Should you buy MillerKnoll stock?
- 7 months ago
MillerKnoll stock analysis. MLKN stock.
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Furniture company MillerKnoll was created in 2021 from the combination of Herman Miller and Knoll. The combined business includes many high end office furniture brands.
The business has had a difficult couple of years dealing first with COVID and then supply chain disruptions.
The pandemic caused a shift in work-from-home trends which is not ideal for an office furniture company like MillerKnoll. More recently, companies have been laying off workers and there’s concern about the commercial real estate sector. Neither are good for office furniture sales.
As you can see from the latest sales trends, orders are not showing much sign of growth and gross margins at 35% remain below pre pandemic levels.
Right now, the company has a market cap of 1.3 billion. But with 1.4 billion of debt, the enterprise value is roughly 2.5 billion.
Revenue over the last 12 months got a boost from the Knoll acquisition and sits at 4.2 billion.
Meanwhile, net income was 68 million. So Millerknoll is currently valued at 0.6 times revenue or 15 times earnings.
Long term debt of 1.4 billion is 2.6 times ebitda so the company not only needs to manage sales but keep up with debt repayments.
And CEO Andi Owen came under pressure last week after a leaked Zoom call showed her telling employees to forget about bonuses and to leave ‘pity city’.
This is not a good look and signals potential mismanagement.
However, the valuation applied to MillerKnoll looks too cheap.
You can see that the stock is only just above its COVID lows and the price to sales ratio is below the bottom of its historical average.
#stocks #investing #stockstobuy #overlookedalpha
Visit our Substack for more: https://www.overlookedalpha.com
Furniture company MillerKnoll was created in 2021 from the combination of Herman Miller and Knoll. The combined business includes many high end office furniture brands.
The business has had a difficult couple of years dealing first with COVID and then supply chain disruptions.
The pandemic caused a shift in work-from-home trends which is not ideal for an office furniture company like MillerKnoll. More recently, companies have been laying off workers and there’s concern about the commercial real estate sector. Neither are good for office furniture sales.
As you can see from the latest sales trends, orders are not showing much sign of growth and gross margins at 35% remain below pre pandemic levels.
Right now, the company has a market cap of 1.3 billion. But with 1.4 billion of debt, the enterprise value is roughly 2.5 billion.
Revenue over the last 12 months got a boost from the Knoll acquisition and sits at 4.2 billion.
Meanwhile, net income was 68 million. So Millerknoll is currently valued at 0.6 times revenue or 15 times earnings.
Long term debt of 1.4 billion is 2.6 times ebitda so the company not only needs to manage sales but keep up with debt repayments.
And CEO Andi Owen came under pressure last week after a leaked Zoom call showed her telling employees to forget about bonuses and to leave ‘pity city’.
This is not a good look and signals potential mismanagement.
However, the valuation applied to MillerKnoll looks too cheap.
You can see that the stock is only just above its COVID lows and the price to sales ratio is below the bottom of its historical average.
#stocks #investing #stockstobuy #overlookedalpha