On July 19, 2023, VF Corp (VFC, Financial) experienced a price change of 4.92%, with its stock trading at $20.46. This change in stock price is noteworthy for investors considering the company's market cap of $8 billion and sales of $11.6 billion. The GF Value of VF Corp stands at $71.58, suggesting a possible value trap for investors.
VF Corp, a leading entity in the apparel industry, designs, produces, and distributes branded apparel, footwear, and accessories. The company's portfolio includes renowned brands such as Vans, The North Face, Timberland, Supreme, and Dickies. With a history dating back to 1899, VF Corp has grown through numerous acquisitions and has a robust market presence in the Americas, Europe, and Asia-Pacific.
Understanding the GF Value of VF Corp (VFC, Financial)
The GF Value is a unique indicator of a stock's intrinsic worth, calculated based on historical trading multiples, an adjustment factor from GuruFocus based on past performance and growth, and estimates of future business performance. If a stock's price significantly exceeds the GF Value Line, it is overvalued, and its future return is likely to be poor. Conversely, if it is significantly below the GF Value Line, its future return will likely be higher. Given VF Corp's current price and GF Value, the stock indicates signs of being a possible value trap.
Financial Strength of VF Corp (VFC, Financial)
Investing in companies with strong financial health reduces the risk of permanent loss. The cash-to-debt ratio and interest coverage are excellent indicators of a company's financial strength. Unfortunately, VF Corp's cash-to-debt ratio of 0.1 is lower than 77.34% of companies in the Manufacturing - Apparel & Accessories industry, indicating poor financial strength.
Profitability of VF Corp (VFC, Financial)
Investing in profitable companies, especially those with consistent profitability over the long term, poses less risk. VF Corp has been profitable 9 out of the past 10 years, with a revenue of $11.6 billion and EPS of $0.31 over the past twelve months. Its operating margin of 9.15% ranks better than 74.4% of companies in its industry, indicating fair profitability.
Growth of VF Corp (VFC, Financial)
Growth is a critical factor in a company's valuation. The 3-year average annual revenue growth rate of VF Corp is 4.5%, which is better than 56.41% of companies in its industry. However, its 3-year average EBITDA growth rate is -23.1%, ranking worse than 89.36% of companies in the same industry.
ROIC vs WACC of VF Corp (VFC, Financial)
Comparing a company's return on invested capital (ROIC) and the weighted cost of capital (WACC) provides insight into its profitability. For the past 12 months, VF Corp's ROIC is 27.37, and its WACC is 7.62, suggesting that the company generates a good return relative to the capital it has invested in its business.
Conclusion
In conclusion, based on the GF Value and other financial indicators, VF Corp (VFC, Financial) shows signs of being a possible value trap. Despite fair profitability, the company's financial condition is poor, and its growth ranks lower than most companies in the Manufacturing - Apparel & Accessories industry. For more detailed financial insights about VF Corp, check out its 30-Year Financials here.
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