US Foods Holding Corp.
USFD
$92.21
+1.37%
US Foods Holding Corp. is a major U.S. food service distributor serving restaurants, healthcare, hospitality, and education sectors. It is defined by its extensive national distribution network and comprehensive suite of e-commerce and business solutions, positioning it as a key infrastructure player in the food supply chain.…
USFD
US Foods Holding Corp.
$92.21
Investment Opinion: Should I buy USFD Today?
Based on a synthesis of improving fundamentals, positive analyst sentiment, and a reasonable forward valuation, the objective assessment leans positive. The company's dramatic margin improvement and strong cash flow support a 'Buy' rating for investors with a medium-to-long-term horizon. However, the high trailing P/E suggests the stock is not deeply undervalued, making entry timing important. The synthesized analyst rating is Buy.
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USFD 12-Month Price Forecast
The fundamental trajectory is positive, but the stock's recent performance has likely priced in much of the near-term good news. The investment case hinges on the sustainability of margin gains to justify the valuation. The stance is neutral with a positive bias, awaiting a more attractive entry point or confirmation of continued outperformance.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on US Foods Holding Corp.'s 12-month outlook, with a consensus price target around $109.53 and implied upside of +18.8% versus the current price.
Average Target
$109.53
15 analysts
Implied Upside
+18.8%
vs. current price
Analyst Count
15
covering this stock
Price Range
$94 - $120
Analyst target range
Wall Street analyst sentiment appears broadly positive, with recent actions from seven major firms including 'Buy', 'Overweight', and 'Outperform' ratings from institutions such as Citigroup, Wells Fargo, Barclays, and BMO Capital. However, specific consensus target price and ratings distribution data are not available in the provided inputs.
Bulls vs Bears: USFD Investment Factors
USFD presents a compelling mix of strong operational improvement and financial health against a backdrop of a demanding valuation and cyclical risks. The significant year-over-year margin expansion and robust cash flow generation are major positives, but the stock's recent strong run and high trailing multiple suggest near-term upside may be limited without continued execution.
Bullish
- Strong Profitability Improvement: Q4 net income margin surged to 1.88% from 0.70% YoY, indicating effective cost management.
- Robust Free Cash Flow: TTM FCF of $959M supports financial flexibility, buybacks, and reinvestment.
- Positive Analyst Sentiment: Multiple major firms have issued Buy/Overweight ratings, signaling confidence.
- Outperforming Market: Stock up 40.96% over past year, significantly outpacing the S&P 500.
Bearish
- High Trailing P/E Ratio: Trailing P/E of 25.6 is elevated, requiring continued high earnings growth.
- Moderate Debt Load: Debt-to-equity of 1.33 presents risk if interest rates rise or earnings falter.
- Low Net Profit Margins: Industry is low-margin; net margin of ~1.7% leaves little room for error.
- Recent Price Consolidation: Stock is down 5.85% over past month and ~11% off 52-week high.
USFD Technical Analysis
The stock has demonstrated strong overall performance, with a 20.85% gain over the past six months and a 40.96% increase over the past year, significantly outperforming the broader market. In the short term, the stock is down 5.85% over the past month but remains up 19.81% over the past three months, indicating resilience despite recent consolidation. The current price of $90.96 sits near the upper end of its 52-week range ($57.36 to $102.13), approximately 11% below its yearly high, suggesting the stock is consolidating after a strong run.
Beta
0.98
0.98x market volatility
Max Drawdown
-17.3%
Largest decline past year
52-Week Range
$57-$102
Price range past year
Annual Return
+40.9%
Cumulative gain past year
| Period | USFD Return | S&P 500 |
|---|---|---|
| 1m | -4.6% | -5.3% |
| 3m | +22.4% | -4.6% |
| 6m | +22.1% | -2.8% |
| 1y | +40.9% | +15.9% |
| ytd | +23.5% | -4.6% |
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USFD Fundamental Analysis
Revenue growth has been positive, with Q4 2025 revenue of $9.8 billion representing a 3.26% year-over-year increase. Profitability has improved markedly, as the Q4 2025 net income margin of 1.88% is substantially higher than the 0.70% margin from Q4 2024. The company maintains a moderate debt-to-equity ratio of 1.33 and generates robust cash flow, with trailing twelve-month free cash flow of $959 million, supporting financial flexibility and shareholder returns through stock buybacks.
Quarterly Revenue
$9.8B
2025-12
Revenue YoY Growth
+0.03%
YoY Comparison
Gross Margin
+0.17%
Latest Quarter
Free Cash Flow
$959000000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is USFD Overvalued?
Given the company's positive net income, the trailing P/E ratio of 25.6 is the primary valuation metric. This multiple suggests the market is pricing in expectations for continued earnings growth. A peer comparison for industry averages is not available in the provided data, so a relative valuation assessment cannot be made.
PE
31.4x
Latest Quarter
vs. Historical
High-End
5-Year PE Range -299x~59x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
15.2x
Enterprise Value Multiple
Investment Risk Disclosure
The primary financial risk stems from the company's moderate leverage, with a debt-to-equity ratio of 1.33. While manageable with current cash flows, a sustained period of rising interest rates or an economic downturn could pressure profitability. The business model carries inherent operational risks, including exposure to food cost inflation and the health of the restaurant and hospitality sectors, which are sensitive to consumer discretionary spending. Furthermore, the stock's technical position shows it is consolidating after a significant rally, trading near the upper end of its 52-week range. This, combined with a high short ratio of 3.55, indicates potential for increased volatility and downward pressure if the company fails to meet elevated growth expectations priced into its 25.6x trailing P/E multiple.
FAQ
Key risks include economic cyclicality affecting restaurant sales, the company's moderate debt load (D/E of 1.33), and persistent food cost inflation squeezing already thin margins (~1.7% net). Additionally, the stock is technically extended, trading 11% below its 52-week high after a 41% yearly gain, which increases vulnerability to a pullback if growth momentum slows.
The 12-month outlook is for consolidation with a positive bias. The base case (60% probability) sees the stock trading between $90 and $102, aligning with its recent range and 52-week high. The bull case targets $110+ on exceptional execution, while the bear case could see a pullback toward the $70s if macro conditions deteriorate. The forward P/E of 16.2 suggests analysts expect steady, not explosive, growth.
Valuation is mixed. The trailing P/E of 25.6 appears high for a low-margin distributor, suggesting the stock is not undervalued. However, the forward P/E of 16.2 and a PEG ratio of 0.57 (based on provided data) indicate the market is pricing in future growth more reasonably. Relative to its own improved earnings power, the stock sits in a fair-to-slightly-rich zone, not egregiously overvalued.
USFD is a good stock for investors seeking exposure to a improving foodservice distributor with strong cash flow. The company's margin expansion from 0.70% to 1.88% YoY is a powerful positive signal. However, its high trailing P/E of 25.6 means it is not a clear bargain, making it more suitable for those willing to pay for quality and growth at a reasonable forward P/E of 16.2.
USFD is more suitable for a long-term investment horizon. The company's margin improvement story and infrastructure advantages play out over years, not quarters. Short-term trading is challenged by the stock's recent volatility and high valuation, which could lead to swings unrelated to long-term fundamentals. Patient investors can benefit from compounding cash flow and potential market share gains.