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MLKN

MillerKnoll NasdaqGS:MLKN Stock Report

Last Price

US$32.70

Market Cap

US$2.5b

7D

4.3%

1Y

-23.0%

Updated

15 Aug, 2022

Data

Company Financials +
MLKN fundamental analysis
Snowflake Score
Valuation6/6
Future Growth3/6
Past Performance0/6
Financial Health2/6
Dividends2/6

MLKN Stock Overview

MillerKnoll, Inc. researches, designs, manufactures, and distributes interior furnishings worldwide.

MillerKnoll Competitors

Price History & Performance

Summary of all time highs, changes and price drops for MillerKnoll
Historical stock prices
Current Share PriceUS$32.70
52 Week HighUS$44.40
52 Week LowUS$25.39
Beta1.22
1 Month Change19.69%
3 Month Change11.04%
1 Year Change-23.00%
3 Year Change-22.73%
5 Year Change0.31%
Change since IPO538.05%

Recent News & Updates

Jul 08

MillerKnoll: Profit Margins Are Continuing To Recover From Inflation's Impact

We believe MillerKnoll shares are extremely cheap, but they come with significant risk, including a weaker balance sheet. Management believes there is a strong possibility that profit margins have hit a bottom, and are now going to trend higher, thanks to supply chain improvements and price increases. Shares are likely to recover quickly if it becomes clear that profit margins can be restored to pre-COVID levels. Shares of MillerKnoll (MLKN) are almost back to its COVID lows despite a booming business posting strong revenue numbers, and a so far successful integration with its large Knoll acquisition. The main reason shares are down so much is that inflation has been eroding profitability, but the company is fighting to get the business back on track with price increases and looking for supply chain improvements. To better appreciate this divergence between revenue and profits, we are graphing trailing twelve months revenue against normalized diluted earnings per share. Most of the revenue growth can be attributed to the Knoll acquisition, but there has been organic revenue growth as well. Despite a booming business, earnings have all but collapsed, and the biggest reason is contracting gross profit margins due to inflation headwinds. Financials So far, MillerKnoll has made good progress towards its goal of delivering $120 million in cost synergies, having captured $66 million in run rate cost synergies at the end of their fiscal 2022. Supply chain mitigation efforts helped return lead times and reliability to near-normal levels for almost all products and geographies. Consolidated net sales in the most recent quarter (Q4) were $1.1 billion, an increase of 77% on a reported basis and 23% organically over the prior year. The international business had a superb performance with record sales of $136 million in the quarter, an increase of 28% over last year on a reported basis and up 37% organically. Demand continued to exceed prior year levels with orders of $1 billion, up 47% over last year and an increase of 4% organically. Inflation continued to eat at profit margins, but there is a clear improvement trend from the trough of ~33% gross profit margin in the previous quarter (Q3). For Q4, gross margin was 34.8%, 160 bps lower than one year earlier. This was primarily due to inflation in the form of higher commodity costs. Fortunately, on a sequential basis, gross margin improved 180 bps, as the company is beginning to see the impact of price increases. The company expects additional improvement as these price increases continue to drive further margin expansion in future quarters. For Q1 2023 the company is guiding to revenue in the range of between $1.08 billion and $1.12 billion, and adjusted earnings per share between $0.32 and $0.38. Profit Margins The best indication so far we have seen from management that they are confident that profit margins will continue to improve as price increases flow through is the answer they gave an analyst during the most recent earnings call (emphasis added): Alex Fuhrman - Analyst It looks like now with the guidance in Q1, several quarters of pretty solid improvement relative to the 33% or so gross margin rate that we saw in the third quarter, I know it's tough to have visibility multiple quarters out and you're only guiding to the one quarter. But just as you think about what you know today given labor costs, material costs, what you've got in terms of already announced price increases that maybe have or haven't been fully realized in your business. I mean should we think of this kind of, call it, 35% or so gross margin that you're guiding to in Q1 as being a base that you would hope to be expanding off of in future quarters? It seems like there are so many dynamics pushing and pulling in both directions. Just curious kind of based on what we know right now, what would you expect the base case on gross margin to be in the second and third quarter of the year? Andrea Owen - CEO I mean, Alex, we definitely expect it to be a base that we expand off of. And I'll caveat that by saying provided nothing else happens in the world that could impact that from a macroeconomic standpoint. But as you look at the price lag, particularly in the contract business, we have not realized all of the price increases that we've put in place yet. We planned for more if we need to, to offset cost increases. So, I think, it's fair to say that's a good base to build off of. Jeff Stutz - CFO Yeah. No. I think that's right, Andi. The only thing I would add is we would be disappointed -- very disappointed if that didn't happen. I said last quarter and I'll say it again, I think our belief is that we've got enough pricing that's been done. And again, we're contemplating the need for potential more. We can get this business back to levels that were at or above pre-COVID and we're nowhere near that right now. And so, we should see a continuous improvement in margin as we move through the balance of the year. We, therefore, expect that as profit margins get back, or exceed, pre-COVID levels, earnings per share should move back up near their previous records, given that sales have not been an issue so far. Balance Sheet The balance sheet is a lot less solid than it used to be before the Knoll acquisition, which had a large cash component. Debt is now at ~$1.4 billion, while cash and short-term investments add up to ~$230 million. We expect the company to put much effort into deleveraging once profitability improves. This should certainly be a priority for the company. ESG During the last earnings call, management made an announcement that they introduced their 2030 sustainability goals in the quarter. These goals are shared across all of their brands. They are targeting reducing their carbon footprint by 50%, designing out waste, and stopping the use of single-use plastics. They also plan to source better materials by using 50% or more recycled content, and purchasing materials that are responsibly and sustainably produced. Valuation Given the current profitability issues due to inflation, it is difficult to value the company using earnings. Using EV/Revenues, shares are trading below their ten-year average, and the forward multiple looks very cheap at ~0.75x.

Shareholder Returns

MLKNUS Commercial ServicesUS Market
7D4.3%2.5%3.6%
1Y-23.0%1.1%-9.6%

Return vs Industry: MLKN underperformed the US Commercial Services industry which returned 0.7% over the past year.

Return vs Market: MLKN underperformed the US Market which returned -10.2% over the past year.

Price Volatility

Is MLKN's price volatile compared to industry and market?
MLKN volatility
MLKN Average Weekly Movement5.7%
Commercial Services Industry Average Movement6.6%
Market Average Movement7.7%
10% most volatile stocks in US Market16.9%
10% least volatile stocks in US Market3.2%

Stable Share Price: MLKN is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: MLKN's weekly volatility (6%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
190511,300Andi Owenhttps://www.millerknoll.com

MillerKnoll, Inc. researches, designs, manufactures, and distributes interior furnishings worldwide. The company operates in four segments: Americas Contract, International Contract, Global Retail, and Knoll. It offers office furniture products under the Aeron, Mirra, Sayl, Embody, Layout Studio, Imagine Desking System, Ratio, Cosm, Tone, and Generation by Knoll names; and other seating and storage products and ergonomic accessories under the About A Chair, Palissade, Eero Saarinen designs, Barcelona, and the Flo monitor arm names.

MillerKnoll Fundamentals Summary

How do MillerKnoll's earnings and revenue compare to its market cap?
MLKN fundamental statistics
Market CapUS$2.47b
Earnings (TTM)-US$27.10m
Revenue (TTM)US$3.95b

0.6x

P/S Ratio

-91.5x

P/E Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
MLKN income statement (TTM)
RevenueUS$3.95b
Cost of RevenueUS$2.59b
Gross ProfitUS$1.35b
Other ExpensesUS$1.38b
Earnings-US$27.10m

Last Reported Earnings

May 28, 2022

Next Earnings Date

n/a

Earnings per share (EPS)-0.36
Gross Margin34.28%
Net Profit Margin-0.69%
Debt/Equity Ratio91.8%

How did MLKN perform over the long term?

See historical performance and comparison

Dividends

2.3%

Current Dividend Yield

-202%

Payout Ratio

Does MLKN pay a reliable dividends?

See MLKN dividend history and benchmarks
When do you need to buy MLKN by to receive an upcoming dividend?
MillerKnoll dividend dates
Ex Dividend DateSep 01 2022
Dividend Pay DateOct 15 2022
Days until Ex dividend15 days
Days until Dividend pay date59 days

Does MLKN pay a reliable dividends?

See MLKN dividend history and benchmarks
We’ve recently updated our valuation analysis.

Valuation

Is MLKN undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

6/6

Valuation Score 6/6

  • Price-To-Sales vs Peers

  • Price-To-Sales vs Industry

  • Price-To-Sales vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for MLKN?

Other financial metrics that can be useful for relative valuation.

MLKN key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue1.1x
Enterprise Value/EBITDA11.6x
PEG Ration/a

Price to Sales Ratio vs Peers

How does MLKN's PS Ratio compare to its peers?

MLKN PS Ratio vs Peers
The above table shows the PS ratio for MLKN vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPSEstimated GrowthMarket Cap
Peer Average1.3x
HNI HNI
0.6x4.2%US$1.5b
MSA MSA Safety
3.6x7.4%US$5.1b
SCS Steelcase
0.5x8.3%US$1.4b
TILE Interface
0.6x3.8%US$772.1m
MLKN MillerKnoll
0.6x7.3%US$2.5b

Price-To-Sales vs Peers: MLKN is good value based on its Price-To-Sales Ratio (0.6x) compared to the peer average (1.3x).


Price to Earnings Ratio vs Industry

How does MLKN's PE Ratio compare vs other companies in the US Commercial Services Industry?

Price-To-Sales vs Industry: MLKN is good value based on its Price-To-Sales Ratio (0.6x) compared to the US Commercial Services industry average (1.5x)


Price to Sales Ratio vs Fair Ratio

What is MLKN's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

MLKN PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio0.6x
Fair PS Ratio1.4x

Price-To-Sales vs Fair Ratio: MLKN is good value based on its Price-To-Sales Ratio (0.6x) compared to the estimated Fair Price-To-Sales Ratio (1.4x).


Share Price vs Fair Value

What is the Fair Price of MLKN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: MLKN ($32.7) is trading below our estimate of fair value ($111.79)

Significantly Below Fair Value: MLKN is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.


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Future Growth

How is MillerKnoll forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


47.3%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MLKN is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.9%).

Earnings vs Market: MLKN is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: MLKN is expected to become profitable in the next 3 years.

Revenue vs Market: MLKN's revenue (7.3% per year) is forecast to grow slower than the US market (7.9% per year).

High Growth Revenue: MLKN's revenue (7.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: MLKN's Return on Equity is forecast to be low in 3 years time (17.4%).


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Past Performance

How has MillerKnoll performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


-33.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: MLKN is currently unprofitable.

Growing Profit Margin: MLKN is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: MLKN is unprofitable, and losses have increased over the past 5 years at a rate of 33% per year.

Accelerating Growth: Unable to compare MLKN's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: MLKN is unprofitable, making it difficult to compare its past year earnings growth to the Commercial Services industry (23.4%).


Return on Equity

High ROE: MLKN has a negative Return on Equity (-1.28%), as it is currently unprofitable.


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Financial Health

How is MillerKnoll's financial position?

Financial Health Score

2/6

Financial Health Score 2/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: MLKN's short term assets ($1.3B) exceed its short term liabilities ($877.4M).

Long Term Liabilities: MLKN's short term assets ($1.3B) do not cover its long term liabilities ($2.1B).


Debt to Equity History and Analysis

Debt Level: MLKN's net debt to equity ratio (76.8%) is considered high.

Reducing Debt: MLKN's debt to equity ratio has increased from 33% to 91.8% over the past 5 years.

Debt Coverage: MLKN's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: MLKN's interest payments on its debt are well covered by EBIT (4x coverage).


Balance Sheet


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Dividend

What is MillerKnoll current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


2.29%

Current Dividend Yield

Upcoming Dividend Payment

TodayAug 16 2022Ex Dividend DateSep 01 2022Dividend Pay DateOct 15 202244 days from Ex DividendBuy in the next 15 days to receive the upcoming dividend

Dividend Yield vs Market

Notable Dividend: MLKN's dividend (2.29%) is higher than the bottom 25% of dividend payers in the US market (1.47%).

High Dividend: MLKN's dividend (2.29%) is low compared to the top 25% of dividend payers in the US market (3.95%).


Stability and Growth of Payments

Stable Dividend: MLKN's dividend payments have been volatile in the past 10 years.

Growing Dividend: MLKN's dividend payments have increased over the past 10 years.


Earnings Payout to Shareholders

Earnings Coverage: MLKN is paying a dividend but the company is unprofitable.


Cash Payout to Shareholders

Cash Flow Coverage: MLKN is paying a dividend but the company has no free cash flows.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

3.6yrs

Average management tenure


CEO

Andi Owen (57 yo)

4yrs

Tenure

US$6,388,353

Compensation

Ms. Andrea R. Owen, also known as Andi, has been Chief Executive Officer, President and Director of MillerKnoll, Inc. (formerly known as Herman Miller, Inc.) since August 22, 2018. Ms. Owen's employment wi...


CEO Compensation Analysis

Compensation vs Market: Andi's total compensation ($USD6.39M) is about average for companies of similar size in the US market ($USD6.53M).

Compensation vs Earnings: Andi's compensation has increased whilst the company is unprofitable.


Leadership Team

Experienced Management: MLKN's management team is considered experienced (3.6 years average tenure).


Board Members

Experienced Board: MLKN's board of directors are seasoned and experienced ( 10.6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: MLKN insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 28.4%.


Top Shareholders

Company Information

MillerKnoll, Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: MillerKnoll, Inc.
  • Ticker: MLKN
  • Exchange: NasdaqGS
  • Founded: 1905
  • Industry: Office Services and Supplies
  • Sector: Commercial Services
  • Implied Market Cap: US$2.466b
  • Shares outstanding: 75.84m
  • Website: https://www.millerknoll.com

Number of Employees


Location

  • MillerKnoll, Inc.
  • 855 East Main Avenue
  • PO Box 302
  • Zeeland
  • Michigan
  • 49464-0302
  • United States

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/08/15 00:00
End of Day Share Price2022/08/15 00:00
Earnings2022/05/28
Annual Earnings2022/05/28


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.