The Clorox Company CLX
Verdict: Sell. Fair value $94.34 against a price of $101 on 6 Jan 2026, 7% below the price.
In plain words
The case for: Narrow competitive moat provides durability.
The case against: Competitive moat at risk of erosion. Intense competitive pressure could compress margins. Net Income has been extremely volatile ($0.15B in 2023, $0.28B in 2024, $0.81B in 2025) while....
Main risks
- Extremely High Leverage: A Debt-to-Equity ratio of 9.0 and Net Debt/EBITDA of ~3.4x indicate significant financial risk and a fragile balance sheet with a very small equity buffer ($0.32B).
- Stagnant to Declining Revenue: TTM revenue of $6.77B is below the last four annual figures, and the 3-year CAGR is negative, indicating a lack of growth and potential market share erosion.
- Thin Equity Base: Stockholders' Equity of only $320M against $5.56B in assets makes the company highly vulnerable to asset write-downs or operational shocks, which could wipe out equity.
- Net Income has been extremely volatile ($0.15B in 2023, $0.28B in 2024, $0.81B in 2025) while...
- In FY2023, Operating Cash Flow ($1.16B) was over 7 times higher than Net Income ($0.15B). In...
- Intense competitive environment