Hermes International SCA Unsponsored ADR (HESAY) AI Stock Analysis

• Market Cap: $200.87B
• Dividend Yield: 1.18%
• Average Volume (3M): 21.62K
• Price to Earnings (P/E): 24.5
• Beta (1Y): 1.02
• Revenue Growth: 10.94%
• EPS Growth: 1.12%
• Country: US
• Employees: 24,203
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Luxury Goods
• EPS (TTM): 2.58
• Shares Outstanding: 1,055,694,100
• 10 Day Avg. Volume: 0
• 30 Day Avg. Volume: 21,620
• PEG Ratio: -8.76
• Price to Book (P/B): 11.74
• Price to Sales (P/S): 13.83
• P/FCF Ratio: 41.18
• Enterprise Value/Market Cap: 0.82
• Enterprise Value/Revenue: 10.27
• Enterprise Value/Gross Profit: 14.44
• Enterprise Value/Ebitda: 20.45
• 1Y Price Target: $300.00
• Price Target Upside: 15.78% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 5.44
• Revenue Forecast (FY): $20.27B

• Rating: 71 Outperform
• Price Target: $211.00 ▼(-18.57% Downside)
• Action: Reiterated Date: 03/14/26
• Date: Action: Reiterated 03/14/26

The score is driven primarily by very strong financial performance (high margins, strong cash generation, and low leverage). This is meaningfully offset by weak technicals with the stock trading below key moving averages and negative momentum. Valuation is moderate-to-premium (P/E ~24.5) with a modest dividend yield, providing only limited support.

Positive Factors

High and Stable Profitability

Exceptional gross (~66–72%) and net (~27–32%) margins over 2021–2024 indicate durable pricing power and an efficient cost structure. These industry-leading margins support sustained reinvestment in craftsmanship, marketing and stores, underpinning long-term profitability resilience and high returns on capital.

Strong Cash Generation and Conversion

Operating cash flow scaled substantially (~€1.7B to ~€5.4B) and consistently exceeded net income (roughly 1.34x–1.42x), demonstrating high-quality earnings. Robust cash generation supports capex, inventory funding, dividends and strategic investments without relying on high leverage, improving long-term financial optionality.

Conservative Balance Sheet and High ROE

Rising equity and a low debt-to-equity ratio alongside sustained ROE (~19–28%) reflect conservative financial management. The strong balance sheet provides flexibility to invest in growth, return capital to shareholders, and absorb cyclical shocks, supporting durable operational and strategic execution.

Negative Factors

Net Income Softness in 2024

Net income falling in 2024 even as revenue rose suggests margin compression from cost inflation, mix shifts or rising operating expenses. If these pressures persist structurally, they could weaken the sustainability of historically high margins and require margin-restoring initiatives that take time to implement.

Free Cash Flow Volatility

Free cash flow showed notable variability—negative in 2020 and nearly flat in 2023—making multi-year FCF forecasting less predictable. Persistent volatility can complicate steady dividend policy, capital returns and opportunistic investments, reducing financial predictability for planning and valuation.

Product and Channel Concentration

Heavy reliance on leather goods and a company-operated boutique retail model concentrates exposure to discretionary luxury demand and regional retail disruptions. Product and channel concentration raises sensitivity to changes in consumer preferences, retail footfall and inventory/mix risks over economic cycles.

Hermes International SCA Unsponsored ADR Business Overview & Revenue Model

Company Description

Hermès International Société en commandite par actions engages in the production, wholesale, and retail of various goods. The company offers leather goods and saddlery, such as bags for men and women, clutches, briefcases, luggage, small leather goods, diaries and writing objects, saddles, bridles, and a range of equestrian products and clothing; ready-to-wear garments for men and women; and accessories, including jewelry, belts, hats, gloves, the Internet of Things products, and shoes. It also provides silk and textiles for men and women; art of living and tableware products; perfumes; and watches. In addition, the company is also involved in weaving, engraving, printing, dyeing, finishing, and producing textiles; and purchasing, tanning, dyeing, finishing, and selling precious leathers. It sells its products through a network of 303 stores worldwide. The company also sells watches, perfumes, and tableware through a network of specialized stores. Hermès International Société en commandite par actions was founded in 1837 and is based in Paris, France. Hermès International Société en commandite par actions operates as a subsidiary of H51 SAS.

How the Company Makes Money

Hermès makes money primarily by selling luxury products under the Hermès brand, with revenue largely generated from direct retail sales through its company-operated store network (boutiques) and online channels, and to a lesser extent through wholesale distribution to selected third-party retailers and partners. Its key revenue streams are product sales across several business lines—most notably leather goods and saddlery (including iconic handbags and small leather goods), followed by ready-to-wear and accessories, silk and textiles, perfumes and beauty, watches, and other categories such as jewelry and home items—each contributing to total sales based on consumer demand and product mix. Profitability is supported by premium pricing, strong brand equity, controlled distribution and production (helping manage scarcity and brand positioning), and repeat customer purchasing for core items and seasonal collections. Additional earnings can come from ancillary activities tied to the brand (e.g., certain licensing or other income); if specific details on these items are not available here, they are not further specified.

Hermes International SCA Unsponsored ADR Financial Statement Overview

Summary

Excellent multi-year revenue growth and elite profitability (gross margin ~66–72% and net margin ~27–32% in 2021–2024), supported by strong operating/free cash flow scaling and a conservatively levered balance sheet with high ROE. Slight net income softness in 2024 and some free cash flow growth variability temper an otherwise outstanding profile.

Income Statement

Revenue has expanded strongly from 2020 to 2025 (about €6.4B to €16.0B), with positive year-over-year growth across 2021–2025 after the 2020 decline. Profitability is exceptional and steady for the sector: gross margin is ~66–72% (2021–2024) and net margin is ~27–32% (2021–2024), while operating profitability remains very high. The main weakness is that net income was slightly down in 2024 versus 2023 despite higher revenue, suggesting some cost pressure or mix effects, but 2025 EBIT remains robust.

Balance Sheet

The balance sheet looks very strong with rising equity (€7.4B in 2020 to €18.8B in 2025) and relatively low leverage; debt-to-equity improved from ~0.23 (2020) to ~0.13 (2023–2024). Returns on equity are consistently high (~19–28% from 2020–2024), indicating efficient capital use. A minor watch item is that absolute debt has increased over time (about €1.7B to €2.35B), though it remains modest relative to assets and equity.

Cash Flow

Cash generation is strong and improving, with operating cash flow rising from ~€1.7B (2020) to ~€5.4B (2025) and free cash flow also scaling meaningfully (to ~€5.4B in 2025). Cash conversion is solid: operating cash flow exceeds net income in 2021–2024 (roughly 1.34x–1.42x), supporting earnings quality. The main weakness is volatility in free cash flow growth (notably negative in 2020 and near-flat in 2023), even though the overall multi-year trajectory is clearly upward.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	16.00B	15.17B	13.43B	11.60B	8.98B
Gross Profit	11.38B	10.66B	9.71B	7.66B	5.89B
EBITDA	7.50B	6.99B	6.67B	5.29B	4.03B
Net Income	4.52B	4.60B	4.31B	3.37B	2.44B
Balance Sheet
Total Assets	24.32B	23.08B	20.45B	17.46B	13.85B
Cash, Cash Equivalents and Short-Term Investments	12.24B	11.64B	10.63B	9.22B	6.70B
Total Debt	2.35B	2.17B	2.06B	1.93B	1.80B
Total Liabilities	5.47B	5.75B	5.24B	5.00B	4.43B
Stockholders Equity	18.84B	17.33B	15.20B	12.44B	9.40B
Cash Flow
Free Cash Flow	5.37B	5.14B	3.75B	3.73B	2.92B
Operating Cash Flow	5.37B	5.14B	4.33B	4.25B	3.45B
Investing Cash Flow	-1.28B	-1.20B	-995.00M	-646.00M	-669.00M
Financing Cash Flow	-3.14B	-3.05B	-1.79B	-1.24B	-869.00M

Hermes International SCA Unsponsored ADR Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 259.11
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HESAY, the sentiment is Negative. The current price of 259.11 is above the 20-day moving average (MA) of 223.61, above the 50-day MA of 238.67, and above the 200-day MA of 249.27, indicating a bearish trend. The MACD of -10.65 indicates Positive momentum. The RSI at 21.79 is Positive, neither overbought nor oversold. The STOCH value of 1.34 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HESAY.

Hermes International SCA Unsponsored ADR Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HESAY	71 Outperform	$200.87B	24.47	25.52%	1.18%	10.94%	1.12%
TPR	67 Neutral	$28.52B	11.94	63.26%	1.16%	8.14%	-65.04%
LUXE	65 Neutral	$1.05B	-21.03	56.42%	―	97.28%	―
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
CPRI	51 Neutral	$2.16B	6.45	-244.66%	―	-17.66%	-223.06%
SIG	51 Neutral	$3.57B	―	―	1.46%	-0.40%	-68.99%
REAL	46 Neutral	$1.03B	-108.42	11.34%	―	14.30%	23.73%