The Hershey Co

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HSY : NYSE : Consumer Goods
$107.98 | %
Today's Range: 107.48 - 108.62
Avg. Daily Volume: 1035100.0
03/24/17 - 4:02 PM ET

Financial Analysis

HERSHEY CO's gross profit margin for the fourth quarter of its fiscal year 2016 has decreased when compared to the same period a year ago. Even though sales increased, the net income has decreased. HERSHEY CO has very weak liquidity. Currently, the Quick Ratio is 0.46 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year.

During the same period, stockholders' equity ("net worth") has decreased by 21.25% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.

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Income Statement Q4 FY16 Q4 FY15
Net Sales ($mil)1970.241909.22
EBITDA ($mil)296.29438.24
EBIT ($mil)236.36370.27
Net Income ($mil)116.85213.38

Balance Sheet Q4 FY16 Q4 FY15
Cash & Equiv. ($mil)296.97346.53
Total Assets ($mil)5524.335344.37
Total Debt ($mil)2980.172420.53
Equity ($mil)785.86998.0

Profitability Q4 FY16 Q4 FY15
Gross Profit Margin40.7248.55
EBITDA Margin15.0322.95
Operating Margin12.019.39
Sales Turnover1.351.38
Return on Assets13.039.59
Return on Equity91.6251.39
Debt Q4 FY16 Q4 FY15
Current Ratio0.950.83
Interest Expense25.4523.08
Interest Coverage9.2916.04

Share Data Q4 FY16 Q4 FY15
Shares outstanding (mil)212.26216.78
Div / share0.620.58
Book value / share3.74.6
Institutional Own % n/a n/a
Avg Daily Volume1014958.01189211.0


BUY. HERSHEY CO's P/E ratio indicates a premium compared to an average of 31.49 for the Food Products industry and a premium compared to the S&P 500 average of 26.33. For additional comparison, its price-to-book ratio of 29.20 indicates a significant premium versus the S&P 500 average of 2.93 and a significant premium versus the industry average of 5.11. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, HERSHEY CO proves to trade at a premium to investment alternatives within the industry.

1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
HSY 32.27 Peers 31.49   HSY 23.33 Peers 18.83

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

HSY is trading at a valuation on par with its peers.


Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

HSY is trading at a premium to its peers.

1 2 3 4 5
premium   discount
  Price to
1 2 3 4 5
premium   discount
HSY 20.87 Peers 20.87   HSY 0.75 Peers 1.71

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

HSY is trading at a valuation on par with its peers.


Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

HSY trades at a significant discount to its peers.

1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
HSY 29.20 Peers 5.11   HSY 45.02 Peers 1487.20

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

HSY is trading at a significant premium to its peers.


Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, HSY is expected to significantly trail its peers on the basis of its earnings growth rate.

1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
HSY 3.08 Peers 2.40   HSY 0.72 Peers 8.16

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

HSY is trading at a significant premium to its industry.


Lower. A sales growth rate that trails the industry implies that a company is losing market share.

HSY significantly trails its peers on the basis of sales growth



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