LGRO Level Four Large Cap Growth Active ETF

Level Four Large Cap Growth Active ETF (LGRO) currently reports 49 stock positions (subject to change), placing it in the mid-range in diversification range by holdings breadth. The top line-up is MSFT (7.09%), AAPL (6.48%), AMZN (4.83%), with MSFT as the largest single weight at 7.09%. Together, the top three holdings account for 18.40%, which implies a more democratized weight structure where the broader holding set matters as much as the leadership group. This structure gives the portfolio a dual character: meaningful exposure to its highest-conviction names, alongside enough breadth to dampen idiosyncratic noise.

Examining the portfolio through a capital allocation lens, ROIC is 32.80%, WACC is 10.61%, and the economic spread is 22.19%. On balance, the spread between ROIC and WACC is solidly positive — reinvestment is adding value rather than diluting it. Supporting metrics show ROE at 42.00% and ROA at 11.48%, a combination that helps frame whether profitability strength is broad enough to hold through different market conditions. Taken together, the return profile suggests a portfolio with credible compounding capacity if current operating execution persists.

Multiple analysis puts the portfolio at trailing P/E of 15.85, forward P/E of 21.21, PEG of 1.73. Trailing and forward multiples are nearly identical, indicating the market is pricing the portfolio on a relatively static earnings assumption. On a PEG basis, valuation is in the middle ground — fair for the growth on offer, with the return case resting on earnings delivery rather than re-rating. The aggregate current ratio of 1.97 reflects a holding set with workable near-term liquidity positions. The combined valuation and liquidity profile points to a portfolio where current prices embed meaningful growth expectations, and where delivery against those expectations will drive the return outcome.

From gross to free cash flow, gross margin sits at 54.72%, operating margin at 12.18%, and free cash flow margin at 23.50%. At this gross margin level, the holdings demonstrate adequate production efficiency without commanding premium pricing. Operating margins are thin enough to warrant attention — businesses at this level are more exposed to cost inflation. The portfolio's FCF margin is above average, pointing to holdings with efficient capital deployment and durable cash generation. The margin profile warrants careful consideration — businesses with compressed margins have less room to absorb cost pressure or revenue softness.

Combining revenue momentum with analyst targets, the estimated 12-month price change of 14.56%, where consensus expectations favor gradual appreciation over the next year, while TTM revenue growth of 26.28% reflecting top-line acceleration that, if sustained, supports the forward earnings case. Separating operating reality from market-implied expectations is useful here — they can diverge meaningfully when sentiment shifts. The forward return case hinges on whether the operating reality stays close enough to analyst assumptions for those targets to remain credible. The estimated 12-month price change is a weighted composite of analyst price target estimates adjusted by each holding's ETF weight, sourced from publicly available data, and should not be interpreted as a reliable prediction of future performance.

The fundamental case holds up across most key dimensions — the combination of positive economic spread, reasonable valuation, and analyst support is constructive.

The views expressed above are derived from quantitative data only and should not be relied upon as financial advice. Investment decisions should be based on your own research and risk tolerance.