Kenvue Inc. (KVUE) Stock Analysis
Kenvue Inc. (KVUE) Stock Analysis
Analysis from 10-Q filed 2025-11-03. Data as of Q4 2025.
Overall Grade: F (Concerning)
Kenvue Inc. faces challenges in financial performance that warrant careful analysis.
| Metric | Value | Context |
|---|---|---|
| ROIC | 9.0% | Near cost of capital |
| FCF Margin | 11.4% | Healthy cash flow |
| Debt/Equity | 0.1x | Conservative leverage |
Investment Thesis: Healthy free cash flow margin of 11.4% provides financial flexibility for growth and shareholder returns.
Explore Kenvue Inc.: Earnings History | Filing Intelligence | ROIC Analysis
Profitability: Kenvue Inc. earns 9.0% ROIC, Top 50% in Materials
Kenvue Inc.'s trailing-twelve-month ROIC of 9.0% ranks Top 50% in Materials companies (sector median: 4.3%), driven by NOPAT margin of 11.7% combined with asset turnover of 0.6x. Source: 10-Q filed 2025-11-03. Gross margin of 58.1% with operating margin at 16.0% reflects strong pricing power.
| Metric | KVUE | Rating | Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 9.0% | Adequate | Above sector median of 4.3% |
| Return on Equity (ROE) | 14.1% | Adequate | Moderate equity returns |
| Gross Margin | 58.1% | Excellent | Strong pricing power |
| Operating Margin | 16.0% | Good | Efficient operations |
Cash Flow: Kenvue Inc. generates $1.7B FCF at 11.4% margin, positive NaN/8 quarters
Kenvue Inc. generated $1.7B in free cash flow (TTM), a 11.4% FCF margin, a margin that ranks Top 25% in Materials. Operating cash flow exceeds net income by 1.5x, indicating high earnings quality. FCF was positive in N/A of the last 8 quarters. Source: 10-Q filed 2025-11-03.
| Metric | KVUE | Rating | Context |
|---|---|---|---|
| Free Cash Flow Margin | 11.4% | Good | Healthy cash generation |
| Free Cash Flow (TTM) | $1.7B | Good | Positive cash generation |
| OCF/Net Income | 1.5x | Excellent | High earnings quality |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
Balance Sheet: Kenvue Inc. at 0.1x leverage
Kenvue Inc.'s debt-to-equity ratio of 0.1x reflects conservative leverage. Total debt of $1.5B offset by $1.1B in cash. Source: 10-Q filed 2025-11-03.
| Metric | KVUE | Rating | Context |
|---|---|---|---|
| Debt to Equity | 0.1x | Excellent | Conservative capital structure |
| Net Cash Position | $-391.0M | Adequate | Net debt position |
Valuation: Kenvue Inc. trades at 22.0x earnings
Kenvue Inc. trades at a P/E of 22.0x. Free cash flow yield of 5.2% offers attractive cash returns relative to price.
| Metric | KVUE | Rating | Context |
|---|---|---|---|
| P/E Ratio | 22.0x | Adequate | Premium valuation |
| EV/Sales | 2.2x | Good | Attractive revenue multiple |
| FCF Yield | 5.2% | Good | Attractive cash return |
| Dividend Yield | 4.8% | Good | Meaningful income |
Capital Allocation: Kenvue Inc. returns 5.4% shareholder yield
Kenvue Inc.'s total shareholder yield is 5.4% (dividends 4.8% + buybacks 0.6%). Source: 10-Q filed 2025-11-03.
| Metric | KVUE | Rating | Context |
|---|---|---|---|
| Total Shareholder Yield | 5.4% | Good | Dividend + buyback yield combined |
| Buyback Yield | 0.6% | Adequate | Minimal buyback activity |
| Total Capital Returned (TTM) | $1.8B | Good | Dividends + buybacks returned to shareholders |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 9.0% | Top 50% | 2.1x above |
| Free Cash Flow Margin | 11.4% | Top 25% | 31.0x above |
| Gross Margin | 58.1% | Top 25% | 2.3x above |
| Operating Margin | 16.0% | Top 50% | 2.1x above |
| Return on Equity (ROE) | 14.1% | Top 50% | 1.9x above |
| P/E Ratio | 22.0x | N/A | - |
Financial Scorecard
| Metric | KVUE | Rating | Sector Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 9.0% | Adequate | Top 50% of sector (median: 4.3%) |
| Free Cash Flow Margin | 11.4% | Good | Top 25% of sector (median: 0.4%) |
| Gross Margin | 58.1% | Excellent | Top 25% of sector (median: 25.2%) |
| Debt to Equity Ratio | 13.5% | Excellent | Conservative capital structure |
| P/E Ratio (Price-to-Earnings) | 22.0x | Adequate | Fair value |
| Free Cash Flow Yield | 5.2% | Good | Solid cash yield |
Frequently Asked Questions
Q: What is Kenvue Inc.'s Return on Invested Capital (ROIC)?
Kenvue Inc. (KVUE) has a trailing twelve-month Return on Invested Capital (ROIC) of 9.0%. This compares above the sector median of 4.3%. An ROIC near 8-12% is approximately the cost of capital for most companies.
Q: What is Kenvue Inc.'s Free Cash Flow Margin?
Kenvue Inc. (KVUE) has a free cash flow margin of 11.4%, generating $1.7 billion in free cash flow over the trailing twelve months. A FCF margin between 10-20% represents healthy cash generation for most industries.
Q: Is Kenvue Inc. stock overvalued or undervalued?
Kenvue Inc. (KVUE) trades at a P/E ratio of 22.0x, which is above the sector median of N/A. The EV/Sales multiple is 2.2x. Free cash flow yield is 5.2%, which is in line with market averages.
Q: Does Kenvue Inc. pay a dividend?
Kenvue Inc. (KVUE) currently pays a dividend yield of 4.8%. Including share buybacks, the total shareholder yield is 5.4%. A yield above 4% is attractive for income investors, though sustainability should be verified through payout ratio analysis.
Q: What is Kenvue Inc.'s revenue and earnings growth?
Kenvue Inc. (KVUE) declined revenue by 2.1% year-over-year. Earnings per share increased by 42.6% compared to the prior year. Revenue decline may indicate market challenges or industry headwinds.
Q: Is Kenvue Inc. buying back stock?
Kenvue Inc. (KVUE) repurchased $197.0 million of stock over the trailing twelve months. This represents a buyback yield of 0.6%.
Q: How does Kenvue Inc. compare to competitors in Materials?
Compared to other companies in Materials, Kenvue Inc. (KVUE) shows: ROIC of 9.0% is above the sector median of 4.3% (Top 40%). FCF margin of 11.4% exceeds the sector median of 0.4% (Top 17% of sector). Gross margin at 58.1% is 32.9 percentage points higher than sector peers. These rankings are based on MetricDuck's analysis of all Materials companies with available SEC filings.
Q: What warning signs should I watch for with Kenvue Inc.?
Kenvue Inc. (KVUE) shows no major financial warning signs based on current metrics. However, investors should always monitor: 1) Margin compression trends, 2) Cash flow consistency, 3) Debt levels relative to cash generation, and 4) Changes in competitive positioning.
Data Source: Data sourced from 10-Q filed 2025-11-03. TTM metrics as of Q4 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.
This analysis is for informational purposes only and does not constitute investment advice.