Does Gildan’s 2025 Rally Still Offer Value After 21.3% Share Price Gain?

• If you have been wondering whether Gildan Activewear is still a buy after its big run, you are not alone. This article explores whether the current price still makes sense.
• The stock has climbed 21.3% over the last year and is up 20.8% year to date, even after some recent consolidation with a 1.4% gain over the last week and a modest 0.8% dip over the past month.
• Recent headlines have focused on Gildan’s strategic positioning in basics and activewear, including ongoing initiatives to streamline its manufacturing footprint and sharpen its focus on higher margin product lines. At the same time, investors have been watching how management responds to shifting demand patterns in retail and promotional markets, which helps explain some of the share price volatility.
• Despite that backdrop, Gildan currently scores a 6/6 valuation check score, suggesting it screens as undervalued across our standard tests. Next, we will walk through those valuation approaches while also pointing to a more complete way of thinking about value at the end of the article.

Find out why Gildan Activewear's 21.3% return over the last year is lagging behind its peers.

Approach 1: Gildan Activewear Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business is worth today by projecting the cash it can generate in the future and discounting those cash flows back to their value in today’s dollars.

For Gildan Activewear, the latest twelve month free cash flow is about $300 Million. Using a two stage Free Cash Flow to Equity model, analysts project free cash flow rising to around $878 Million by 2027, with further growth extrapolated out over the following years based on gradually slowing growth rates. These projected cash flows, all in $, are then discounted to reflect the risk and time value of money.

On this basis, the DCF model arrives at an intrinsic value of roughly $179.21 per share. Compared with the current market price, this implies the shares are trading at a 54.6% discount, suggesting the stock is meaningfully undervalued according to this cash flow based approach.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Gildan Activewear is undervalued by 54.6%. Track this in your watchlist or portfolio, or discover 906 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Gildan Activewear.

Approach 2: Gildan Activewear Price vs Earnings

For companies that are solidly profitable like Gildan Activewear, the price to earnings, or PE, ratio is a useful way to gauge value because it directly links what investors pay to the profits the business is generating today. In general, faster earnings growth and lower perceived risk justify a higher PE, while slower growth and higher uncertainty usually mean a lower, more conservative multiple.

Gildan currently trades on a PE of about 18.46x, which is slightly above the broader Luxury industry average of around 17.48x but well below the peer group average of roughly 35.78x. To move beyond simple comparisons, Simply Wall St estimates a Fair Ratio of about 38.30x for Gildan, a proprietary measure that reflects its earnings growth outlook, margins, industry, market cap and specific risk profile. Because this Fair Ratio is tailored to the company’s fundamentals, it can be a more reliable benchmark than broad industry or peer averages, which may blend together very different business models and risk levels.

Comparing Gildan’s current 18.46x PE to its 38.30x Fair Ratio suggests the market is assigning a sizeable discount relative to what its fundamentals might indicate.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Gildan Activewear Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple way to connect your view of Gildan Activewear’s story with a concrete financial forecast and a fair value estimate.

A Narrative on Simply Wall St is your structured story behind the numbers, where you set assumptions for future revenue, earnings, margins and the fair value you think is reasonable, then see how that compares with the current share price.

Because Narratives live inside the Community page on Simply Wall St, they are easy to create and compare. They can also help inform your decisions by continuously showing whether your Fair Value sits above or below today’s Price.

They are also dynamic, automatically updating when fresh information like earnings releases, major news or guidance changes come in. This means your story and valuation stay current without you having to rebuild the model from scratch.

For example, one Gildan Narrative might lean bullish with a fair value near CA$128.12, based on assumptions of strong margin expansion and successful brand growth. Another more cautious Narrative could anchor around CA$80.08, reflecting assumptions of slower global demand and greater ESG and supply chain risks.

Do you think there's more to the story for Gildan Activewear? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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