VF Corp (VFC, Financial), a prominent player in the apparel and accessories manufacturing industry, has experienced a notable fluctuation in its stock price. With a current market capitalization of $6.78 billion, the stock price stands at $17.44. Over the past week, VFC has seen a 5.51% gain, yet the past three months have painted a different picture with a 17.63% loss. This volatility is reflected in the company's GF Value, which currently stands at $40.55, a significant drop from the past GF Value of $61.65. The current and past GF Valuations both suggest a "Possible Value Trap, Think Twice" scenario, urging investors to exercise caution.
Understanding VF Corp's Business Model
VF Corp, with its diverse brand portfolio including Vans, The North Face, Timberland, Supreme, and Dickies, has established a strong market presence across the Americas, Europe, and Asia-Pacific. The company's strategy involves wholesale sales to retailers, direct e-commerce, and company-owned and partner-branded stores. VF's history of growth through acquisitions dates back to its founding in 1899, showcasing a long-standing tradition in the apparel sector.
VF Corp's Profitability in Focus
VF Corp's Profitability Rank stands at 6/10, indicating a moderate level of profitability. The company's Operating Margin of 6.76% is better than nearly two-thirds of its industry peers. However, the Return on Equity (ROE) is at a concerning -28.85%, although it still outperforms 7.24% of industry peers. The Return on Assets (ROA) and Return on Invested Capital (ROIC) are -5.62% and 134.69%, respectively, with the latter being exceptionally higher than 99.72% of peers. VF Corp has maintained profitability for 9 out of the past 10 years, a testament to its resilience and operational efficiency.
Growth Trajectory of VF Corp
The company's growth metrics present a mixed picture. The 3-Year Revenue Growth Rate per Share is 4.50%, which is commendable as it surpasses over half of the industry peers. However, the Total Revenue Growth Rate for the estimated future 3 to 5 years is a modest 0.98%, slightly better than 22.73% of industry peers. The 3-Year EPS without NRI Growth Rate shows a decline of -9.00%, yet this is still better than 26.95% of industry peers. Looking ahead, the EPS Growth Rate for the estimated future 3 to 5 years is an optimistic 69.70%, outperforming 94.74% of peers, indicating potential for significant earnings expansion.
Notable Shareholders in VF Corp
Among the major holders of VF Corp stock, Dodge & Cox leads with 32,115,750 shares, representing an 8.26% share percentage. Jeremy Grantham (Trades, Portfolio) holds 1,045,497 shares, accounting for 0.27%, while Jim Simons (Trades, Portfolio) has a stake of 0.17% with 652,400 shares. These prominent investors' positions reflect their confidence in the company's long-term value proposition.
Competitive Landscape
When compared to its competitors, VF Corp's market cap of $6.78 billion positions it within a competitive range. Levi Strauss & Co (LEVI, Financial) has a market cap of $7.15 billion, PVH Corp (PVH, Financial) is valued at $7.73 billion, and Columbia Sportswear Co (COLM, Financial) stands at $4.92 billion. These figures highlight the competitive nature of the apparel and accessories manufacturing industry, where VF Corp holds a significant, yet challenged, position.
Conclusion: VF Corp's Market Position and Future Outlook
In summary, VF Corp's recent stock performance and valuation suggest a period of uncertainty, with the GF Valuation indicating a possible value trap. The company's profitability, while mixed, shows areas of strength, particularly in its ROIC. Growth prospects are promising, especially in terms of future earnings potential. The commitment of major holders and the company's standing among competitors further contextualize VF Corp's position in the market. Investors should weigh these factors carefully, considering the company's historical performance and future growth estimates, before making investment decisions.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
