LA-Z-BOY INCORPORATED (LZB): what the price assumes
boothcheck covers LA-Z-BOY INCORPORATED (LZB) but does not put one priced-in number on it: here the defensible answer is the evidence rather than a point estimate. boothcheck publishes no house fair value, target price, or buy/sell rating. Narrative composed 2026-06-27.
Generated: 2026-08-10 · Exported: 2026-08-12 · Source: https://boothcheck.com/report/LZB
Headline
| Field | Value |
|---|---|
| Ticker | LZB |
| Company | LA-Z-BOY INCORPORATED |
| Current price | $41.45/sh |
| Composition | Upholstered Furniture 79% / Casegoods Furniture 5% / Delivery 8% / Other 8% |
What The Price Assumes (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin (value-band context) | 2.0% |
| Operating margin today | 6.1% |
| Margin compression (value-band) | -4.1pp |
| Multiple paid | 13x operating income |
The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.
The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.
Solve inputs: computed at a 7.7% cost of capital with 4% terminal growth over a 5-year stage.
Reconcile: at the x-ray's 9.3% required return this reads ~2.9%/yr; the models below use their own rates.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.71σ |
| cohort percentile (of 214 peers) | 25 |
| implied end-window share | 0% |
Valuation X-Ray
The price is justified by relative-multiple and growth-DCF.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.46x | 5 | expensive |
| Earnings | 1.47x | 5 | expensive |
| Relative | 0.71x | 2 | justifies |
| Growth | 0.85x | 3 | justifies |
Families that justify the price: Relative, Growth
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 6.9%); the inversion above states its own rate.
Per-Model Detail (n=15)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $51.09 | 0.81x | yes | FCF base $0.1B, growth 1% (input: historical growth), terminal g 0.8%, WACC 6.9%, 5yr projection |
| DCF Exit Multiple | Growth | $48.94 | 0.85x | yes | Exit EV/EBITDA: 8.8x / 10.8x / 12.8x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | — | — | no | P/E 20x (static sector reference · 2026-04), scenarios: 17.0x / 20.0x / 23.0x (bear / base = reference held flat / bull), EV/EBITDA 13x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $27.63 | 1.50x | yes | BV/sh $26.32, ROE (TTM) 9.7%, ke 9.3% |
| Two-Stage Excess Return | Asset | $28.30 | 1.46x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $30.39 | 1.36x | yes | Rev $2.1B, growth 1% (input: historical growth; tapered), Terminal P/S: 0.7x / 0.8x / 0.9x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $48.55 | 0.85x | yes | EPS $2.47, growth 20% (input: historical EPS growth), PEG=0.83 (Undervalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $45.38 | 0.91x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.17B × (1−22%) / WACC 6.9% → EPV (no growth) |
| Residual Income | Asset | $28.42 | 1.46x | yes | BV $26.32 + 5yr PV of (ROE (TTM) 9.7% − Kₑ 9.3%) × BV; BV grows 6.3%/yr |
| Graham Number | Asset | $38.24 | 1.08x | yes | √(22.5 × EPS $2.47 × BVPS $26.32) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | — | — | no | EBITDA $0.18B × sector EV/EBITDA 13.0x |
| FCF Yield | Earnings | $28.14 | 1.47x | yes | FCF $127.8M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $23.89 | 1.74x | yes | SBC-adj FCF $0.11B (FCF $0.13B − SBC $0.02B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $79.70 | 0.52x | yes | EPS $2.47 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $9.42 | 4.40x | yes | BV $26.32 × (ROIC 2.5% / WACC 6.9%) |
| P/Sales Sector | Relative | — | — | no | Revenue $2.13B × sector P/S 1.5x |
| PEG Fair Value | Relative | $72.82 | 0.57x | yes | EPS $2.47 × (PEG 1.5 × growth 19.7% (input: historical EPS growth)) → PE 29.5x |
| Earnings Yield | Earnings | $26.70 | 1.55x | yes | EPS $2.47 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Economic-Unit Decomposition (Sum Of The Parts)
One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.
| Unit | Role | Valuation basis | Revenue | Reported profit | Value evidence | Status |
|---|---|---|---|---|---|---|
| Wholesale | operating | enterprise | $1.0b | — | withheld | unresolved no unit value |
| Retail | operating | enterprise | $950.7m | — | withheld | unresolved no unit value |
| Corporate & Other | operating | enterprise | $137.2m | — | withheld | unresolved no unit value |
No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.
Solvency
| Field | Value |
|---|---|
| Net cash | $301.0m |
| Net debt / NOPAT (after-tax) | -2.97x (net cash) |
| Net debt / operating income (pre-tax) | -2.33x (net cash) |
| Interest coverage | 246.6x |
| Share count CAGR (buyback) | -1.4% |
| Burning cash | no |
Bullet Takeaways
At $39.61 the price does not need heroic growth. The valuation methods that work for a cyclical, asset-backed manufacturer land above the price, and the company carries essentially no debt: gross debt of about $2 million against net cash of roughly $301 million.
The fiscal 2026 fourth quarter (reported June 2026) delivered adjusted EPS of $1.26 against a $0.82 estimate, with company-owned retail written sales up 11%, even as the broader furniture category fell low to mid single digits.
The real fragility is operating leverage, not the balance sheet. Margins swing hard on volume, and fiscal 2027 first-quarter guidance points to an adjusted operating margin of just 4.0% to 5.5% in the seasonally weak quarter against soft housing and furniture demand.
Bull Case
Begin with the bear's strongest argument, because it is the obvious one: furniture is a deeply cyclical, big-ticket discretionary purchase tied to housing turnover, and the category is soft. The furniture market declined low to mid single digits in the most recent quarter, and management's fiscal 2027 first-quarter guidance calls for an adjusted operating margin of only 4.0% to 5.5% in what it labels its seasonally weakest period. If the worry is that a downturn in housing crushes a furniture maker, that worry is real and the company is not pretending otherwise. The question is whether the data shows La-Z-Boy actually breaking under it.
The data says it is not breaking, it is taking share. Fiscal 2026 fourth-quarter sales were $570 million, flat against the prior year while the category fell, and company-owned retail written sales rose 11%. Adjusted earnings of $1.26 per share crushed the $0.82 consensus, sending shares up about 25% after the print. The company's vertical integration is doing real work here: roughly 90% of product is made in the United States, which insulates it from the import tariffs hitting competitors and lets it hold volume after a tariff-driven price increase. The FY2025 10-K describes the manufacturing base directly, noting the company uses "various types of wood, fabrics, leathers" in producing furniture (FY2025 10-K, accession 0000057131-25-000029), the kind of domestic supply chain that becomes an advantage when trade costs rise on rivals.
The balance sheet turns a cyclical name into a survivor that compounds through the cycle. La-Z-Boy carries net cash of about $301 million against gross debt of roughly $2 million, with interest coverage that is effectively unconstrained. It is buying back stock, with the share count shrinking at about 1.4% a year. The 10-K shows the contract-liability cushion of customer deposits and deferred revenue, with the company recognizing $116.6 million of revenue tied to its prior-year contract-liability balance (FY2025 10-K, accession 0000057131-25-000029). A debt-free, cash-generative, vertically integrated brand that grows its owned-retail orders while the category shrinks is the opposite of a fragile cyclical, and the valuation methods that fit it land above today's price.
Bear Case
The fragility in this business does not live on the liability side of the balance sheet, where La-Z-Boy is nearly debt-free, it lives in the operating leverage that turns flat sales into sharp margin swings. Fixed manufacturing and retail costs mean that when volume softens, margin falls faster than revenue. Management's own fiscal 2027 first-quarter guidance shows the mechanism: an adjusted operating margin of just 4.0% to 5.5%, well below the high-single-digit levels the business hits in better quarters. The priced-in read holds the terminal operating margin near 2% on the conservative basis, which is the market acknowledging that the company's margin is structurally thin and demand-dependent, not durable.
The demand backdrop is the lever that controls that margin, and it is unfavorable. Furniture is among the most postponable purchases a household makes, and the category fell low to mid single digits in the latest quarter as housing activity stayed soft. The FY2025 10-K is candid about the competitive squeeze, warning that "changes in pricing and promotional activities of competitors may adversely affect our performance" and that "due to the large number of competitors and their wide range of product offerings, we may not be able to differentiate our products" (FY2025 10-K, accession 0000057131-25-000029). A flat-sales quarter that beats was still a flat-sales quarter, and the beat leaned on favorable discrete tax items worth roughly $0.16 of EPS.
Input costs are the second structural pressure. The 10-K warns that fluctuations in the "price, availability and quality of raw materials could cause delays" and "have increased, and could continue to increase, our cost and therefore decrease our earnings" (FY2025 10-K, accession 0000057131-25-000029). The same domestic manufacturing that shields La-Z-Boy from finished-goods tariffs still exposes it to tariffs on imported materials and to wage inflation. The portfolio is also being reshaped under pressure, with the planned closure of a U.K. plant and the divestiture of the Kincaid and American Drew casegoods lines, restructuring that signals parts of the business are not earning their keep. The price is not demanding much, but it is demanding that a thin-margin cyclical hold its line through a soft housing cycle, and the margin guidance says that line is being tested right now.
Valuation
The valuation is built around an asset-backed cyclical, and the families mostly agree the price is reasonable. Against the $39.61 price (June 27, 2026), the relative-multiple and growth-DCF families land at or above the price, the asset family sits modestly above, and the blended X-ray figure across six applicable methods lands near $47.71. The priced-in characterization is within range: the price is justified by peer multiples and a forward-DCF read, which is what you want to see on a name where book value and earnings power both contribute.
The priced-in math is undemanding on growth but honest about margin. The model does not need to solve for an aggressive growth rate to support the price, and it holds a conservative terminal operating margin near 2%, against a current trailing margin around 6%. That gap is the cyclical discount built into the read: the market is pricing the business closer to a trough margin than a peak one, which leaves room to the upside if demand normalizes and downside protection if it does not. The contract-liability balance disclosed in the 10-K, customer deposits and deferred revenue recognized into the following year (FY2025 10-K, accession 0000057131-25-000029), is real forward demand already booked.
The balance sheet removes the usual cyclical-equity risk. Net cash is about $301 million against gross debt near $2 million, and interest coverage is effectively unlimited, so there is no solvency question to discount. With shares shrinking through buybacks and the methods clustered above the price, the valuation rewards patience more than it demands optimism.
Catalysts
The fiscal 2026 fourth quarter (ended April 25, 2026, reported June 17, 2026) was the dominant recent catalyst. Sales of $570 million were flat year over year while the furniture category declined, adjusted EPS of $1.26 beat the $0.82 consensus by a wide margin, and the stock jumped about 25% after hours. Company-owned retail written sales rose 11%, and GAAP operating margin improved to 7.2% with adjusted margin at 9.9%, both helped by roughly $0.16 of favorable discrete tax items. The print was a clear demonstration that the brand is outgrowing a shrinking category.
The forward guidance sets the near-term tension. For the fiscal 2027 first quarter, the seasonally weakest period, La-Z-Boy guided revenue to $490 million to $510 million with an adjusted operating margin of 4.0% to 5.5%, against soft housing data and furniture demand. The National Association of Realtors forecasts roughly a 14% increase in nationwide home sales for 2026, which would be a tailwind if it materializes, since furniture demand tracks housing turnover. The next several prints will show whether the retail momentum holds as the housing signal develops.
The portfolio reshaping is the structural catalyst to track. La-Z-Boy is closing its U.K. manufacturing facility, completed the sale of the Kincaid upholstery business, and signed a letter of intent to sell its wholesale casegoods lines (American Drew and Kincaid). The CEO's Century Vision strategy of direct-to-consumer expansion and operational efficiency is the framework behind these moves. Analyst sentiment has turned incrementally bullish, with a majority of covering analysts at Buy or equivalent, and ongoing buybacks remain a steady support under the share count.
Peer Cohorts (Per Segment, With Filing Citations)
Wholesale / Corporate & Other (reported)
- RH (RH)
- FY2025 10-K: 28849 rh:RealEstateLoansMember 2025-02-01 0001528849 rh:RealEstateLoansMember 2024-02-03 0001528849 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2024-02-04 2025-02-01 0001528849 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-01-29 2024-02-03 0001528849 us-gaap:AccumulatedOtherComprehensiveIncomeMember…
- FY2025 10-K: 1-30 2023-01-28 0001528849 us-gaap:OtherNoncurrentLiabilitiesMember 2025-02-01 0001528849 us-gaap:OtherNoncurrentLiabilitiesMember 2024-02-03 0001528849 us-gaap:OtherNoncurrentLiabilitiesMember 2023-01-28 0001528849 us-gaap:AdditionalPaidInCapitalMember 2023-01-28 0001528849 srt:ChiefExecutiveOfficerMember…
- WSM (WILLIAMS-SONOMA, INC.)
- FY2025 10-K: -fulfillment hubs. Our vision is to own the home, and the places where our customers work, stay and play. Our products in our portfolio of nine brands - Williams Sonoma, Pottery Barn, Pottery Barn Kids, Pottery Barn Teen, West Elm, Williams Sonoma Home, Rejuvenation, Mark and Graham, and GreenRow - are marketed…
- FY2025 10-K: …earn points for each qualifying purchase. Customers can earn points through spend on both our private label and co-branded credit cards, or can earn points as part of our non-credit card related loyalty program. Points earned through both loyalty programs enable members to receive certificates that may be redeemed on…
- W (WAYFAIR INC.)
- FY2025 10-K: …with annual household incomes typically ranging from $25,000 to over $250,000, and also include businesses, from small startups to global enterprises. Our selections of furniture, décor, housewares and home improvement products appeal to our customers' different tastes, styles, purchasing goals and budgets when…
- FY2025 10-K: …offer a range of supplemental media services in support of a seamless selling experience for suppliers. We also believe providing superior customer service is key to delighting our customers. Our global customer service locations are staffed with over 2,000 full-time highly-trained sales and service employees,…
- SGI (SOMNIGROUP INTERNATIONAL INC.)
- FY2025 10-K: …sales. The Mattress Firm segment sells products through one channel: Direct. The Tempur Sealy North America and Tempur Sealy International segments sell product through two channels: Direct and Wholesale. The Direct channel includes product sales through company-owned stores, e-commerce and call centers. The…
- FY2025 10-K: The Company transfers control and recognizes a sale when the customer receives the product. Each unit sold is considered an independent, unbundled performance obligation. The Company does not have any additional performance obligations other than product sales that are material in the context of the contract. The…
- LEG (LEGGETT & PLATT INC)
- FY2025 10-K: SettledWithCashMember leg:StockBasedRetirementPlansContributionsMember 2023-01-01 2023-12-31 0000058492 leg:SettledWithStockMember leg:DeferredStockCompensationProgramMember 2025-01-01 2025-12-31 0000058492 leg:SettledWithCashMember leg:DeferredStockCompensationProgramMember 2025-01-01 2025-12-31 0000058492…
- FY2025 10-K: 2-31 0000058492 us-gaap:OperatingSegmentsMember us-gaap:IntersubsegmentEliminationsMember leg:SpecializedProductsMember 2024-01-01 2024-12-31 0000058492 us-gaap:OperatingSegmentsMember us-gaap:IntersubsegmentEliminationsMember leg:FurnitureFlooringAndTextileProductsMember 2024-01-01 2024-12-31 0000058492…
- TILE (INTERFACE INC)
- FY2025 10-K: …Contents A reconciliation of the Company's total operating segment assets to the corresponding consolidated amounts follows: End of Fiscal Year 2025 2024 (in thousands) Assets AMS $ 660,189 $ 644,085 EAAA 619,663 587,639 Total segment assets 1,279,852 1,231,724 Corporate assets 98,853 111,761 Eliminations ( 172,183 )…
- FY2025 10-K: …0000715787 2025 FY false P10Y P3Y P3Y P3Y P10Y http://fasb.org/us-gaap/2025#PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortization http://fasb.org/us-gaap/2025#PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortization…
Retail (reported)
- RH (RH)
- FY2025 10-K: . The database, which is maintained in accordance with our privacy policy disclosed on our website, supports our ability to analyze our customers' buying behaviors across sales channels, facilitates the development of targeted marketing strategies, and supports prospecting new customers. We segment our customer files…
- FY2025 10-K: …to life. Second, we will continue to develop and open larger bespoke Design Galleries in the top metropolitan markets, similar to those we opened in New York, Chicago and San Francisco. These iconic locations reinforce our long-term competitive advantage and establish a market presence that we believe is difficult to…
- WSM (WILLIAMS-SONOMA, INC.)
- FY2025 10-K: …national, regional and local businesses that utilize a similar retail store strategy, as well as traditional furniture stores, department stores, direct-to-consumer businesses, and specialty stores. The continued sales growth in the e-commerce industry has encouraged the entry of many new competitors, including…
- FY2025 10-K: …of sufficient quantities of commercial-grade products. Additionally, as our business-to-business division is dependent on our customer's business models and their ability to obtain appropriate levels of financing, we face new complexities in managing the impacts of such activities. We continually analyze the business…
- W (WAYFAIR INC.)
- FY2025 10-K: …with annual household incomes typically ranging from $25,000 to over $250,000, and also include businesses, from small startups to global enterprises. Our selections of furniture, décor, housewares and home improvement products appeal to our customers' different tastes, styles, purchasing goals and budgets when…
- FY2025 10-K: …that reflect our online breadth. These physical retail stores are designed to strengthen our brands, deepen customer engagement, and enhance the end-to-end shopping experience. As of December 31, 2025, we operated 12 physical retail stores, excluding outlet locations, across 4 states in the United States ("U.S.").…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.