VF Corp (VFC, Financial), a prominent player in the apparel and accessories manufacturing industry, has recently seen a significant uptick in its stock performance. Over the past week, the company's stock price has gained 3.24%, and over the last three months, it has surged by an impressive 34.36%. Currently, the stock is priced at $17.27, with a market capitalization of $6.72 billion. According to GuruFocus's GF Value, the stock is modestly undervalued at a GF Value of $22.95, suggesting potential room for growth. This valuation marks a shift from three months ago when VF Corp was considered a possible value trap.
Overview of VF Corp
VF Corp designs, produces, and distributes branded apparel, footwear, and accessories. The company's diverse portfolio includes well-known brands such as Vans, The North Face, Timberland, Altra, and Dickies. VF Corp operates globally, marketing its products across the Americas, Europe, and Asia-Pacific through various channels including wholesale, e-commerce, and branded stores. Founded in 1899, VF Corp has grown through numerous brand acquisitions and is known for its active, outdoor, and work apparel categories.
Assessing VF Corp's Profitability
VF Corp's Profitability Rank stands at 7 out of 10, indicating strong profitability within its industry. The company's Operating Margin is 3.77%, which is better than 49.61% of its peers. However, its Return on Equity (ROE) is notably low at -58.04%, and its Return on Assets (ROA) is -9.29%, both metrics reflecting challenges in asset management and equity returns. Despite these figures, VF Corp's Return on Invested Capital (ROIC) is a robust 10.04%, outperforming 79.74% of competitors. Over the past decade, VF Corp has maintained profitability for eight years, showcasing its resilience and operational efficiency.
Growth Trajectory and Future Prospects
Despite its strong profitability, VF Corp's Growth Rank is low at 1 out of 10. The company's 3-year and 5-year revenue growth rates per share are 4.50% and 2.60%, respectively. More concerning are the declines in EPS over the past three and five years, with rates of -43.60% and -29.80%. However, there is a silver lining as the estimated future EPS growth rate over the next 3 to 5 years is projected at an optimistic 87.67%, suggesting potential recovery and growth ahead.
Investor Confidence and Market Position
VF Corp is backed by significant investors including Dodge & Cox, holding 42,404,270 shares (10.9% share), and other notable firms like Paul Tudor Jones (Trades, Portfolio) and Renaissance Technologies (Trades, Portfolio). This strong investor backing reflects confidence in the company's market position and future prospects. In comparison to its competitors like Levi Strauss & Co (LEVI, Financial), PVH Corp (PVH, Financial), and Columbia Sportswear Co (COLM, Financial), VF Corp holds a competitive stance with a unique brand portfolio and global market presence.
Conclusion
VF Corp presents a mixed financial picture characterized by strong profitability metrics juxtaposed against weaker growth indicators. However, the stock's current valuation as modestly undervalued according to the GF Value, combined with strong backing from reputable investors and a promising future EPS growth forecast, makes it an intriguing option for value investors. As the company navigates its challenges and leverages its strengths, it remains a noteworthy contender in the apparel and accessories sector.
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.
