Stock Analysis

Is It Too Late To Consider Buying Hasbro, Inc. (NASDAQ:HAS)?

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NasdaqGS:HAS
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Hasbro, Inc. (NASDAQ:HAS) saw a decent share price growth in the teens level on the NASDAQGS over the last few months. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s examine Hasbro’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for Hasbro

What's the opportunity in Hasbro?

According to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average, the stock currently looks expensive. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Hasbro’s ratio of 29.68x is above its peer average of 14.35x, which suggests the stock is trading at a higher price compared to the Leisure industry. If you like the stock, you may want to keep an eye out for a potential price decline in the future. Since Hasbro’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What kind of growth will Hasbro generate?

earnings-and-revenue-growth
NasdaqGS:HAS Earnings and Revenue Growth November 9th 2021

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to more than double over the next couple of years, the future seems bright for Hasbro. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? It seems like the market has well and truly priced in HAS’s positive outlook, with shares trading above industry price multiples. However, this brings up another question – is now the right time to sell? If you believe HAS should trade below its current price, selling high and buying it back up again when its price falls towards the industry PE ratio can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on HAS for some time, now may not be the best time to enter into the stock. The price has surpassed its industry peers, which means it is likely that there is no more upside from mispricing. However, the optimistic prospect is encouraging for HAS, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. For example - Hasbro has 1 warning sign we think you should be aware of.

If you are no longer interested in Hasbro, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

What are the risks and opportunities for Hasbro?

Hasbro, Inc., together with its subsidiaries, operates as a play and entertainment company.

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Rewards

  • Trading at 22.7% below our estimate of its fair value

  • Earnings are forecast to grow 20.03% per year

Risks

  • Debt is not well covered by operating cash flow

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