Clorox (CLX): Buy, Sell, or Hold Post Q2 Earnings? Petr Huřťák Mon, October 12, 2026 at 5:19 PM EDT 3 min read CLX +0.66% ^GSPC -0.06% Trade Clorox on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Over the last six months, Clorox's shares have sunk to $83.72, producing a disappointing 19% loss - a stark contrast to the S&P 500's 12.8% gain. This might have investors contemplating their next move.
Even though the stock has become cheaper, we're cautious about Clorox. Here are three reasons you should be careful with CLX, plus one stock we'd rather own.
A company's long-term performance is an indicator of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Clorox's demand was weak over the last three years as its sales fell at a 3.1% annual rate. This was below our standards and is a sign of lacking business quality.
When analyzing revenue growth, we care most about organic revenue growth. This metric captures a business's performance excluding one-time events such as mergers, acquisitions, and divestitures as well as foreign currency fluctuations.
The demand for Clorox's products has been stable over the last eight quarters but fell behind the broader sector. On average, the company has posted feeble year-on-year organic revenue growth of 1.7%.
If you've followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can't use accounting profits to pay the bills.
As you can see below, Clorox's margin dropped by 4.7 percentage points over the last year. If its declines continue, it could signal increasing investment needs and capital intensity. Clorox's free cash flow margin for the trailing 12 months was 6%.
Clorox's business quality ultimately falls short of our standards. Following the recent decline, the stock trades at 14.6× forward P/E (or $83.72 per share). While this valuation is reasonable, we don't really see a big opportunity at the moment. We're pretty confident there are superior stocks to buy right now. Let us point you toward the Amazon and PayPal of Latin America.
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