As of June 4, 2025, HanesBrands Inc's estimated intrinsic value ranges from $1.37 to $25.04 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $6.65 | +35.4% |
| Discounted Cash Flow (5Y) | $5.78 | +17.7% |
| Dividend Discount Model (Multi-Stage) | $1.37 | -72.1% |
| Earnings Power Value | $25.04 | +409.9% |
Is HanesBrands Inc (HBI) undervalued or overvalued?
With the current market price at $4.91, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate HanesBrands Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.23 | 1.42 |
| Cost of equity | 9.5% | 12.8% |
| Cost of debt | 5.6% | 7.5% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 1.3 | 1.3 |
| After-tax WACC | 6.5% | 8.6% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $6 | $4,215M | 79.7% |
| 10-Year Growth | $7 | $4,523M | 64.5% |
| 5-Year EBITDA | $1 | $2,558M | 66.5% |
| 10-Year EBITDA | $3 | $3,096M | 48.2% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $818M |
| Discount Rate (WACC) | 8.6% - 6.5% |
| Enterprise Value | $9,459M - $12,592M |
| Net Debt | $2,171M |
| Equity Value | $7,288M - $10,421M |
| Outstanding Shares | 354M |
| Fair Value | $21 - $29 |
| Selected Fair Value | $25.04 |
| Metric | Value |
|---|---|
| Market Capitalization | $1736M |
| Enterprise Value | $3907M |
| Trailing P/E | 0.00 |
| Forward P/E | 0.00 |
| Trailing EV/EBITDA | 8.45 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | -100.00% |
| Debt-to-Equity Ratio | 1.30 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 35% | $1.99 |
| Discounted Cash Flow (5Y) | 29% | $1.45 |
| Dividend Discount Model (Multi-Stage) | 24% | $0.27 |
| Earnings Power Value | 12% | $2.50 |
| Weighted Average | 100% | $7.32 |
Based on our comprehensive valuation analysis, HanesBrands Inc's weighted average intrinsic value is $7.32, which is approximately 49.0% above the current market price of $4.91.
Key investment considerations:
Given these factors, we believe HanesBrands Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.