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Lenovo Group (LNVGY)
OTHER OTC:LNVGY
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Lenovo Group
(OTC:LNVGY)
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Rating:76Outperform
Price Target:
$32.00
▲(7.82% Upside)
Lenovo Group's strong earnings call performance and positive technical indicators are the most significant factors driving the score. The company's stable financial performance and reasonable valuation further support its attractiveness. However, challenges in operational efficiency and external risks like tariff volatility slightly temper the overall outlook.
Lenovo Group (LNVGY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$18.39B
Dividend Yield3.26%
Average Volume (3M)553.00
Price to Earnings (P/E)11.1
Beta (1Y)0.55
Revenue Growth21.95%
EPS Growth50.97%
CountryUS
Employees69,500
SectorTechnology
Sector Strength88
IndustryComputer Hardware
Share Statistics
EPS (TTM)0.73
Shares Outstanding620,233,000
10 Day Avg. Volume0
30 Day Avg. Volume553
Financial Highlights & Ratios
PEG Ratio0.39
Price to Book (P/B)2.72
Price to Sales (P/S)0.24
P/FCF Ratio-322.05
Enterprise Value/Market Cap1.01
Enterprise Value/Revenue0.26
Enterprise Value/Gross Profit1.66
Enterprise Value/Ebitda5.49
Forecast
1Y Price Target
$32.00Price Target Upside7.82% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering0
Lenovo Group Business Overview & Revenue Model
Company DescriptionLenovo Group Limited, an investment holding company, develops, manufactures, and markets technology products and services. It operates through Intelligent Devices Group, Infrastructure Solutions Group, and Solutions and Services Group segments. The company offers commercial and consumer personal computers, as well as servers and workstations; and a family of mobile Internet devices, including tablets and smartphones. It also provides laptops, monitors, accessories, smart home and collaboration solutions, augmented and virtual reality, commercial internet of things, and smart infrastructure data center solutions. In addition, the company manufactures and distributes IT products, computers, computer hardware, and peripheral equipment; and offers IT, business planning, management, supply chain, finance, administration support, procurement agency, data management, intellectual property, and investment management services. Further, it is involved in the retail and service business for consumer electronic products and related digital services; development, ownership, licensing, and sale of communications hardware and software; and develops software and applications. Additionally, the company is involved in motherboard design and system, full-rack assembly across server, storage, and other products; and provides device-, infrastructure-, and software-as-a-service. It operates in China, the Asia Pacific, Europe, the Middle East, Africa, and the Americas. Lenovo Group Limited was founded in 1984 and is based in Quarry Bay, Hong Kong.
How the Company Makes MoneyLenovo generates revenue through multiple streams, primarily by selling hardware products, including personal computers, tablets, smartphones, and servers. The Intelligent Devices Group (IDG) is the largest contributor to its revenue, driven by sales of PCs and associated peripherals. Additionally, the Data Center Group (DCG) contributes significantly by providing enterprise solutions, including storage, networking, and cloud services. Lenovo also offers value-added services such as software solutions, support, and warranty services, which enhance its revenue model. Strategic partnerships with major companies like Intel and Microsoft enable Lenovo to integrate advanced technologies into its products, fostering innovation and driving sales. Furthermore, the growing demand for remote work and digital transformation solutions has positively impacted its earnings, making Lenovo a key player in the global technology landscape.
Lenovo Group Earnings Call Summary
Earnings Call Date:Aug 13, 2025
(Q1-2026)
| % Change Since: |
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Positive
Lenovo demonstrated strong financial performance with record-breaking revenue and market share growth, particularly in the PC and ISG segments. However, challenges such as tariff volatility and ISG profitability issues were noted. The company remains confident in its strategic investments and technological advancements.Q1-2026 Updates
Positive Updates
Record-Breaking Revenue and Growth
Lenovo achieved a record high first quarter revenue of USD 18.8 billion, marking a 22% year-on-year increase. Net income on a non-Hong Kong FRS basis also increased by 22% year-on-year, and on a Hong Kong FRS basis, net income more than doubled year-on-year to over USD 500 million.
PC Business Performance
The PC business delivered over 20% revenue growth, the fastest pace in 15 quarters, with a record high global market share of 24.6%. AI PC penetration now accounts for more than 30% of Lenovo's total PC shipments.
Infrastructure Solutions Group (ISG) Growth
ISG delivered a 36% year-on-year revenue growth. The AI infrastructure business doubled its revenue year-on-year, and revenue from liquid cooling solutions grew 30% year-on-year.
Solutions & Services Group (SSG) Success
SSG achieved a record high quarterly revenue, growing 20% year-on-year with more than 22% operating margin. Managed Services and Projects & Solutions businesses drove their combined mix to nearly 60% of SSG's total revenue.
Strong Global Market Performance
Revenue in the PRC surged by 36% year-on-year. In the Americas, PC market share gains were noted for the ninth consecutive quarter, and in EMEA, record bookings in Device-as-a-Service and software solutions were achieved.
Negative Updates
Impact of Tariff Volatility
Despite the record-breaking results, the earnings call acknowledged challenges with tariff volatility and geopolitical landscape, which necessitated Lenovo's unique ODM+ model to mitigate.
ISG Profitability Challenges
ISG recorded an operating loss of USD 86 million in the first fiscal quarter due to strategic investments to enhance long-term AI capabilities and transformation of the ESMB business.
R&D Investment Growth Deceleration
R&D investment growth decelerated over the last two quarters to 10% growth, raising concerns about future innovation pace.
Company Guidance
During the earnings call, Lenovo reported robust financial performance for the first quarter of the fiscal year 2025/2026, with a record group revenue of USD 18.8 billion, marking a 22% year-on-year increase. The net income on a non-Hong Kong FRS basis rose by 22% year-on-year, while on a Hong Kong FRS basis, it more than doubled, reaching USD 505 million. Lenovo's business segments experienced significant growth, with the Intelligent Device Group (IDG) achieving a revenue of USD 13.5 billion, up 18% year-on-year, and the Infrastructure Solutions Group (ISG) growing by 36% to USD 4.3 billion. The Solutions & Services Group (SSG) also delivered a record revenue, growing 20% year-on-year with a 22% operating margin. The company emphasized its strategic focus on AI, with AI-driven revenue growing significantly and AI PC penetration exceeding 30% of total PC shipments. R&D spending increased by 10% year-on-year to USD 524 million, reinforcing Lenovo's commitment to innovation and its hybrid AI strategy.Lenovo Group Financial Statement Overview
Summary
Lenovo Group shows stable financial performance with consistent revenue growth and strong return on equity. The balance sheet is moderately strong with a balanced debt-to-equity ratio. However, operational efficiency and cash conversion need improvement despite significant free cash flow growth.Income Statement
Lenovo Group's income statement shows a solid performance with a consistent revenue growth rate of 4.86% in the TTM. The gross profit margin is stable at 15.81%, and the net profit margin is 2.00%, indicating moderate profitability. However, the EBIT and EBITDA margins have slightly decreased compared to previous years, suggesting some pressure on operational efficiency.75
Positive
Balance Sheet
The balance sheet reflects a moderate financial position with a debt-to-equity ratio of 1.04, indicating a balanced approach to leveraging. The return on equity is strong at 25.66%, showcasing effective use of equity to generate profits. However, the equity ratio is relatively low, suggesting a higher reliance on debt financing.70
Positive
Cash Flow
Cash flow analysis reveals a significant improvement in free cash flow growth at 99.85% in the TTM, indicating strong cash generation capabilities. The operating cash flow to net income ratio is low at 0.04, suggesting potential challenges in converting income into cash. The free cash flow to net income ratio is healthy at 42.63%, reflecting good cash management.65
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 72.44B | 69.08B | 56.86B | 61.95B | 71.62B | 60.74B |
| Gross Profit | 11.16B | 11.10B | 9.80B | 10.50B | 12.05B | 9.77B |
| EBITDA | 3.38B | 3.67B | 3.56B | 4.15B | 4.38B | 3.25B |
| Net Income | 1.65B | 1.38B | 1.01B | 1.61B | 2.03B | 1.21B |
Balance Sheet | ||||||
| Total Assets | 46.32B | 44.23B | 38.75B | 38.92B | 44.51B | 37.99B |
| Cash, Cash Equivalents and Short-Term Investments | 4.59B | 4.76B | 3.57B | 4.32B | 3.96B | 3.13B |
| Total Debt | 4.82B | 5.73B | 3.96B | 4.36B | 5.93B | 4.42B |
| Total Liabilities | 38.77B | 37.57B | 32.67B | 32.87B | 39.12B | 34.38B |
| Stockholders Equity | 6.81B | 6.07B | 5.58B | 5.59B | 4.99B | 3.56B |
Cash Flow | ||||||
| Free Cash Flow | 866.03M | -51.33M | 725.09M | 1.22B | 2.79B | 2.81B |
| Operating Cash Flow | 1.55B | 1.10B | 2.01B | 2.80B | 4.08B | 3.65B |
| Investing Cash Flow | -1.17B | -1.06B | -1.28B | -1.92B | -1.50B | -975.90M |
| Financing Cash Flow | 136.84M | 1.19B | -1.34B | -413.78M | -1.76B | -3.23B |
Lenovo Group Technical Analysis
Positive
29.68
Price Trends
28.38
Positive
25.98
Positive
25.77
Positive
Market Momentum
0.51
Positive
52.77
Neutral
4.92
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LNVGY, the sentiment is Positive. The current price of 29.68 is above the 20-day moving average (MA) of 29.66, above the 50-day MA of 28.38, and above the 200-day MA of 25.77, indicating a bullish trend. The MACD of 0.51 indicates Positive momentum. The RSI at 52.77 is Neutral, neither overbought nor oversold. The STOCH value of 4.92 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LNVGY.
Lenovo Group Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $18.39B | 11.05 | 26.61% | 3.26% | 21.95% | 50.97% | |
74 Outperform | $23.65B | 20.93 | 120.10% | 1.76% | 3.45% | 9.69% | |
74 Outperform | $45.30B | 24.89 | 33.59% | 0.15% | 2.12% | ― | |
68 Neutral | $31.13B | 31.57 | 16.64% | ― | 47.04% | -17.89% | |
66 Neutral | $24.96B | 9.91 | -209.75% | 4.34% | 3.11% | -3.54% | |
65 Neutral | $100.64B | 20.85 | -173.32% | 1.30% | 10.68% | 24.29% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
LNVGY
Lenovo Group
29.68
2.07
7.50%
HPQ
HP
26.70
-7.88
-22.79%
NTAP
NetApp
118.50
-2.96
-2.44%
SMCI
Super Micro Computer
52.39
11.16
27.07%
WDC
Western Digital
130.59
80.61
161.28%
DELL
Dell Technologies
149.68
31.41
26.56%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.