Whirlpool has gotten torched over the last six months - since February 2026, its stock price has dropped 54.4% to $39.43 per share. This may have investors wondering how to approach the situation.
Is now the time to buy Whirlpool, or should you be careful about including it in your portfolio? Check out our in-depth research report to see what our analysts have to say, it’s free.
Why Do We Think Whirlpool Will Underperform?
Even with the cheaper entry price, we’re sitting this one out for now. Here are three reasons you should be careful with WHR, plus one stock we’d rather own.
1. Revenue Spiraling Downwards
Examining a company’s long-term performance can provide clues about its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last five years, Whirlpool’s demand was weak and its revenue declined by 7.3% per year. This was below our standards and signals it’s a low quality business.
2. EPS Trending Down
We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
Sadly for Whirlpool, its EPS declined by 38.4% annually over the last five years, more than its revenue. This tells us the company struggled because its fixed cost base made it difficult to adjust to shrinking demand.
3. High Debt Levels Increase Risk
As long-term investors, the risk we care about most is the permanent loss of capital, which can happen when a company goes bankrupt or raises money from a disadvantaged position. This is separate from short-term stock price volatility, something we are much less bothered by.
Whirlpool’s $8.06 billion of debt exceeds the $1.24 billion of cash on its balance sheet. Furthermore, its 9× net-debt-to-EBITDA ratio (based on its EBITDA of $781 million over the last 12 months) shows the company is overleveraged.
At this level of debt, incremental borrowing becomes increasingly expensive and credit agencies could downgrade the company’s rating if profitability falls. Whirlpool could also be backed into a corner if the market turns unexpectedly – a situation we seek to avoid as investors in high-quality companies.
We hope Whirlpool can improve its balance sheet and remain cautious until it increases its profitability or pays down its debt.
Final Judgment
We cheer for all companies making their customers lives easier, but in the case of Whirlpool, we’ll be cheering from the sidelines. After the recent drawdown, the stock trades at 12× forward P/E (or $39.43 per share). This valuation multiple is fair, but we don’t have much confidence in the company. There are more exciting stocks to buy at the moment. We’d recommend looking at a dominant aerospace business that has perfected its M&A strategy.
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