USFD

Of course. Here is a comprehensive analysis of US Foods (USFD) based on the provided data.

Overall Analysis

US Foods presents a compelling growth story with strong operational execution, though it trades at a premium valuation. The company is successfully winning market share in the competitive food distribution industry, demonstrated by its revenue growth and excellent working capital management with a cash conversion cycle of just 8.7 days. However, investors are paying a high price for this execution, as seen in the elevated P/E and EV/EBITDA ratios. The recent compression in net income due to rising costs is a key area to watch, but it may be an investment in future growth.

Technical Perspective The stock is in a confirmed uptrend, showing clear outperformance against the broader market over the last three months. Having recovered significantly from its 52-week low but still not near overbought territory, the chart suggests there is potential for continued upward momentum. The stock's volatility is in line with the overall market, making it a typical core holding rather than a speculative bet.

Fundamental Perspective Fundamentally, USFD is a tale of two halves. On one hand, the company is operationally sound with efficient inventory management and solid revenue growth. On the other hand, profitability has recently been pressured by rising expenses, leading to a significant drop in net income. The company's financial health is adequate with moderate leverage, but its tight cash position requires careful management.

Valuation & Risk Assessment Valuation is the primary concern. The stock appears richly valued based on earnings (P/E of 31.67), indicating high market expectations. The negative PEG ratio further signals that current earnings growth does not justify the premium. Primary risks include ongoing margin pressures from inflation and a potential economic slowdown affecting its restaurant customers.

**Investment Recommendation**

Based on this analysis, USFD is a BUY for growth-oriented investors comfortable with its premium valuation. The company's strong market position and efficient operations provide a solid foundation for long-term growth. While short-term profitability is under pressure, the underlying business momentum is positive. Investors should consider layering into the position to manage valuation risk.

*Disclaimer: This is not financial advice. Please conduct your own research before making any investment decisions.*

RockFlow Model Forecast: Three Scenarios for 2026

Of course. Here is a 12-month strategic outlook for US Foods (USFD).

Outlook: We maintain a cautiously optimistic view for USFD over the next 12 months, anticipating moderate upside driven by operational execution, though tempered by a rich valuation and macro headwinds.

1. Key Catalysts: The primary catalyst is continued market share gains within the highly fragmented food distribution industry, supported by the company's efficient logistics and service offerings. Success in managing inflationary cost pressures to stabilize and expand net margins will be a critical driver for investor sentiment and earnings growth.

2. Potential Risks: The most significant near-term risk is the persistence of inflationary pressures on costs, which could continue to compress profitability. A potential economic slowdown poses a secondary risk, as reduced consumer dining-out activity would directly impact its restaurant customers' demand. The stock's premium valuation (P/E of 31.67) also creates vulnerability if growth disappoints or if market multiples contract.

3. Target Price Range: While a specific analyst consensus is not provided, the current technical momentum and fundamental growth profile suggest a target range of $85 - $95 over the next 12 months, representing potential upside of 7-20% from the current price. Achieving the higher end of this range is contingent on successful margin improvement.

Wall Street Consensus

Most Wall Street analysts are optimistic about USFD's 12-month outlook, with consensus target around $82.45, indicating expected upside potential.

Overall, USFD has investment potential but also faces challenges. Here are key factors to weigh before investing.

Overall, US Foods has demonstrated solid outperformance relative to the broader market over the past three months, exhibiting moderate volatility in line with its beta. The stock shows a healthy recovery trajectory from its 52-week low.

Short-term performance is positive, with a 3.1% gain over one month accelerating to a 5.31% gain over three months. This outperformance is confirmed by a positive 1.94% relative strength versus the market, indicating the stock is trending upward more strongly than the benchmark.

Currently priced at $79.27, the stock sits approximately 72% of the way toward its 52-week high from its low, suggesting it is in a strong uptrend but not yet in overbought territory. The modest distance from the high and the recovery from a maximum drawdown of -17.28% indicate there is still potential room for appreciation before reaching extreme levels.

Revenue & Profitability USFD demonstrated modest revenue growth with Q3 revenue increasing 1.1% to $101.9 billion from Q2's $100.8 billion. However, profitability metrics declined significantly as net income dropped 32% quarter-over-quarter to $153 million, with net profit margin compressing from 2.2% to 1.5%. The decline was primarily driven by higher operating expenses, particularly selling, general and administrative costs, which rose 3.9% during the quarter.

Financial Health The company maintains moderate leverage with a debt-to-equity ratio of 1.11 and overall debt ratio of 0.35. Cash position appears tight with a cash ratio of just 0.015, though the quick ratio of 0.70 provides some liquidity buffer. Interest coverage of 3.7 times remains adequate, though the low cash flow to debt ratio of 0.07 suggests limited capacity for rapid debt reduction from operating cash flows.

Operational Efficiency Return on equity of 3.4% reflects modest profitability relative to shareholder investment, while asset turnover of 0.73 indicates reasonably efficient asset utilization. The company demonstrates strong working capital management with a cash conversion cycle of just 8.7 days, supported by efficient inventory turnover of 5.0 times and receivables turnover of 4.6 times.

Valuation Level

USFD's valuation metrics present a mixed picture. The trailing PE of 31.67 and forward PE of 28.22 are high, suggesting a premium valuation, which is further supported by a very elevated EV/EBITDA of 78.61. However, the PS ratio of 0.45 appears quite low, indicating the market prices its sales modestly, and the PEG ratio is negative (-0.94), typically signaling that earnings growth expectations are negative or depressed and making the PE ratio less meaningful. The PB ratio of 3.95 is moderate. Overall, the stock appears potentially overvalued based on its earnings and cash flow multiples (PE, EV/EBITDA), but the low PS ratio provides a contrasting, more favorable signal.

Peer Comparison

A direct peer comparison cannot be performed as the specific industry average data was not provided in the query. To accurately assess whether USFD is trading at a premium or discount to its sector, key benchmarks such as the industry average PE, PB, and PS ratios are essential. Without this contextual data, it is only possible to analyze USFD's metrics in isolation, concluding that it shows signs of being richly valued on an earnings basis but reasonably valued on a sales basis.

Of course. Here is a risk analysis for USFD based on the provided metrics.

Volatility Risk: With a Beta of 1.034, USFD's stock price is expected to be nearly perfectly correlated with the broader market's movements, exhibiting volatility that is essentially in line with the market average. The maximum drawdown of -17.28% over the past year confirms this, indicating a moderate level of downside risk that is typical for a company moving with the general market cycle. This suggests investors should expect price fluctuations that are commensurate with overall market conditions rather than being driven by isolated, extreme company-specific volatility.

Other Risks: The absence of significant short interest is a positive indicator, implying that professional traders do not see a high probability of a near-term price decline based on company fundamentals. This lack of a bearish bet, however, does not eliminate other risks such as operational pressures, including margin compression from food cost inflation or competitive threats within the food distribution industry. Furthermore, while not indicated by these metrics, broader economic risks like a downturn in the restaurant industry (a key customer segment) remain a primary concern for the company's performance.