Unveiling the Investment Potential of Helen Of Troy Ltd (HELE): A Comprehensive Analysis
Helen Of Troy Ltd (NASDAQ:HELE) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $103.66, Helen Of Troy Ltd has witnessed a daily loss of 8.79%, marked against a three-month change of -6.13%. A thorough analysis, underlined by the GF Score, suggests that Helen Of Troy Ltd is well-positioned for substantial growth in the near future.
Understanding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
Here are the key components of Helen Of Troy Ltd's GF Score:
Financial strength rank: 6/10
Profitability rank: 9/10
Growth rank: 10/10
GF Value rank: 8/10
Momentum rank: 6/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With a high profitability rank and a slightly lower financial strength rank, GuruFocus assigned Helen Of Troy Ltd the GF Score of 94 out of 100, which signals the highest outperformance potential.
Company Overview: Helen Of Troy Ltd
Helen Of Troy Ltd is a consumer products company offering creative products and solutions for its customers through a diversified portfolio of brands. It operates through two segments: Home & Outdoor and Beauty & Wellness. The Home & Outdoor segment provides a broad range of consumer products for home activities such as food preparation, cooking, cleaning, and organization; as well as products for outdoor and on-the-go activities such as hydration, food storage, backpacks, and travel gear. The Beauty & Wellness segment provides beauty and wellness products including mass and prestige market beauty appliances, prestige market liquid-based hair and personal care products, and wellness devices including thermometers, water and air filtration systems, humidifiers, and fans.
With a market cap of $2.5 billion and sales of $2.04 billion, Helen Of Troy Ltd has an operating margin of 12.42%. This is the income breakdown of Helen Of Troy Ltd:
Financial Strength Analysis
According to the Financial Strength rating, Helen Of Troy Ltd's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. The Interest Coverage ratio for Helen Of Troy Ltd stands impressively at 5.02, underscoring its strong capability to cover its interest obligations. This robust financial position resonates with the wisdom of legendary investor Benjamin Graham, who favored companies with an interest coverage ratio of at least 5. With a favorable Debt-to-Revenue ratio of 0.43, Helen Of Troy Ltd's strategic handling of debt solidifies its financial health.
Profitability Rank Analysis
The Profitability Rank shows Helen Of Troy Ltd's impressive standing among its peers in generating profit. Furthermore, Helen Of Troy Ltd's Gross Margin has seen a consistent rise over the past five years, as evidenced by the data: 2019: 40.99; 2020: 43.02; 2021: 44.18; 2022: 42.87; 2023: 43.39. This trend underscores the company's growing proficiency in transforming revenue into profit. Helen Of Troy Ltd's strong Predictability Rank of 4.0 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Analysis
Ranked highly in Growth, Helen Of Troy Ltd demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 8.5%, which outperforms better than 56.52% of 1709 companies in the Consumer Packaged Goods industry. Moreover, Helen Of Troy Ltd has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 7.7, and the rate over the past five years is 9.9. This trend accentuates the company's continued capability to drive growth.
Conclusion
Given Helen Of Troy Ltd's strong financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. This comprehensive analysis underscores the company's robust financial health and growth potential, making it a compelling investment opportunity for value investors. GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
This article first appeared on GuruFocus.
