LNN

We rate LINDSAY CORP (LNN) as a Buy with a composite score of 66.0/100 at a current price of $135.53. The stock scores above average across the majority of our six quantitative factors and ranks #242 out of 7,333 stocks in our universe, reflecting a favorable risk-reward profile.

The rating is primarily driven by strength in value (91th percentile) and stability (88th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (38th percentile) and momentum (45th percentile) tempers our overall conviction. We assign a Narrow Moat rating (46/100), Low uncertainty, and Standard capital allocation.

Key items to watch: quarterly earnings execution and sector-level competitive dynamics. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

LINDSAY CORP holds a top-quartile position (#0 of 50) within the Manufacturing sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 66.0/100 places it at rank #242 in our full 7,333-stock universe. At $1.5B in market capitalization, LINDSAY CORP is a small-cap player in the Manufacturing space, which limits certain scale advantages but may allow for more agile strategic execution.

Revenue is growing at 12%, though momentum at the 45th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.

The margin cascade tells an important story: gross margins of 32% (-10.7pp vs sector) narrow to operating margins of 14% (+12.8pp vs sector) and net margins of 11.7%, yielding a gross-to-net conversion rate of 37%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $135.53, LINDSAY CORP appears undervalued relative to its fundamentals. Our value factor score of 91/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The stock screens as attractively priced on a majority of these measures, suggesting the market may be underappreciating the underlying fundamentals.

The stock currently trades at a P/E of 17.9x (roughly in line with the sector median of 22.3x), EV/EBITDA of 13.1x (near the sector median), P/B of 2.8x, P/S of 2.1x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.

We assign a Low uncertainty rating to LINDSAY CORP. The company exhibits strong financial stability with a beta of 0.75, conservative leverage (22% D/E), and a stability factor in the 88th percentile. The predictable nature of the business model and solid financial position reduce the range of potential outcomes, giving us confidence in our fair value estimate.

We identify no major risk factors at this time. The company's stability factor sits at the 88th percentile with quality at the 84th percentile, both of which support our low-risk assessment. The absence of material leverage, profitability, or volatility concerns reduces the likelihood of a permanent capital loss scenario.

Key risk mitigants include: conservative leverage (22% D/E) limits balance sheet risk; above-average stability (88th percentile) suggests predictable business dynamics. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate LINDSAY CORP's capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 15.4%, and the balance sheet is managed within acceptable parameters (D/E: 22%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; LINDSAY CORP falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. The 1.06% dividend yield provides some income return, but the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.

In summary, LINDSAY CORP receives a Buy rating with a composite score of 66.0/100 (rank #242 of 7,333). Our quantitative framework assigns a Narrow Moat (46/100, trend: stable), Low uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 69/100.

Our analysis supports a constructive view on LINDSAY CORP. The combination of identifiable competitive advantages, low uncertainty, and standard capital allocation creates a risk-reward profile that favors accumulation at current levels. We recommend investors consider adding this name to portfolios aligned with the stock's risk profile.