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Floor & Decor Holdings Inc

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Floor & Decor Holdings Inc AI Insights

Informational only. Not investment advice.
As of 2026-02-20

Snapshot

  • Gross margin 43.6% TTM vs industry median 35% - 25% premium reflects warehouse model pricing power in specialty flooring[Gross Margin TTM]
  • CapEx 336M TTM (7.2% of revenue) consuming 94% of operating cash flow - FCF only 23M despite 518M EBITDA[Capital Expenditure TTM]
  • Inventory 1.16B (25% of revenue) with 47M increase - working capital intensive model requires monitoring[Inventory]

Watch Triggers

  • ROIC TTM: Rises above 8%Would signal new stores reaching maturity and earning above cost of capital
  • Free Cash Flow TTM: Turns negative or CapEx exceeds operating cash flowWould indicate growth strategy straining balance sheet
  • Inventory: Growth exceeds revenue growth by >5%Signals demand weakness or buying missteps in flooring cycle

Bull Case

Gross margin 43.6% (25% above industry) with operating margin 6.6% (2x median) shows scalable model - as CapEx normalizes, FCF should expand materially

Gross Margin TTMOperating Margin TTMCapital Expenditure TTM

Debt/equity 0.84 with only 3M interest expense TTM provides capacity to fund growth without dilution

Debt to EquityInterest Expense TTM

Bear Case

EPS growth -3% 5Y CAGR vs industry +12% median - growth investments destroying value if new stores underperform

EPS Growth 5yrROIC TTM

P/E 34.5x (48% premium to industry 23x) prices in perfect execution on store rollout with no margin for error

PE RatioPS Ratio

Bull vs Bear Balance

AI-generated sentiment analysis based on fundamental metrics and market conditions.

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Forward Thesis

Store expansion will compress FCF for 2-3 years before inflecting as new locations mature

1-3ymed
  • CapEx 7.2% of revenue vs 2.4% industry median
  • PPE 3.5B indicates heavy store buildout
  • Operating margin 6.6% has room to expand with scale
FCF 23M TTM vs 360M operating cash flowROIC 5.3% below cost of capital suggests immature storesGross margin 43.6% proves unit economics work

Valuation Context

Caveats

Data Partners
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Fundamental company data provided by Morningstar, updated daily.

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