Hanesbrands Inc (HBI, Financial) has experienced a notable fluctuation in its stock price over recent periods. With a current market capitalization of $1.93 billion, the apparel manufacturer's stock is trading at $5.49. Over the past week, HBI's stock has seen a slight decline of 2.64%. However, looking at a broader timeframe, the stock has gained an impressive 33.07% over the past three months. Despite this surge, the GF Value of HBI stands at $8.28, down from a past GF Value of $10.41. The current and past GF Valuations both suggest that HBI could be a possible value trap, advising investors to think twice before making an investment decision.
Understanding Hanesbrands Inc
Hanesbrands Inc, a stalwart in the manufacturing of apparel and accessories, is known for its portfolio of strong brands such as Hanes, Champion, and Playtex. The company's business model is characterized by its vertical integration, producing over 70% of its products in-house across a global network of company-controlled factories. With a distribution footprint that spans the Americas, Europe, and Asia-Pacific, Hanesbrands has established a significant presence since its inception in 1901. Headquartered in Winston-Salem, North Carolina, the company has navigated the complex apparel industry to maintain its status as a key player.
Profitability Analysis
When it comes to profitability, Hanesbrands Inc holds a Profitability Rank of 6/10, which is a moderate score indicating a fair level of profitability. The company's operating margin stands at 5.12%, which is better than 56.78% of 1,055 companies in the industry. However, the Return on Equity (ROE) is at -4.98%, and Return on Assets (ROA) is at -0.29%, both metrics showing room for improvement. The Return on Invested Capital (ROIC) at 4.44% is more encouraging, surpassing 58.94% of industry peers. Over the past decade, Hanesbrands has managed to stay profitable for 7 years, which is better than 48.69% of the companies in the same space.
Growth Prospects and Challenges
The Growth Rank for Hanesbrands is currently at 3/10, indicating that the company's growth is lower than many of its competitors. The 3-Year Revenue Growth Rate per Share has decreased by 2.50%, and the 5-Year Revenue Growth Rate per Share has also declined by 1.70%. These figures suggest that Hanesbrands has been facing challenges in expanding its top-line revenue. Looking ahead, the Total Revenue Growth Rate (Future 3Y To 5Y Est) is projected at -3.98%, which, while not promising, is still better than 5.8% of companies in the industry. On a brighter note, the EPS without NRI Growth Rate (Future 3Y To 5Y Est) is expected to be a robust 93.66%, outperforming 94.74% of its industry counterparts.
Investor Holdings
Notable investors have taken positions in Hanesbrands, with Jim Simons (Trades, Portfolio) holding 4,394,800 shares, representing 1.26% of the company's shares. Charles Brandes (Trades, Portfolio) follows closely with 4,298,017 shares, accounting for 1.23% of the shares. HOTCHKIS & WILEY holds a smaller stake with 1,402,910 shares, making up 0.4% of the shares. These holdings reflect a level of confidence from some investors in the company's potential.
Competitive Landscape
In comparison to its competitors, Hanesbrands Inc holds its ground with a market cap of $1.93 billion. Oxford Industries Inc (OXM, Financial) has a slightly lower market cap of $1.65 billion, while G-III Apparel Group Ltd (GIII, Financial) and FIGS Inc (FIGS, Financial) have market caps of $1.17 billion and $849.559 million, respectively. This places Hanesbrands in a competitive position within the industry, with a market cap that suggests a stronger market presence than some of its closest competitors.
Investment Considerations
In conclusion, Hanesbrands Inc's recent stock performance has been impressive, with a significant 33.07% gain over the past three months. However, the company's profitability and growth metrics present a mixed picture. While the operating margin and ROIC are competitive, the negative ROE and ROA, along with a low Growth Rank, raise concerns. The projected decline in future revenue growth is also troubling, although the anticipated surge in EPS growth offers a glimmer of hope. When considering the company's valuation and investment potential, the current GF Valuation suggests caution. Investors should weigh the potential risks and rewards carefully, taking into account the company's market position and the investment stances of notable shareholders. As always, a thorough due diligence process is recommended before making any 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.
