LSB Industries

LXU

Chemicals · Basic Materials

Price

$11.39

+0.32 (+2.89%)

Market Cap

$819.4M

Winston Score

Winston is curious

Mixed quality — meaningful strengths and weaknesses.

Share count rising — dilution

+44.9% over 4y

The company has issued more shares over this period, which dilutes each existing shareholder’s stake.

Diluted shares outstanding: 50.0M (2021) → 72.4M (2025)

LSB Industries makes chemical fertilizers and industrial chemicals at factories in the United States. Its main products are ammonia, urea ammonium nitrate (UAN), and nitric acid, which it sells to farmers, mining companies, and industrial manufacturers. The company is a mid-sized North American producer in the nitrogen chemicals industry, with plants in Oklahoma, Arkansas, and Alabama.

LSB makes money by selling these chemicals directly to customers, so its revenue rises and falls with commodity prices for nitrogen products. It operates entirely in the United States and generates roughly $500–600 million in annual revenue. The company's main competitive advantage is its network of strategically located plants that keep shipping costs low for regional customers. The biggest risk the business faces is the price of natural gas, which is the key raw material used to make nitrogen chemicals — when natural gas prices spike, profit margins can shrink quickly.

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+18.2% YoY

YoY Growth Rate

Steady revenue growth

EPS Growth

>+1,000% YoY

YoY Growth Rate

EPS growth accelerating

R&D Spend

$0/ year

0.0% of revenue

Below sector average (3%)

Research and development spending

Insider Activity

18.1%ownership

Insiders own a meaningful stake in the company

Cash Position

Cash flow positive

$21M cash & investments

Quarterly Free Cash Flow

↓ Burn rate worsening

Company generates more cash than it spends — no dilution risk from fundraising

Growth + cash flow

LSB Industries is a rare growth stock that's already generating positive cash flow while growing at 18%. The Winston Score doesn't fully credit this transition from "burner" to "earner."

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

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Quality

Gross Margin

21.1%

Thin — 21.1% gross margin

Operating Margin

13.0%

Healthy — 13.0% operating margin

ROCE

2.2%

Weak — 2.2% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

+21.5%

Fast-growing sales (21.5% YoY)

EPS YoY

N/A

Data not available

EPS Consistency

6/8 quarters

Earnings grew in most of the last 8 quarters

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Cash Flow

Cash Conversion

306%

Turns 306% of profit into real cash

FCF Margin

4.9%

Thin free cash flow (4.9%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

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Stability

Debt / Equity

0.83

Moderate — manageable debt (0.83)

Interest Cover

2.70x

Tight — interest eats into profit (2.7x)

Interest coverage between 1 and 3. Profits cover interest, but with little room to spare.

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Valuation

P/E Ratio (TTM)

18.1x

Fair value — P/E 18.1

P/E in the normal range. Price is roughly $15 for every $1 of yearly profit.

P/E vs Forward

+3.6

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (18.1 → 14.4)

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Dividends

Not applicable for this business.

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