Floor & Decor
FND
$47.83
-0.71%
Floor & Decor Holdings, Inc. is a specialty retailer of hard surface flooring, operating a warehouse-format, high-volume/low-price model across tile, wood, laminate, natural stone, and installation materials, with roughly 13,700 employees and a footprint concentrated in the United States plus an e-commerce channel. The company is best characterized as a category-killer and share-gainer in a fragmented home-improvement market, differentiated by its in-stock depth, pro-customer focus (installers and commercial buyers), and a store-growth engine that has historically driven above-market revenue expansion. The current investor debate centers on whether that unit-growth story can offset a multi-year housing and big-ticket remodeling slump: revenue growth has decelerated to roughly 3% year-over-year, gross margin has been volatile quarter to quarter, and the stock has de-rated sharply as the market questions the payoff of an aggressive capex program during a demand trough. Sentiment is further complicated by macro sensitivity — the name trades as a rate-sensitive housing derivative, so any shift in Fed-cut expectations or mortgage rates becomes an immediate catalyst for the shares.…
FND
Floor & Decor
$47.83
Investment Opinion: Should I buy FND Today?
Rating: Hold. The core thesis is that FND offers a compelling valuation reset (forward PE of 20.7x vs. historical 40-60x) but lacks a near-term catalyst to reverse the persistent downtrend, and the analyst consensus of 'hold' with a $58.14 average target (+28.5% upside) reflects this balanced view. The risk/reward is skewed positively for patient investors, but the timing is uncertain given the housing slump and margin volatility.
Supporting evidence: (1) Valuation is undemanding at 1.45x PS and 20.7x forward PE, especially against a 48% gross margin and a category-killer model; (2) Revenue growth of 2.97% YoY, while modest, is positive and sequentially improving from the Q4 2025 trough; (3) Gross margin recovered to 48.24% in Q2 2026, showing operating leverage potential; (4) Free cash flow of $211.4 million TTM provides some flexibility, and the company repurchased $65.7 million of stock in Q2, signaling confidence. However, the 19.6x EV/EBITDA is still a premium to peers, and ROE of 8.66% is lackluster.
Risks: The biggest risks are a continued housing downturn (beta 1.598 amplifies downside), margin compression if volumes don't recover, and a break below the 52-week low of $42.64 that could trigger further selling. The rating would upgrade to Buy if the stock reclaims $50+ with improving comps or if forward PE compresses below 18x on stable earnings; it would downgrade to Sell if revenue growth turns negative or gross margin falls below 44%. Relative to history, the stock is deeply undervalued on sales and earnings multiples, but the market is demanding evidence of a turnaround before re-rating it.
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FND 12-Month Price Forecast
FND presents a classic value-versus-timing dilemma: the valuation is undeniably depressed relative to its own history, but the lack of a near-term catalyst and persistent relative weakness argue for patience. The company's unit-growth story remains intact, and margin recovery in Q2 2026 is encouraging, but revenue growth of ~3% is insufficient to justify a premium multiple without a housing recovery. The high beta and short interest create potential for sharp rallies on any positive macro surprise, but also amplify downside if conditions worsen. I would upgrade to bullish if the stock reclaims $50 and gross margins hold above 47% for two consecutive quarters, or if mortgage rates fall below 6.5%. I would downgrade to bearish if revenue turns negative or if the stock breaks below $42.64 with volume.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Floor & Decor's 12-month outlook, with a consensus price target around $57.14 and implied upside of +19.5% versus the current price.
Average Target
$57.14
0 analysts
Implied Upside
+19.5%
vs. current price
Analyst Count
—
covering this stock
Price Range
$38 - $75
Analyst target range
Coverage is broad, with 22 analysts and a consensus recommendation of "hold" (mean rating 2.61 on a scale where lower is more bullish). The average target price is $58.14, implying roughly +28.5% upside from the current $45.25 — a headline number that looks bullish but is undercut by the neutral consensus rating, indicating analysts see value but lack conviction on timing. Recent actions are uniformly maintenance rather than upgrades: Evercore ISI reiterated In Line on 2026-09-29, while Morgan Stanley, Wells Fargo, UBS, and Mizuho all stayed Equal Weight/Neutral and Piper Sandler, Truist, and Telsey held Overweight/Buy/Outperform after the July 31 print — a pattern of frozen ratings that signals a wait-and-see stance pending evidence of a demand turn.
The target range of $38.00 to $75.00 is extremely wide — the high target is 97% above the low — which signals high uncertainty rather than strong conviction. The $75 high implies a full recovery in housing turnover, accelerating comps, and multiple re-expansion back toward historical norms, while the $38 low (about 16% below the current price) prices in continued margin compression and a prolonged big-ticket remodeling downturn. Consensus revenue of $5.52 billion (range $5.34B-$5.66B) and EPS of $2.60 (range $2.02-$2.95) bracket a recovery scenario but with meaningful dispersion. With the stock near its 52-week low, a 5.4-day short ratio, and a beta of 1.6, the setup is asymmetric only if the macro cooperates — the wide dispersion and uniformly maintained ratings argue for treating the +28.5% average upside as a scenario-weighted expectation, not a near-term signal.
Bulls vs Bears: FND Investment Factors
The bear case currently has stronger evidence: the stock is in a relentless downtrend, growth has decelerated to ~3%, and profitability remains depressed with volatile margins. However, the bull case rests on a powerful valuation reset—forward PE of 20.7x versus a historical 40-60x range—and the potential for a sharp recovery if housing turnover inflects. The single most important tension is whether the current earnings trough is cyclical or structural: if the housing market thaws and margins normalize toward the high-40s, the stock could double; if the slowdown persists, further multiple compression is likely. Near-term, the lack of positive catalysts and neutral analyst stance suggest the path of least resistance remains lower until proven otherwise.
Bullish
- Deep valuation reset creates optionality: FND trades at 1.45x sales and 20.7x forward earnings, down from 9.79x PS in Q4 2024 and a trailing PE of 57.4x, an 80%+ compression that prices in a permanent slowdown. If earnings merely normalize to the $2.60 consensus, the stock would still be at a discount to its historical 40-60x PE range, offering substantial multiple expansion potential.
- Analyst target implies 28.5% upside: The average analyst target of $58.14 represents a 28.5% premium to the current $45.25, with a high target of $75 (66% upside). Even the low target of $38 is only 16% below current levels, suggesting the risk/reward is skewed positively if the housing market stabilizes.
- Unit growth and share gains continue: Despite a soft category, revenue grew 2.97% year-over-year to $1.25 billion in Q2 2026, with sequential improvement from the Q4 2025 trough of $1.13 billion. The company's category-killer model and pro-customer focus continue to take share in a fragmented $100+ billion hard-surface flooring market.
- Margin recovery underway: Q2 2026 gross margin expanded to 48.24% from 44.04% in Q1 2026 and 43.87% in Q2 2025, while operating margin jumped to 9.92% from 4.55% sequentially. This 400+ basis point swing demonstrates operating leverage as volumes recover and cost pressures ease.
Bearish
- Persistent downtrend and relative weakness: The stock is down 36.16% over the past year and 28.14% YTD, underperforming the S&P 500 by 51.69% and 40.07% respectively. It sits at just 7.3% of its 52-week range ($42.64-$77.46) with a max drawdown of -51.9%, signaling entrenched distribution and lack of buyer conviction.
- Growth decelerated to low single digits: Revenue growth of 2.97% YoY is a fraction of the double-digit pace that once justified a premium multiple. The market is questioning whether the aggressive store expansion and capex program can generate adequate returns in a prolonged housing slump.
- Thin and volatile profitability: Trailing net margin is only 4.45% and operating margin 5.77%, well below historical mid-cycle levels. The 400+ basis point quarterly gross margin swing highlights earnings instability, and ROE of 8.66% and ROA of 2.74% are modest for a growth retailer.
- Leverage and capital intensity limit flexibility: Debt-to-equity is 1.51x and the current ratio is 1.33x, while capex coverage of 2.31x and days inventory of ~159 tie up cash. Free cash flow TTM of $211.4 million (3.1% yield) provides limited cushion if demand deteriorates further.
FND Technical Analysis
Floor & Decor is in a sustained, well-established downtrend. The stock is down 36.16% over the past year, 28.14% year-to-date, and has posted a max drawdown of -51.9%, a profile consistent with persistent distribution rather than a healthy correction. At $45.25, the shares sit at roughly 7.3% of the 52-week range (range of $42.64 to $77.46), meaning price is pinned near the lows — a positioning that historically signals either capitulation/value-hunting territory or a falling knife, and the absence of any meaningful bounce off the $42.64 low argues for the latter until proven otherwise. Relative strength confirms the damage: -51.69% versus SPY over one year and -40.07% YTD, one of the weakest relative readings in the consumer cyclical complex.
Short-term momentum is negative but decelerating, and it diverges from an already weak longer-term trend in a way that suggests exhaustion rather than acceleration. The stock is down 1.57% over one month versus a +1.22% gain for SPY (relative strength -2.79%), and down 20.32% over three months against +2.69% for the index (relative strength -23.01%), so the underperformance is persistent across horizons. Notably, the 1-month decline (-1.57%) is far milder than the 3-month (-20.32%) and 6-month (-16.31%) declines, implying the selling pressure has moderated into a low-volatility drift near the lows rather than a fresh breakdown. Volume of roughly 3.88 million shares and a short ratio of 5.4 days indicate elevated bearish positioning that could fuel sharp squeezes on any positive catalyst, while the lack of RSI data prevents a definitive oversold read.
Key technical levels are clearly defined by the 52-week envelope: support at $42.64 (only about 5.8% below the current $45.25) and resistance at $77.46 (roughly 71% above), with intermediate resistance likely in the $50-$55 zone where the stock repeatedly failed in August and September. A decisive break below $42.64 would confirm a new leg lower and likely trigger momentum-driven selling, whereas reclaiming $50+ would be the first evidence of a base. Volatility risk is material: beta of 1.598 means the stock is roughly 60% more volatile than the S&P 500, so position sizing should assume amplified drawdowns — a 10% market move implies roughly a 16% move here, which is consistent with the -51.9% max drawdown observed over the period.
Beta
1.60
1.60x market volatility
Max Drawdown
-50.1%
Largest decline past year
52-Week Range
$43-$77
Price range past year
Annual Return
-32.8%
Cumulative gain past year
| Period | FND Return | S&P 500 |
|---|---|---|
| 1m | +0.9% | -1.0% |
| 3m | -11.0% | +2.9% |
| 6m | -6.4% | +6.5% |
| 1y | -32.8% | +13.1% |
| ytd | -24.0% | +11.4% |
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FND Fundamental Analysis
Revenue growth has decelerated to a low-single-digit pace but is not contracting. Q2 2026 revenue was $1.250 billion, up 2.97% year-over-year from $1.214 billion in Q2 2025, and the sequential cadence ($1.152B in Q1 2026, $1.130B in Q4 2025, $1.180B in Q3 2025) shows a modest re-acceleration off the Q4 trough rather than a deteriorating trajectory. Segment data shows the business is heavily concentrated in tile ($293.1M) and installation materials and tools ($267.2M), with wood ($93.0M), natural stone ($53.7M), adjacent categories ($27.0M), and other ($26.0M) rounding out the mix — the pro-heavy installation and tile categories are the core growth engine, while discretionary-adjacent categories remain small. The key takeaway is that FND is growing units and share in a soft category, but the ~3% top line is well below the double-digit pace the market once paid a premium multiple for, which is the crux of the de-rating.
Profitability is positive but thin and volatile. Q2 2026 net income was $95.87 million on a 7.67% net margin, with gross margin of 48.24% — a sharp improvement from Q1 2026's 44.04% gross margin and 3.45% net margin, and above the 43.87% gross margin in Q2 2025. That Q1-to-Q2 gross margin swing of more than 400 basis points, alongside operating margin moving from 4.55% to 9.92%, suggests meaningful quarterly noise from occupancy costs, freight, and mix rather than a clean margin-expansion story. The trailing figures (gross margin 43.64%, operating margin 5.77%, net margin 4.45%) are below the company's historical mid-cycle profitability, consistent with deleverage on a soft sales base — the investment case hinges on whether gross margin can hold near the high-40s as volumes recover.
Balance sheet and cash generation are adequate but not fortress-like. Debt-to-equity is 1.51x, current ratio is 1.33x, and ROE is 8.66% with ROA of 2.74% — modest returns reflecting heavy capital investment in stores and inventory. Free cash flow TTM is $211.4 million against a $6.80 billion market cap (roughly 3.1% FCF yield), and Q2 2026 operating cash flow of $169.2 million comfortably covered $73.2 million of capex, producing $96.0 million of quarterly FCF; the company also repurchased $65.7 million of stock in the quarter. The concern is the capex intensity (capital expenditure coverage ratio of 2.31x) and inventory-heavy working capital (days of inventory outstanding near 159), which mean FCF is structurally thin relative to earnings and sensitive to any demand shock — the business can self-fund, but with limited cushion.
Quarterly Revenue
$1.3B
2026-06
Revenue YoY Growth
+3.0%
YoY Comparison
Gross Margin
48.2%
Latest Quarter
Free Cash Flow
$211397000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is FND Overvalued?
Because net income is positive ($95.87 million in Q2 2026, TTM EPS of $0.03 on a trailing basis but $0.89 in the latest quarter), the PE ratio is the appropriate primary metric. The trailing PE is 32.58x versus a forward PE of 20.72x — a roughly 36% compression that implies the market expects earnings to grow substantially, consistent with consensus EPS of $2.60 versus a depressed trailing base. That gap is the entire valuation debate: investors are paying 32.6x for trough earnings but only 20.7x for next year's recovery, so the stock is a leveraged bet on an earnings rebound rather than a cheap asset today.
Relative to its own sector and history, FND screens as a premium name on most metrics but a discount on sales. The PS ratio of 1.45x and EV/Sales of 1.39x are low in absolute terms for a retailer with 48% gross margins, while EV/EBITDA of 19.62x and P/B of 2.82x are moderate; the PEG ratio of 31.3x is distorted by the near-zero trailing EPS base and should be disregarded. Against a home-improvement peer set where mature players trade at mid-teens EV/EBITDA, FND's 19.6x is a premium that is only justified if unit growth and margin recovery resume — the market is currently withholding that benefit of the doubt, as evidenced by the 36% one-year decline.
Historical context is the most striking part of the valuation picture. The stock's own PE has collapsed from 57.4x in Q4 2024 and 46.4x in Q1 2025 to 32.6x today, and its PS ratio has fallen from 9.79x in Q4 2024 and 11.59x in Q3 2024 to 1.45x now — a compression of more than 80% on sales. Even accounting for the different share-count basis in the historical series, the direction is unambiguous: FND is trading near the bottom of its multi-year valuation band. That can mean either a genuine value opportunity if earnings normalize toward the $2.60 consensus, or a market verdict that the growth algorithm has permanently slowed — the forward PE of 20.7x versus the historical 40-60x range suggests the market has already priced in substantial multiple de-rating.
PE
32.6x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 16x~69x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
19.6x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks are moderate but rising. Debt-to-equity of 1.51x and a current ratio of 1.33x indicate a leveraged balance sheet with limited liquidity buffer, while capex coverage of 2.31x and days inventory outstanding near 159 tie up cash in a slowing demand environment. Free cash flow TTM of $211.4 million (3.1% FCF yield) is thin relative to the $6.8 billion market cap, and the 400+ basis point quarterly gross margin swing (48.24% in Q2 2026 vs. 44.04% in Q1) highlights earnings volatility that could pressure the stock if margins fail to hold. Additionally, revenue concentration in tile ($293.1M) and installation materials ($267.2M) exposes the company to a narrow segment of the remodeling market.
Market and competitive risks are significant given the stock's high beta of 1.598 and its position as a housing derivative. Valuation compression risk remains: even after an 80% PS decline, the EV/EBITDA of 19.6x is a premium to mature home-improvement peers in the mid-teens, leaving room for further de-rating if growth doesn't reaccelerate. Competitive disruption from larger players like Home Depot and Lowe's, as well as online channels, could pressure market share, while regulatory headwinds (e.g., tariffs on imported flooring) and macro sensitivity to mortgage rates pose ongoing threats. Recent news highlighting rate-cut hopes shows how quickly sentiment can shift, but also underscores the stock's dependence on external factors.
Worst-case scenario: A prolonged housing downturn, coupled with margin compression and a failure to control inventory, could drive earnings below the low-end consensus of $2.02 and trigger multiple compression toward the analyst low target of $38. From the current $45.25, that represents a 16% decline, but a break below the 52-week low of $42.64 (only 5.8% below) could catalyze momentum selling toward the $38 level or lower. Given the max drawdown of -51.9% over the past year, a similar drawdown from current levels would take the stock to ~$21.80, though that is an extreme tail risk. More realistically, a retest of the 52-week low implies a 5.8% loss, while a drop to the analyst low target implies a 16% loss.
FAQ
The key risks are: (1) Macro/housing risk: as a housing derivative with a beta of 1.598, a prolonged slump in remodeling activity could drive revenue negative and compress margins; (2) Financial risk: debt-to-equity of 1.51x and thin FCF yield of 3.1% limit flexibility, while volatile gross margins (400+ bps quarterly swings) create earnings uncertainty; (3) Competitive risk: larger players like Home Depot and Lowe's could pressure market share, and tariffs on imported flooring could raise costs; (4) Valuation risk: even after a steep decline, EV/EBITDA of 19.6x is a premium, leaving room for further de-rating if growth doesn't accelerate. The most severe risk is a break below the 52-week low of $42.64, which could trigger momentum selling toward $38.
Our 12-month forecast has three scenarios: Bull (25% probability) target $65-$75, Base (50%) target $52-$62, and Bear (25%) target $38-$43. The base case assumes a stabilizing housing market, revenue growth of 3-5%, and EPS of $2.60, leading to a partial multiple re-rating to 22-24x and a price near the analyst average of $58. The bull case requires a sharp drop in mortgage rates and a housing rebound, while the bear case assumes a prolonged slump and margin compression. The most likely scenario is the base case, as it aligns with consensus estimates and the current risk/reward. Key catalysts include Fed policy, earnings reports, and housing data.
FND appears undervalued relative to its own history but may be fairly valued relative to peers. Its PS ratio of 1.45x is an 80%+ compression from 9.79x in Q4 2024, and forward PE of 20.7x is less than half its historical 40-60x range. However, EV/EBITDA of 19.6x is still a premium to mature home-improvement peers in the mid-teens, reflecting the market's expectation of a recovery. The stock is pricing in a cyclical trough, but not a permanent impairment; if earnings normalize to $2.60, the forward PE of 20.7x is reasonable for a retailer with 48% gross margins and unit growth. The market is paying a fair price for a depressed earnings base, with upside if the cycle turns.
FND is a good buy only for investors with a long-term horizon and high risk tolerance, given its 28.5% upside to the average analyst target but significant downside risk. The stock trades at 20.7x forward earnings, a steep discount to its historical 40-60x range, and 1.45x sales, implying the market has priced in a permanent slowdown. However, revenue growth of just 2.97% and volatile margins (gross margin swung from 44.04% to 48.24% in two quarters) suggest the turnaround is not yet confirmed. The biggest downside risk is a break below the 52-week low of $42.64, which could lead to a retest of the analyst low of $38 (-16%). For patient investors who believe housing will recover, the risk/reward is favorable, but near-term catalysts are lacking.
FND is more suitable for long-term investment (minimum 2-3 years) given its cyclical nature and the need for a housing recovery to materialize. The stock's high beta (1.598) and lack of dividend make it unsuitable for income investors, while the volatile margins and earnings uncertainty pose risks for short-term traders. However, the deep valuation reset and unit-growth story offer substantial upside for patient investors who can tolerate drawdowns (max -51.9% over the past year). A suggested minimum holding period is 2-3 years to allow the housing cycle to turn and the company's store expansion to mature. Short-term trading should be avoided unless using strict stop-losses below the 52-week low of $42.64.