Hanesbrands Inc. (NYSE:HBI), is not the largest company out there, but it led the NYSE gainers with a relatively large price hike in the past couple of weeks. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock's share price. However, what if the stock is still a bargain? Today we will analyse the most recent data on Hanesbrands's outlook and valuation to see if the opportunity still exists.
What Is Hanesbrands Worth?
Great news for investors – Hanesbrands is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is $7.36, but it is currently trading at US$4.50 on the share market, meaning that there is still an opportunity to buy now. However, given that Hanesbrands's share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from Hanesbrands?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it's the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with a relatively muted revenue growth of 2.4% expected over the next couple of years, growth doesn't seem like a key driver for a buy decision for Hanesbrands, at least in the short term.
What This Means For You
Are you a shareholder? Even though growth is relatively muted, since HBI is currently undervalued, it may be a great time to increase your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you've been keeping an eye on HBI for a while, now might be the time to enter the stock. Its future outlook isn't fully reflected in the current share price yet, which means it's not too late to buy HBI. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.
If you want to dive deeper into Hanesbrands, you'd also look into what risks it is currently facing. In terms of investment risks, we've identified 1 warning sign with Hanesbrands, and understanding it should be part of your investment process.
If you are no longer interested in Hanesbrands, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.