Hermes International SCA Unsponsored ADR (HESAY) AI Stock Analysis

• Market Cap: $231.04B
• Dividend Yield: 1.18%
• Average Volume (3M): 44.47K
• Price to Earnings (P/E): 45.1
• Beta (1Y): 0.94
• 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: 25,993
• 30 Day Avg. Volume: 44,467
• 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: 0.84
• Enterprise Value/Revenue: 12.20
• Enterprise Value/Gross Profit: 17.15
• Enterprise Value/Ebitda: 24.29
• 1Y Price Target: $300.00
• Price Target Upside: 15.78% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 5.48
• Revenue Forecast (FY): $20.35B

• Rating: 78 Outperform
• Price Target: $290.00 ▲(11.92% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is driven primarily by exceptional financial performance (strong growth, margins, cash generation, and conservative leverage) and a constructive earnings-call outlook despite some headwinds. Offsetting factors are a rich valuation (high P/E, modest yield) and only mixed technicals with an extended stochastic and price slightly below the 200-day moving average.

Positive Factors

Durable Revenue Growth

Multi-year revenue growth from ~€6.4B (2020) to ~€16.0B (2025) demonstrates sustained end-customer demand and effective geographic/product expansion. This scale supports durable wholesale and retail rollouts, replenishment cadence, and long-term brand momentum versus cyclical peers.

Exceptional Margins & Profitability

Consistently high gross and net margins reflect persistent pricing power, scarcity-driven product economics and tight cost control. Structural margin strength enables reinvestment in craftsmanship, selective retail expansion and resilience to input or FX shocks over multiple quarters.

Strong Cash Generation & Balance Sheet

Rising operating cash flow and meaningful free cash flow indicate high cash conversion and internal funding for capex, production capacity and targeted investments. Combined with growing equity and low leverage, this underpins durable financial flexibility and the ability to self-fund expansion.

Negative Factors

Free Cash Flow Volatility

Notable FCF volatility (negative in 2020, near-flat in 2023) raises execution risk for discretionary investments, hiring or buybacks if weaker quarters recur. Variable FCF reduces predictability of internal funding and may force timing changes to capex or return-of-capital plans.

Division & Regional Weaknesses

Declines in Perfume & Beauty, a France slowdown, currency headwinds (~€80m) and weaker first-time customer trends signal structural mix and demand risks. These patterns can limit longer-term penetration in aspirational categories and constrain sustained top-line expansion in tourist-dependent markets.

Rising Absolute Debt

While leverage metrics remain low, the rise in nominal debt from ~€1.7B to ~€2.35B increases fixed obligations. In a scenario of margin pressure or higher rates, higher absolute debt could constrain flexibility for strategic hiring, capacity spending or accelerated share returns.

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

Hermes generates revenue predominantly through the sale of its luxury products, with key revenue streams including leather goods, fashion accessories, ready-to-wear clothing, and perfumes. The company benefits from a robust pricing strategy that reflects the exclusivity and quality of its items, often resulting in high profit margins. Additionally, Hermes has established significant brand loyalty, allowing for repeat purchases from affluent customers. The company also engages in limited collaborations and partnerships that enhance its brand visibility and appeal, contributing to its overall earnings. Seasonal product launches and a strong online presence help to further boost sales, especially in emerging markets where luxury consumption is on the rise.

Hermes International SCA Unsponsored ADR Financial Statement Overview

Summary

Excellent multi-year revenue expansion and elite profitability, supported by a strong balance sheet with low leverage and high ROE, plus strong operating cash flow and free cash flow generation. Main watch items are slight net income softness in 2024 versus 2023 and some free cash flow growth variability.

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 243.47, above the 50-day MA of 246.97, and above the 200-day MA of 253.28, indicating a bearish trend. The MACD of -3.96 indicates Positive momentum. The RSI at 28.64 is Positive, neither overbought nor oversold. The STOCH value of 7.63 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	78 Outperform	$231.04B	45.10	25.50%	1.18%	10.94%	1.12%
TPR	67 Neutral	$31.26B	64.01	55.34%	1.16%	8.14%	-65.04%
LUXE	65 Neutral	$1.27B	2.07	56.42%	―	97.28%	―
SIG	64 Neutral	$3.95B	29.03	8.24%	1.46%	-0.40%	-68.99%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
CPRI	51 Neutral	$2.26B	-4.09	-96.50%	―	-17.66%	-223.06%
REAL	50 Neutral	$1.38B	―	―	―	14.30%	23.73%