AI Stock Analysis: Is HBI a Smart Buy right now?

June 22, 5:53 pm

Hanesbrands Inc. (HBI) is a leading marketer of everyday basic apparel under some of the world’s strongest apparel brands in the Americas, Europe, and Asia. Its product offerings span a multitude of categories, including innerwear, activewear, hosiery, and various licensed apparel. Established in 1901, HBI commands a significant presence in the clothing industry, recognized for its innovation in fabric and quality. The company owns iconic brands like Hanes, Champion, Playtex, Bali, and Maidenform, giving it a robust portfolio that offers extensive market penetration.

Price & AI Score for HBI.

Fundamental Analysis

For the last quarter, Hanesbrands reported revenue of $1.16 billion, a decrease of 10.84% compared to the prior quarter and down 16.27% year-over-year. This dip in revenue is concerning and reflects potential challenges in market demand or execution.

The net income for the last quarter stood at $39 million, reflecting a significant decrease of 150.19% compared to the prior quarter and a 13.71% decrease from the same quarter last year. The sharp decline in net income indicates operational struggles and profitability issues.

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) for the last quarter was $55 million, down 44.28% sequentially and 7.85% year-over-year. The contraction in EBITDA underscores the adverse operating environment and margin compression.

The current Price-to-Earnings (P/E) ratio stands at 129.84. A P/E ratio this high often signals that the stock may be overvalued. For context, a company with a high P/E ratio but declining fundamentals might face downward price corrections.

Technical Analysis

Today's stock price is $4.96, marking a minor increase of 0.40% over the past month and a more significant rise of 16.43% over the past year. While this illustrates short-term and long-term positive price movements, the trend is still bearish.

The current Simple Moving Average (SMA) over the last 10 days is $4.95, which is slightly lower than the previous SMA10 of $4.96, suggesting a potential downward trend in price movement. Additionally, the Relative Strength Index (RSI) is at 50.7, a neutral score, indicating neither overbought nor oversold conditions in the stock.

Alternative Data Analysis

Hanesbrands has increased its job postings by 47% over the last couple of months, with 324 open positions currently. This surge in hiring could indicate future growth initiatives and a potentially robust business outlook.

Customer acquisition metrics also show a promising trend. The company’s website received an estimated 1.3 million visitors, up by 15% recently. This growth in visitor count is a bullish indicator, often correlating with future sales increases.

Customer engagement has also risen, with Hanesbrands gaining a 6% increase in Instagram followers, now totaling 73,000. A rising social media presence typically signals enhanced brand recognition and consumer interest.

According to AltIndex’s AI score, which factors in a blend of fundamental, technical, and alternative data, Hanesbrands has an AI score of 57, equivalent to a hold signal.

Conclusion and Recommendation

In conclusion, while Hanesbrands exhibits some positive signals, such as an increase in stock price over the shorter and longer term, and optimistic alternative data indicators like job postings and customer engagement, the fundamental analysis raises concerns. Revenue, net income, and EBITDA have declined sharply, and the high P/E ratio (129.84) suggests potential overvaluation.

The technical analysis points to a neutral condition with a slight hint of bearishness, mainly due to the lower SMA10 and a neutral RSI.

Given these mixed indicators, the recommendation would be to hold the stock. The positive elements in alternative data and long-term price trends need to be weighed against the negative fundamental performance and the bearish technical signals.

Disclaimer: This article, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current. Visit HBI AI Stock Analysis for a more up-to-date analysis.

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