Long-established in the Travel & Leisure industry, Hasbro Inc (HAS, Financial) has enjoyed a stellar reputation. However, it has recently witnessed a daily loss of 1.01%, juxtaposed with a three-month change of 18.41%. Fresh insights from the GF Score hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of Hasbro Inc.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 4/10
- Profitability rank: 7/10
- Growth rank: 3/10
- GF Value rank: 9/10
- Momentum rank: 2/10
Based on the above method, GuruFocus assigned Hasbro Inc a GF Score of 68 out of 100, which signals poor future outperformance potential.
Understanding Hasbro Inc's Business
Hasbro Inc, with a market cap of $7.24 billion and sales of $5.00 billion, operates within the branded play industry, providing entertainment offerings worldwide. Its portfolio includes iconic brands such as Transformers, Nerf, and Magic: The Gathering. The company's ownership stakes in Discovery Family and production capabilities from Entertainment One enhance its multichannel presence. The acquisition of EOne in 2019 added popular family properties like Peppa Pig and PJ Masks to its roster, and the tie-up with Dungeons & Dragons Beyond in 2022 expanded its reach to 10 million digital tabletop players.
Financial Strength Breakdown
Hasbro Inc's financial strength indicators present some concerning insights about the company's balance sheet health. The interest coverage ratio of 1.03 positions it worse than 84.25% of 597 companies in the Travel & Leisure industry, signaling potential challenges in managing interest expenses. The Altman Z-Score of just 0.85, below the distress zone of 1.81, suggests possible financial distress in the near future. Moreover, the low cash-to-debt ratio at 0.16 and a debt-to-equity ratio of 3.19, worse than 88.22% of industry peers, indicate an over-reliance on borrowing and vulnerability to market fluctuations.
Growth Prospects
A lack of significant growth is another area where Hasbro Inc seems to falter, as evidenced by the company's low Growth rank. The company's revenue has declined by an average of -3.2% per year over the past three years, underperforming 57.29% of 768 companies in the Travel & Leisure industry. Stagnating revenues may pose concerns in a fast-evolving market.
Next Steps
Considering Hasbro Inc's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential underperformance. Investors should be cautious and consider these factors when evaluating the company's future prospects. For those seeking more robust investment opportunities, GuruFocus Premium members can explore companies with strong GF Scores using the GF Score Screen.
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.
