📊 LII Key Takeaways
Is LII a Good Investment? Thesis Analysis
Lennox demonstrates exceptional profitability with 33.4% gross margins and 69.3% ROE, generating robust free cash flow of $638.8M. However, revenue contraction of 2.7% YoY combined with weak liquidity (34.2M cash, 0.63x quick ratio) and moderate leverage (0.98x D/E) creates balance sheet risk in a capital-intensive business.
Why Buy LII? Key Strengths
- Exceptional return on equity (69.3%) and ROA (19.7%) demonstrate superior capital efficiency
- Strong profitability with 20% operating margin and 15.5% net margin across all profitability tiers
- Robust free cash flow generation ($638.8M FCF, 12.3% FCF margin) with excellent operating cash flow ($757.6M)
- Fortress interest coverage of 25.5x eliminates debt servicing risk
- Adequate current ratio of 1.60x supports operational liquidity needs
LII Investment Risks to Consider
- Revenue declining 2.7% YoY signals demand weakness or market share loss in HVAC/refrigeration sector
- Critical liquidity gap: only 34.2M cash against 1.1B long-term debt and 0.63x quick ratio indicates minimal financial flexibility
- Moderate-to-high leverage (0.98x D/E) combined with declining revenue creates vulnerability to economic downturns or credit tightening
- Capital-intensive business model (118.8M annual CapEx) while managing revenue contraction could pressure future margins
- Total liabilities of 2.9B nearly match total assets of 4.1B, leaving limited equity cushion
Key Metrics to Watch
- Revenue growth trajectory and stabilization - monitor if -2.7% decline continues or reverses
- Operating cash flow trend - ensure 757.6M level is sustainable as revenues shift
- Debt reduction progress and cash balance improvement - track if company prioritizes balance sheet de-leveraging
- Gross margin stability - watch for pricing pressure or input cost inflation given declining topline
LII Financial Metrics
💡 AI Analyst Insight
LENNOX INTERNATIONAL INC presents a mixed fundamental picture. Review the detailed metrics above to form your own investment thesis.
LII Profitability Ratios
LII vs Default Sector
How LENNOX INTERNATIONAL INC compares to Default sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is LII Overvalued or Undervalued?
Based on fundamental analysis, LENNOX INTERNATIONAL INC has mixed fundamental signals relative to the Default sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
LII Balance Sheet & Liquidity
LII 5-Year Financial Trend & Growth Analysis
5-Year Trend Summary: LENNOX INTERNATIONAL INC's revenue has grown significantly by 27% over the 5-year period, indicating strong business expansion. The most recent EPS of $16.58 reflects profitable operations.
LII Growth Metrics (YoY)
LII Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $1.4B | $239.0M | $6.68 |
| Q2 2025 | $1.5B | $245.9M | $6.87 |
| Q1 2025 | $1.0B | $120.3M | $3.37 |
| Q3 2024 | $1.4B | $130.4M | $3.65 |
| Q2 2024 | $1.4B | $217.2M | $6.10 |
| Q1 2024 | $1.0B | $98.0M | $2.75 |
| Q3 2023 | $1.2B | $130.4M | $3.65 |
| Q2 2023 | $1.4B | $177.2M | $4.96 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
LII Capital Allocation
LII SEC 10-K & 10-Q Filing Analysis
Access official SEC EDGAR filings for LENNOX INTERNATIONAL INC (CIK: 0001069202)
📋 Recent SEC Filings
❓ Frequently Asked Questions about LII
What is the AI rating for LII?
LENNOX INTERNATIONAL INC (LII) has an AI rating of HOLD with 72% confidence, based on fundamental analysis of SEC EDGAR filings.
What are LII's key strengths?
Claude: Exceptional return on equity (69.3%) and ROA (19.7%) demonstrate superior capital efficiency. Strong profitability with 20% operating margin and 15.5% net margin across all profitability tiers.
What are the risks of investing in LII?
Claude: Revenue declining 2.7% YoY signals demand weakness or market share loss in HVAC/refrigeration sector. Critical liquidity gap: only 34.2M cash against 1.1B long-term debt and 0.63x quick ratio indicates minimal financial flexibility.
What is LII's revenue and growth?
LENNOX INTERNATIONAL INC reported revenue of $5.2B.
Does LII pay dividends?
LENNOX INTERNATIONAL INC pays dividends, with $173.0M distributed to shareholders in the trailing twelve months.
Where can I find LII SEC filings?
Official SEC filings for LENNOX INTERNATIONAL INC (CIK: 0001069202) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is LII's EPS?
LENNOX INTERNATIONAL INC has a diluted EPS of $22.79.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is LII a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, LENNOX INTERNATIONAL INC has a HOLD rating with 72% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is LII stock overvalued or undervalued?
Valuation metrics for LII: ROE of 69.3% (sector avg: 15%), net margin of 15.5% (sector avg: 12%). Higher ROE suggests strong returns relative to peers.
Should I buy LII stock in 2026?
Our dual AI analysis gives LENNOX INTERNATIONAL INC a combined HOLD rating for 2026. Revenue is data pending, with profitability above sector average. Always conduct your own research.
What is LII's free cash flow?
LENNOX INTERNATIONAL INC's operating cash flow is $757.6M, with capital expenditures of $118.8M. FCF margin is 12.3%.
How does LII compare to other Default stocks?
Vs Default sector averages: Net margin 15.5% (avg: 12%), ROE 69.3% (avg: 15%), current ratio 1.60 (avg: 1.8).