VF Corporation (VFC, Financial), a prominent player in the apparel and accessories manufacturing industry, has recently witnessed a notable uptick in its stock performance. Over the past week, the company's shares have surged by 9.55%, and over the last three months, the stock has gained an impressive 13.88%. Currently, VF Corp's market capitalization stands at $5.86 billion, with a stock price of $15.08. Despite these gains, the GF Value suggests a valuation of $26.47, indicating a potential undervaluation. However, investors are advised to exercise caution, as the current GF Valuation labels it as a "Possible Value Trap, Think Twice," a sentiment echoed from three months prior when the GF Value was higher at $39.97.
Overview of VF Corporation
VF Corp, established in 1899, has grown into a global powerhouse in the apparel sector, offering a diverse range of active, outdoor, and workwear through its portfolio of brands such as Vans, The North Face, Timberland, Supreme, and Dickies. The company operates on a multinational scale, distributing products across the Americas, Europe, and Asia-Pacific through various channels including wholesale, e-commerce, and branded stores. This extensive reach underscores VF's robust market presence and adaptability in the ever-evolving fashion industry.
Assessing VF Corp's Profitability
VF Corp's financial health, as indicated by its Profitability Rank of 7/10, showcases a relatively strong position within the industry. The company's Operating Margin stands at 4.53%, which is better than 53.24% of its peers. However, its Return on Equity (ROE) is notably low at -41.74%, and its Return on Assets (ROA) at -7.41% also suggests areas for improvement. Despite these figures, VF's Return on Invested Capital (ROIC) impressively exceeds 92.44% of industry counterparts at 19.56%, highlighting efficient capital use. Over the past decade, VF has maintained profitability for eight years, further affirming its financial resilience.
Growth Trajectory of VF Corporation
The Growth Rank for VF Corp is currently at 4/10. The company has experienced a 3-Year Revenue Growth Rate per Share of 4.50%, and a 5-Year Rate of 2.60%, reflecting steady, albeit modest, top-line expansion. Looking ahead, the estimated Total Revenue Growth Rate for the next three to five years is projected at 1.69%. In terms of earnings, the 3-Year EPS without NRI Growth Rate has declined by 43.60%, but future estimates are optimistic, predicting an 89.62% EPS Growth Rate, which ranks better than 94.81% of global competitors.
Significant Shareholders and Competitive Landscape
Notable investors in VF Corp include Dodge & Cox holding 42,404,270 shares (10.9% share), Jim Simons with 1,927,500 shares (0.5% share), and Paul Tudor Jones (Trades, Portfolio) who owns 1,223,793 shares (0.31% share). These substantial investments underscore confidence in VF's market strategy and future prospects.
In comparison to its competitors, VF Corp holds a competitive edge with a higher market cap than Columbia Sportswear Co (COLM, Financial) at $4.72 billion and Kontoor Brands Inc (KTB, Financial) at $3.85 billion, but slightly less than PVH Corp (PVH, Financial) at $5.99 billion. This positioning reflects VF's significant role and influence within the apparel industry.
Conclusion: Evaluating VF Corp's Market Position and Future Outlook
In conclusion, VF Corp's recent stock performance and underlying financial metrics present a mixed picture. While the company shows strong capital efficiency and a solid profitability track record, challenges in net earnings growth and asset returns highlight areas for potential improvement. Investors should weigh these factors alongside the competitive industry landscape and VF's strategic initiatives to assess the long-term value and risks associated with its stock. As the market continues to evolve, VF Corp's ability to adapt and innovate will be crucial in sustaining its growth and market position.
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.
