Hermes International SCA Unsponsored ADR (HESAY) AI Stock Analysis

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Hermes International SCA Unsponsored ADR

(OTC:HESAY)

81Outperform

Hermes International SCA's overall stock score reflects strong financial health and earnings performance, with robust growth and profitability. Technical analysis indicates potential short-term caution, while valuation highlights premium market expectations. Key strengths include revenue growth and environmental achievements, though challenges in certain divisions and regions present potential risks.

Hermes International SCA Unsponsored ADR (HESAY) vs. S&P 500 (SPY)

Market Cap

$297.25B

Dividend Yield0.66%

Average Volume (3M)57.34K

Price to Earnings (P/E)59.4

Beta (1Y)0.99

Revenue Growth13.04%

EPS Growth6.67%

CountryUS

Employees24,203

SectorConsumer Cyclical

Sector Strength67

IndustryLuxury Goods

Share Statistics

EPS (TTM)2.24

Shares Outstanding1,055,694,100

10 Day Avg. Volume26,744

30 Day Avg. Volume57,337

Financial Highlights & Ratios

PEG Ratio17.58

Price to Book (P/B)14.48

Price to Sales (P/S)0.00

P/FCF Ratio68.12

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$310.00

Price Target Upside6.98% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering0

Hermes International SCA Unsponsored ADR Business Overview & Revenue Model

Company DescriptionHermès 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 MoneyHermes International SCA generates revenue primarily through the sale of its luxury goods across several key categories: leather goods and saddlery, ready-to-wear and accessories, silk and textiles, perfumes, watches, and other Hermes products. The company has a strong retail presence, operating over 300 stores worldwide, which serve as a primary revenue stream. Additionally, Hermes benefits from its strong brand equity and pricing power, allowing it to command premium prices for its products. The company also engages in strategic collaborations and partnerships to expand its brand reach and product offerings, though its core focus remains on maintaining the exclusivity and high quality of its products to drive sales.

Hermes International SCA Unsponsored ADR Financial Statement Overview

Summary

Hermes International SCA's financial performance is characterized by strong revenue growth, high profitability, and excellent cash flow generation. The company maintains a conservative balance sheet with low leverage, enhancing its financial resilience. These strengths position Hermes well within the retail discretionary industry, allowing it to capitalize on growth opportunities while maintaining financial stability.

Income Statement

Very Positive

Hermes International SCA has demonstrated strong revenue growth with a 12.96% increase over the last year, accompanied by robust profitability metrics. The company maintains a high gross profit margin of 70.25% and a net profit margin of 30.33% in 2024, indicating efficient cost management and strong pricing power. EBIT and EBITDA margins are also impressive at 40.54% and 46.08%, respectively, reflecting operational efficiency. The consistent growth trajectory and high profitability metrics are indicative of a strong competitive position in the retail discretionary sector.

Balance Sheet

Very Positive

The balance sheet of Hermes International SCA is solid, characterized by a low debt-to-equity ratio of 0.13, indicating low financial leverage and a conservative capital structure. The return on equity (ROE) is strong at 26.56%, showcasing effective utilization of equity to generate profits. The equity ratio stands at 75.08%, reflecting a high proportion of equity in the asset base, which enhances financial stability. Overall, the balance sheet reflects a healthy financial position with low risk.

Cash Flow

Very Positive

Hermes International SCA exhibits strong cash flow performance with a 43.48% growth in free cash flow in 2024. The operating cash flow to net income ratio is 1.12, indicating efficient cash generation relative to reported earnings. The free cash flow to net income ratio is also favorable at 1.12, demonstrating the company's ability to convert earnings into cash effectively. The positive cash flow metrics suggest strong liquidity and financial flexibility.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
14.23B	15.17B	13.43B	11.60B	8.98B	6.39B
	Gross Profit
9.86B	10.66B	9.71B	7.66B	5.89B	3.91B
	EBIT
5.92B	6.15B	5.65B	4.88B	3.59B	2.06B
	EBITDA
6.51B	6.99B	6.67B	5.29B	4.03B	2.53B
	Net Income Common Stockholders
4.45B	4.60B	4.31B	3.37B	2.44B	1.39B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
10.81B	11.64B	10.63B	9.22B	6.70B	4.73B
	Total Assets
20.45B	23.08B	20.45B	17.46B	13.85B	11.05B
	Total Debt
2.06B	2.17B	2.06B	1.93B	1.80B	1.69B
	Net Debt
-8.56B	-9.47B	-8.56B	-7.29B	-4.89B	-3.05B
	Total Liabilities
5.24B	5.75B	5.24B	5.00B	4.43B	3.66B
	Stockholders Equity
15.20B	17.33B	15.20B	12.44B	9.40B	7.38B
Cash Flow		Free Cash Flow
3.69B	5.14B	3.58B	3.73B	2.92B	1.22B
	Operating Cash Flow
4.55B	5.14B	4.33B	4.25B	3.45B	1.66B
	Investing Cash Flow
-1.39B	-1.20B	-995.00M	-646.00M	-716.00M	-453.60M
	Financing Cash Flow
-3.08B	-3.05B	-1.79B	-1.24B	-869.00M	-810.20M

Hermes International SCA Unsponsored ADR Technical Analysis

Technical Analysis Sentiment

Positive

Last Price289.78

Price Trends

50DMA

267.90

Positive

100DMA

266.76

Positive

200DMA

246.04

Positive

Market Momentum

MACD

5.45

Negative

RSI

68.07

Neutral

STOCH

98.02

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HESAY, the sentiment is Positive. The current price of 289.78 is above the 20-day moving average (MA) of 273.16, above the 50-day MA of 267.90, and above the 200-day MA of 246.04, indicating a bullish trend. The MACD of 5.45 indicates Negative momentum. The RSI at 68.07 is Neutral, neither overbought nor oversold. The STOCH value of 98.02 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HESAY.

Hermes International SCA Unsponsored ADR Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HESAY	81 Outperform	$297.25B	59.38	28.67%	0.66%	13.04%	6.67%
TPR	76 Outperform	$17.17B	21.75	40.27%	1.67%	2.67%	1.31%
SIG	61 Neutral	$2.99B	5.56	2.62%	1.70%	-6.52%	-104.24%
Sector *	61 Neutral	$6.93B	11.84	2.89%	3.91%	2.59%	-21.68%
LUXE	56 Neutral	$723.91M	―	-8.28%	―	12.01%	-23.53%
REAL	53 Neutral	$633.33M	―	32.94%	―	11.89%	66.22%
CPRI	49 Neutral	$2.18B	―	-67.22%	―	-12.34%	-574.65%

* Consumer Cyclical Sector Average

Performance Comparison

HESAY

Hermes International SCA Unsponsored ADR

288.86

41.64

16.84%

TPR

Tapestry

83.60

42.04

101.15%

CPRI

Capri Holdings

18.71

-17.44

-48.24%

SIG

Signet Jewelers

66.67

-33.83

-33.66%

REAL

RealReal

5.70

1.15

25.27%

LUXE

LuxExperience

10.12

5.28

109.09%

Hermes International SCA Unsponsored ADR Earnings Call Summary

Earnings Call Date:Feb 14, 2025

(Q4-2024)

% Change Since: -0.99%|

Next Earnings Date:Jul 30, 2025

Earnings Call Sentiment Positive

The earnings call reflected strong growth and financial performance across most regions and divisions, alongside environmental achievements. However, challenges remain in the Watches division and in the Greater China market, with some pressure on gross margins.

Q4-2024 Updates

Positive Updates

Record-Breaking Revenue and Growth

Hermès achieved a revenue of EUR 15.2 billion in 2024, representing a 15% increase at constant exchange rates and a 13% increase at current exchange rates. Q4 revenue stood at EUR 4 billion, up 18% at both constant and current exchange rates.

Strong Regional Performance

All regions showed solid performance: France (+13%), Europe (+19%), Japan (+23%), Asia excluding Japan (+7%), and America (+15%).

Successful Product Launches

Notable successes included the launch of the new feminine fragrance Barénia, and the Apple Watch 10 series. The leather collections and the Ready-to-wear divisions also received a strong positive reception.

Environmental Achievements

Hermès achieved a 64% reduction in Scope 1 and 2 emissions compared to 2018, and a 50% reduction in intensity for Scope 3 emissions.

Strong Financial Position

Current operating income stood at EUR 6.2 billion, up 9%, and available adjusted cash flow reached EUR 3.8 billion, up 18%. Net cash increased by EUR 900 million to reach EUR 12 billion.

Negative Updates

Watches Division Decline

The Watches division saw a 4% decline due to a difficult context and high comparison basis.

Challenges in Greater China

Although Greater China saw growth, it was less than other regions, reflecting broader economic challenges and uncertainties in the region.

Gross Margin Contraction

The gross margin rate decreased to 70.3% from 72.3% in 2023 due to negative currency impacts and increased costs.

Company Guidance

In the 2024 fiscal year, Hermès demonstrated robust financial performance, with revenue reaching EUR 15.2 billion, marking a 15% increase at constant exchange rates. The company's current operating income rose by 9% to EUR 6.2 billion, while available adjusted cash flow increased by 18% to EUR 3.8 billion. Hermès continued its strategic investments, totaling EUR 2.5 billion over three years, with over 60% in France. The company surpassed a workforce threshold of 25,000 employees, with 62% based in France, and distributed a EUR 4,500 bonus to all employees. Hermès also made significant strides in sustainability, achieving a 64% reduction in Scope 1 and 2 emissions since 2018 and a 50% reduction in Scope 3 emissions intensity. Additionally, the brand expanded its network with new store openings in the U.S. and Asia, while strengthening its production capabilities with new leather workshops in France.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.