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US Foods Holding (USFD)
NYSE:USFD
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US Foods Holding
(NYSE:USFD)
77Outperform
Positive Factors
Financial Performance
Lower operating expenses led to an earnings beat, indicating effective cost management.
Market Share
US Foods Holding Corp is executing well on its self-help strategy and is positioned to continue gaining market share despite uncertain demand.
Stock Valuation
Stock buybacks are expected to continue, as the company feels the stock is undervalued compared to long-term targets.
Negative Factors
Sales Outlook
Case growth outlook for 2025 is below the long-term target, largely due to a weaker macro environment.
Volume Performance
Total org. case vol. growth of 1.4% missed the bar of about 2%; more importantly, independent case volume of 1.8% missed the 3%+ bar and slowed sequentially.
US Foods Holding (USFD) vs. S&P 500 (SPY)
Market Cap
$17.08B
Dividend YieldN/A
Average Volume (3M)2.19M
Price to Earnings (P/E)34.4
Beta (1Y)0.81
Revenue Growth6.32%
EPS Growth5.69%
CountryUS
Employees30,000
SectorConsumer Defensive
Sector Strength67
IndustryFood Distribution
Share Statistics
EPS (TTM)0.68
Shares Outstanding231,350,020
10 Day Avg. Volume2,562,108
30 Day Avg. Volume2,189,121
Financial Highlights & Ratios
PEG Ratio-2.22
Price to Book (P/B)3.31
Price to Sales (P/S)0.00
P/FCF Ratio17.17
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$82.11Price Target Upside8.32% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
US Foods Holding Business Overview & Revenue Model
Company DescriptionUS Foods Holding Corp., through its subsidiary, US Foods, Inc., markets and distributes fresh, frozen, and dry food and non-food products to foodservice customers in the United States. The company's customers include independently owned single and multi-unit restaurants, regional concepts, national restaurant chains, hospitals, nursing homes, hotels and motels, country clubs, government and military organizations, colleges and universities, and retail locations. As of July 06, 2022, it operated 70 broadline facilities; and 80 cash and carry locations. The company was formerly known as USF Holding Corp. and changed its name to US Foods Holding Corp. in February 2016. US Foods Holding Corp. was incorporated in 2007 and is headquartered in Rosemont, Illinois.
How the Company Makes MoneyUS Foods generates revenue primarily through the sale and distribution of food and related products to a wide array of foodservice customers. The company's key revenue streams include the sale of fresh, frozen, and dry food products, which constitute the majority of its sales. In addition to food products, US Foods also offers non-food items such as disposable utensils, cleaning supplies, and kitchen equipment, contributing to its revenue diversification. The company benefits from its extensive distribution network, which allows it to efficiently deliver products to a broad customer base. Moreover, strategic partnerships and collaborations with suppliers and food manufacturers enable US Foods to offer a wide range of high-quality and innovative products, enhancing its competitive edge and customer appeal. The company's focus on customer service and operational efficiency further supports its revenue generation and market position.
US Foods Holding Financial Statement Overview
Summary
US Foods Holding exhibits a strong financial position with impressive revenue growth and stable cash flow generation. Profit margins are improving, though there is room for enhancing net profitability. The balance sheet is solid, but the company must manage its debt levels to mitigate potential risks. Overall, the company is well-positioned in the Retailers - Staples industry with a positive financial outlook.Income Statement
US Foods Holding has demonstrated strong revenue growth, with a 6.4% increase in total revenue from 2023 to 2024. The gross profit margin is solid at 17.3%, and the net profit margin improved slightly to 1.3%. The EBIT margin increased to 2.9%, indicating better operational efficiency. However, the net income has decreased slightly from the previous year, suggesting room for improvement in profitability.85
Very Positive
Balance Sheet
The company's debt-to-equity ratio stands at 1.09, showing a moderate level of leverage that is typical for the industry. The equity ratio is stable at 33.7%, reflecting a balanced asset financing structure. Return on equity is at 10.9%, indicating decent profitability. The financial health remains robust, although high debt levels could pose a risk if not managed carefully.78
Positive
Cash Flow
US Foods Holding has shown a consistent ability to generate cash, with an operating cash flow to net income ratio of 2.38. The free cash flow to net income ratio is 1.69, underscoring the strong cash generation relative to earnings. Free cash flow growth is modest, but the company maintains a solid cash flow position that supports its operational and financial activities.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 37.88B | 35.60B | 34.06B | 29.49B | 22.89B | Gross Profit |
| 6.53B | 6.15B | 5.49B | 4.66B | 3.72B | EBIT |
| 1.10B | 1.02B | 594.00M | 424.00M | -17.00M | EBITDA |
| 1.40B | 1.40B | 1.02B | 841.00M | 371.00M | Net Income Common Stockholders |
| 494.00M | 506.00M | 265.00M | 164.00M | -226.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 59.00M | 269.00M | 211.00M | 148.00M | 828.00M | Total Assets |
| 13.44B | 13.19B | 12.77B | 12.52B | 12.42B | Total Debt |
| 4.93B | 5.20B | 5.03B | 5.19B | 6.19B | Net Debt |
| 4.87B | 4.93B | 4.82B | 5.05B | 5.36B | Total Liabilities |
| 8.91B | 8.44B | 8.28B | 8.25B | 8.37B | Stockholders Equity |
| 4.53B | 4.75B | 4.50B | 4.27B | 4.05B |
| Cash Flow | Free Cash Flow | |||
| 833.00M | 831.00M | 500.00M | 145.00M | 224.00M | Operating Cash Flow |
| 1.17B | 1.14B | 765.00M | 419.00M | 413.00M | Investing Cash Flow |
| -552.00M | -495.00M | -255.00M | -262.00M | -1.11B | Financing Cash Flow |
| -831.00M | -587.00M | -447.00M | -837.00M | 1.43B |
US Foods Holding Technical Analysis
Positive
75.80
Price Trends
65.58
Positive
67.49
Positive
64.65
Positive
Market Momentum
2.41
Negative
75.03
Negative
95.38
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For USFD, the sentiment is Positive. The current price of 75.8 is above the 20-day moving average (MA) of 67.09, above the 50-day MA of 65.58, and above the 200-day MA of 64.65, indicating a bullish trend. The MACD of 2.41 indicates Negative momentum. The RSI at 75.03 is Negative, neither overbought nor oversold. The STOCH value of 95.38 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for USFD.
US Foods Holding Risk Analysis
US Foods Holding disclosed 32 risk factors in its most recent earnings report. US Foods Holding reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
US Foods Holding Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $13.68B | 36.68 | 9.05% | ― | 6.20% | -10.58% | |
77 Outperform | $17.08B | 34.42 | 11.16% | ― | 6.32% | 5.69% | |
74 Outperform | $2.49B | 42.39 | 12.90% | ― | 7.85% | 79.89% | |
74 Outperform | $34.32B | 18.31 | 94.91% | 2.87% | 3.55% | -5.79% | |
64 Neutral | $8.59B | 14.59 | 4.82% | 173.89% | 3.27% | 2.73% | |
63 Neutral | $643.75M | 2,186.21 | 0.04% | 4.59% | -2.66% | 8.18% | |
63 Neutral | $1.72B | ― | -4.94% | ― | 4.73% | 29.70% |
* Consumer Defensive Sector Average
Performance Comparison
USFD
US Foods Holding
75.80
20.88
38.02%
SPTN
SpartanNash Co
19.44
-0.67
-3.33%
SYY
Sysco
72.35
-1.82
-2.45%
CHEF
The Chefs' Warehouse
64.05
24.53
62.07%
UNFI
United Natural Foods
30.57
19.53
176.90%
PFGC
Performance Food Group
88.13
14.06
18.98%
US Foods Holding Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: 9.66%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong profitability growth and consistent market share gains despite external challenges like severe weather and a challenging macro environment. The authorization of a $1 billion share repurchase program and improvements in service levels and employee retention further contributed to a positive outlook. However, there were challenges, including weather impacts, chain restaurant volume declines, and difficulties in selling CHEF'STORE.Q1-2025 Updates
Positive Updates
Strong Profitability Despite Challenges
Adjusted EBITDA grew more than 9% and adjusted diluted EPS increased 26% despite the challenging operating environment and severe weather-related headwinds.
Consistent Market Share Gains
US Foods delivered 16 consecutive quarters of gains with independent restaurants and 18 consecutive quarters with health care.
$1 Billion Share Repurchase Program
The Board authorized a new $1 billion share repurchase program, building upon a cumulative buyback of more than 24 million shares since late 2022.
Record Performance in Healthcare and Hospitality
Healthcare business grew 6.1% and hospitality grew 3.6%, with strong new business wins in both sectors.
Enhanced Service Levels
On-time delivery and service levels are at the best since 2019, with Ops QC metric improving approximately 20% from the prior year.
Innovative AI Tools
Launch of generative AI automatic order guide for sellers to improve efficiency in creating customer proposals and onboarding new business.
Improved Employee Retention
Annualized selector turnover improved by approximately 20 percentage points and driver turnover improved by low single-digits over the prior year.
Negative Updates
Impact of Severe Weather
Independent case growth was impacted by severe weather, including wildfires in LA, leading to a net headwind of approximately 160 basis points.
Chain Restaurant Volume Decline
Chain restaurant volume declined 4.3%, broadly in line with industry foot traffic, which was down 3% for the first quarter.
Challenges in Selling CHEF'STORE
Current macro environment is not conducive to completing a transaction for CHEF'STORE at an appropriate valuation.
Company Guidance
During the US Foods Holding Corp First Quarter 2025 Earnings Call, CEO Dave Flitman highlighted key metrics and provided guidance for fiscal 2025. The company reported strong performance with adjusted EBITDA growing over 9% and adjusted diluted EPS increasing by 26%. The Board authorized a new $1 billion share repurchase program, building on $1.3 billion in cumulative buybacks since late 2022. Total volume increased by 1.1% with independent restaurant case growth of 2.5%, while healthcare and hospitality grew 6.1% and 3.6%, respectively. Despite severe weather, US Foods maintained a positive outlook, projecting independent case growth of 2% to 5% for the full year. The company emphasized its resilience and strategic focus on profitable growth, targeting a 5% sales CAGR and 10% adjusted EBITDA CAGR through 2027, with a 20% adjusted EPS CAGR.US Foods Holding Corporate Events
Executive/Board Changes
US Foods Appoints New Principal Accounting Officer
Neutral
May 7, 2025
On May 7, 2025, US Foods Holding Corp. appointed AnnMarie Lobred as the Principal Accounting Officer, succeeding Dirk Locascio who will continue as Executive Vice President and Chief Financial Officer. Lobred, who joined the company in January 2025, brings over 30 years of accounting experience, including leadership roles at Performance Food Group Company and PricewaterhouseCoopers, and will maintain her current compensation package.
Spark’s Take on USFD Stock
According to Spark, TipRanks’ AI Analyst, USFD is a Outperform.
US Foods Holding is in a robust financial position with strong revenue growth and stable cash flows. The company’s strategic initiatives and positive earnings guidance suggest promising future growth. However, the stock’s high valuation and technical indicators imply cautious optimism. Despite some macroeconomic challenges, the company’s consistent market share gains and cost-saving measures support a favorable outlook.
To see Spark’s full report on USFD stock, click here.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.