperform | $34.77B | 18.26 | 87.49% | 2.86% | 3.95% | -5.04% | |
71 Outperform | $2.15B | 39.67 | 11.18% | ― | 10.50% | 59.18% | |
71 Outperform | $12.20B | 30.41 | 9.54% | ― | 3.85% | -9.74% | |
63 Neutral | $649.85M | 2,206.90 | 0.04% | 4.54% | -2.66% | 8.18% | |
63 Neutral | $20.41B | 13.98 | -16.01% | 3.26% | 1.30% | 5.01% | |
55 Neutral | $1.52B | ― | -4.94% | ― | 4.73% | 29.70% |
* Consumer Defensive Sector Average
Performance Comparison
USFD
US Foods Holding
62.67
12.10
23.93%
SPTN
SpartanNash Co
19.46
1.54
8.59%
SYY
Sysco
70.43
-2.77
-3.78%
CHEF
The Chefs' Warehouse
53.26
19.50
57.76%
UNFI
United Natural Foods
24.21
14.31
144.55%
PFGC
Performance Food Group
75.48
6.26
9.04%
US Foods Holding Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: -10.36% | 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.