📊 LII Key Takeaways
Is Lennox International Inc. (LII) a Good Investment?
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.
Lennox delivers exceptional profitability and cash generation despite a slight revenue decline, evidenced by a 20% operating margin and a 12% FCF margin. Strong ROE/ROA and high interest coverage suggest durable competitive positioning and disciplined capital use. Near-term growth softness appears cyclical; maintaining margins and cash conversion would support continued fundamental strength.
Why Buy Lennox International Inc. Stock? 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
- Industry-leading operating margin and net margin
- Strong free cash flow conversion and double-digit FCF margin
- High ROE/ROA with robust interest coverage
LII Stock Risks: Lennox International Inc. Investment Risks
- 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
- Cyclical exposure to housing/HVAC replacement driving revenue softness
- Low quick ratio and minimal cash balance increase liquidity sensitivity
- Input cost and regulatory changes could pressure margins
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
- YoY revenue growth
- Gross margin
Lennox International Inc. (LII) Financial Metrics & Key Ratios
💡 AI Analyst Insight
Lennox International Inc. presents a mixed fundamental picture. Review the detailed metrics above to form your own investment thesis.
LII Profit Margin, ROE & Profitability Analysis
LII vs Market Sector: How Lennox International Inc. Compares
How Lennox International Inc. compares to Market sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Lennox International Inc. Stock Overvalued? LII Valuation Analysis 2026
Based on fundamental analysis, Lennox International Inc. has mixed fundamental signals relative to the Market 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.
Lennox International Inc. Balance Sheet: LII Debt, Cash & Liquidity
LII Revenue & Earnings Growth: 5-Year Financial Trend
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 Revenue Growth, EPS Growth & YoY Performance
LII Quarterly Earnings & 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.
Lennox International Inc. Dividends, Buybacks & Capital Allocation
LII SEC Filings: Latest 10-K & 10-Q 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 a Combined AI Rating of BUY from Claude (HOLD) and ChatGPT (BUY) with 73% combined 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. ChatGPT: Industry-leading operating margin and net margin. Strong free cash flow conversion and double-digit FCF margin.
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. ChatGPT: Cyclical exposure to housing/HVAC replacement driving revenue softness. Low quick ratio and minimal cash balance increase liquidity sensitivity.
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 BUY rating with 73% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. 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 BUY 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 Market stocks?
Vs Default sector averages: Net margin 15.5% (avg: 12%), ROE 69.3% (avg: 15%), current ratio 1.60 (avg: 1.8).
Why is LII's return on equity (ROE) so high?
Lennox International Inc. has a return on equity of 69.3%, significantly above the Market sector average of 15%. A high ROE indicates the company is efficient at generating profits from shareholder equity. This is supported by a 15.5% net margin.