Start here if you're new
what it is
Lennox makes heating, cooling, and refrigeration gear for homes and commercial buildings.
how it gets paid
Last year Lii made $5.2B in revenue.
why it's growing
Revenue grew 334.8% last year. Revenue was $1.2B, versus $1.3B expected. Gross margin held at 32.6%, so the miss was more about volume than a full collapse.
what just happened
LII missed with $4.06 EPS against $7.2 expected.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
90/100 earnings predictability — you can trust these numbers
21.5x trailing p/e — priced about right
1.1% dividend yield — cash in your pocket every quarter
29.5% return on capital — every dollar works hard here
xvary composite: 62/100 — average
What they do
Lennox makes heating, cooling, and refrigeration gear for homes and commercial buildings.
67% of 2024 sales came from Home Comfort Solutions, versus 33% from Building Climate Solutions. Replacement demand (your old unit dies and you replace it) keeps the business alive when housing is messy. You are buying necessity, not a trend.
How they make money
$5.2B
annual revenue · their business grew +334.8% last year
total revenue
$5.2B
+334.8%
The products that matter
makes heating and cooling equipment
HVAC and Refrigeration Equipment
$5.2B revenue · 100% of the business shown here
it's the whole $5.2B revenue base and it grew 29.9% last year. if you own LII, you are not betting on a side project — you are betting on this category staying healthy.
the entire story
parts and accessories expansion
NSI parts acquisition
~$225M annual revenue add
management said the NSI parts and accessories deal adds about $225M in annual revenue. that helps scale, but you still need clean integration for the math to matter.
incremental growth
joint venture growth lever
samsung joint venture
next leg, thin detail
the samsung venture is one of the few explicit growth levers management pointed to. the opportunity is real enough to mention, but the public detail on this page is still thin. that's a watch item, not a proven engine.
execution bet
Key numbers
$629
VL target
's 18-month target sits 27% above $495.48. You are paying now for patience.
22.0%
operating margin
Every $100 of sales leaves $22 before interest and taxes. That is a strong cushion for an industrial name.
29.5%
return on capital
Each $100 put into the business has produced $29.50 in operating profit. The market usually pays for that.
1.1%
dividend yield
The payout is small. You own this for earnings, not for income.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 70 / 100
- long-term debt $838M (5% of capital)
- net profit margin 16.1% — keeps 16 cents of every dollar in revenue
- return on equity 36% — $0.36 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in LII 3 years ago → it's now worth $21,190.
The index would have given you $13,920.
source: institutional data · total return
What just happened
missed estimates
LII missed with $4.06 EPS against $7.2 expected.
Revenue was $1.2B, versus $1.3B expected. Gross margin held at 32.6%, so the miss was more about volume than a full collapse.
$1.2B
revenue
$4.06
eps
32.6%
gross margin
the number that mattered
The $4.06 print was 43.6% below the $7.2 estimate.
-
management tempered its 2025 outlook for lennox international in late october.
-
leadership conceded that overall sales at the texas-based hvac maker were likely to decline 1% for the year, versus its previous expectation of a 3% rise in the top line and the outsized 13% growth that the company enjoyed in 2024.
-
at the same time, the executive team lowered its target range for adjusted earnings per share to $22.75–$23.25, implying cost-driven bottom-line growth of 1%–3%, compared to its previous $23.25–$24.25 goal and the 3%–7% advance that it represented.comparisons are a bit easier this year, as lennox gets a full 12-month’s contribution from the parts and accessories business that it acquired from nsi in october.
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that deal alone adds about $225 million in annual revenue to the company’s top line.the hvac maker also stands to benefit from a joint venture with samsung that is set to kick in, as well as from the work down of what recently were bloated inventories within the distributor channel. that said, we do worry about the financial health of households in general and the uncertain prospects for residential construction, given mortgage-rate fluctuations. lennox doesn’t make advanced cooling solutions for the growing number of data centers set to handle massive artificial intelligence workloads. what’s more, management hinted that it’s not likely to pursue the opportunity anytime soon, if at all. subscribers looking for hvac makers with data center exposure should consider aaon, inc. and trane technologies, among others.
-
the company ought to generate a growing amount of excess cash.
source: company earnings report, 2026
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What could go wrong
the #1 risk is softer HVAC demand after management cut its own outlook.
med
demand slowdown sticks
management already said overall sales were likely to decline and lowered adjusted EPS guidance to $22. if that caution is the new baseline, the recovery story gets delayed.
the stock is priced on quality. quality with slower demand still works, but the multiple usually compresses.
med
distributor inventory takes longer to clear
management highlighted the work-down of previously bloated channel inventories. if distributors stay cautious, orders lag even if end demand stabilizes.
that turns a short reset into several slower quarters, which matters when analysts still model $6.0B of revenue.
med
NSI and samsung execution disappoints
the public growth offsets on this page are the ~$225M NSI revenue addition and the samsung joint venture. if those underdeliver, the market loses two of the cleaner reasons to look past the slowdown.
you are left with the legacy HVAC cycle doing all the work — and that is a less exciting setup.
This is still a concentrated story: 100% of the $5.2B revenue base shown on this page ties back to HVAC and refrigeration demand.
source: institutional data · regulatory filings · risk analysis
Pay attention to
earnings
next earnings on april 22, 2026
watch whether management sounds more confident than it did when it cut the outlook to $22 adjusted EPS.
metric
the gap between $22 and $25.60
management's adjusted EPS reset sits below the current full-year estimate. that gap has to close through better results or lower expectations.
trend
distributor inventory normalization
if channel inventories clear, orders recover. if they do not, the slowdown lasts longer than the market wants.
risk
NSI and samsung follow-through
the NSI deal adds about $225M in annual revenue on paper. you want proof that integration and the joint venture are helping in the real business.
Analyst rankings
short-term outlook
average
momentum score 3. in human-speak, analysts are not treating this like a near-term breakout.
risk profile
average
stability score 3 — you are looking at a typical risk profile, not a bunker stock and not a chaos machine.
chart momentum
below average
technical score 4 — the chart says the stock still has work to do after the softer outlook.
earnings predictability
90 / 100
management has earned a reputation for consistency. that is why a guidance cut here carries extra weight.
source: institutional data
Institutional activity
institutions have been net buying for 2 consecutive quarters — 326 buyers vs. 282 sellers in 3q2025. total institutional holdings: 26.2M shares. net buying for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$421
$836
$495
current price
$629
target midpoint · +27% from current · 3-5yr high: $850 (+70% · 15% ann'l return)
Want the deeper analysis?
The full deep dive: dcf model, scenario analysis, competitive moat breakdown, and quarterly tracking — everything on this page, taken further.
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