The Hershey Company
The Hershey Company Fundamental Analysis
The Hershey Company (HSY) shows weak financial fundamentals with a PE ratio of 52.33, profit margin of 7.55%, and ROE of 19.20%. The company generates $11.7B in annual revenue with weak year-over-year growth of 0.33%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 54.5/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze HSY's fundamental strength across five key dimensions:
Efficiency Score
WeakHSY struggles to generate sufficient returns from assets.
Valuation Score
ModerateHSY shows balanced valuation metrics.
Growth Score
ModerateHSY shows steady but slowing expansion.
Financial Health Score
ModerateHSY shows balanced financial health with some risks.
Profitability Score
ModerateHSY maintains healthy but balanced margins.
Key Financial Metrics
Is HSY Expensive or Cheap?
P/E Ratio
HSY trades at 52.33 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, HSY's PEG of -1.52 indicates potential undervaluation.
Price to Book
The market values The Hershey Company at 9.97 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 23.68 times EBITDA. This signals the market has high growth expectations.
How Well Does HSY Make Money?
Net Profit Margin
For every $100 in sales, The Hershey Company keeps $7.55 as profit after all expenses.
Operating Margin
Core operations generate 12.12 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $19.20 in profit for every $100 of shareholder equity.
ROA
The Hershey Company generates $6.43 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
The Hershey Company produces operating cash flow of $2.27B, showing steady but balanced cash generation.
Free Cash Flow
The Hershey Company generates strong free cash flow of $2.06B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $10.15 in free cash annually.
FCF Yield
HSY converts 4.49% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
52.33
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-1.52
vs 25 benchmark
P/B Ratio
Price to book value ratio
9.97
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.94
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.17
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.19
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.19
vs 25 benchmark
ROA
Return on assets percentage
0.06
vs 25 benchmark
ROCE
Return on capital employed
0.13
vs 25 benchmark
How HSY Stacks Against Its Sector Peers
| Metric | HSY Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 52.33 | 23.01 | Worse (Expensive) |
| ROE | 19.20% | 1228.00% | Weak |
| Net Margin | 7.55% | -4010.00% (disorted) | Weak |
| Debt/Equity | 1.17 | 0.78 | Weak (High Leverage) |
| Current Ratio | 1.19 | 2.35 | Neutral |
| ROA | 6.43% | -157546.00% (disorted) | Weak |
HSY outperforms its industry in 0 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews The Hershey Company's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
44.76%
Industry Style: Defensive, Dividend, Low Volatility
High GrowthEPS CAGR
99.38%
Industry Style: Defensive, Dividend, Low Volatility
High GrowthFCF CAGR
48.12%
Industry Style: Defensive, Dividend, Low Volatility
High Growth