One-glance verdict
Overvalued
$120.60 our estimate vs market $152.20
Wall Street consensus: $227.67 (88.8% higher than our fair-value estimate)
26% above our estimate, beyond the bull case
Fundamentals snapshot
Hermès International Société en commandite par actions
HESAY · PNK · Consumer Cyclical · Luxury Goods
Current price
$152.20
52-week range
$151.25 - $265.89
Market cap
$159.42B
Balance sheet
Healthy
121.73x Strong cushion
Net cash $11.52B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
0 Risks
3 rewards · 0 risks
- Reward Revenue grew 5.5% last year.
- Reward Returns 25.5% on equity, ahead of 50% of its peers.
- Reward Free cash flow was positive in 4/10 years.
What this company does
Hermès International Société en commandite par actions
Hermès is a French luxury company best known for its iconic and hard-to-get handbags, but it also sells everything from silk scarves to perfume. By tightly controlling its own manufacturing and limiting how many items it makes, Hermès maintains an exclusive image that allows it to charge very high prices. This strategy results in very high profit margins (the percentage of each sale that the company keeps after paying its costs), making the business very profitable.
How the company got here
Hermès started in 1837 in Paris as a workshop making high-quality horse harnesses and saddles for European noblemen. Over generations, the family-run business expanded, moving into handbags in the 1920s and creating iconic items like the 'Kelly' bag and silk scarves in the 1930s. The company has always focused on exceptional craftsmanship and quality materials, which has built its reputation for luxury. A key moment was going public with a stock offering in 1993, which allowed for growth while the family maintained control of the company's direction.
What it actually does
Hermès is a French company that creates a wide range of high-end luxury products. Think of them as 'contemporary artisans' who make everything from famous leather handbags, like the Birkin and Kelly bags, to clothing, silk scarves, ties, perfumes, watches, jewelry, and even furniture. They sell these items through their own network of around 300 exclusive stores worldwide rather than in every department store. The company is known for its focus on a single brand, Hermès, unlike competitors who own many different luxury brands.
Leather Goods and Saddlery
This is the company's largest and most famous business, making up nearly half of its sales. This segment produces the iconic and highly sought-after handbags like the Birkin and Kelly, along with wallets, belts, and equestrian items like saddles. Customers, who are typically wealthy individuals, pay for the exceptional craftsmanship, high-quality leather, and the status that comes with owning these exclusive items. The extreme care in its production process is a core part of the brand's identity.
Ready-to-Wear and Accessories
This division is the second-largest part of Hermès, contributing more than a quarter of the company's revenue (the total money it brings in). It includes men's and women's clothing, shoes, hats, gloves, and jewelry. This allows the company to offer a full lifestyle range beyond its leather goods, dressing its customers from head to toe. Shoppers in this category are buying into the overall Hermès look and quality, which extends beyond just the famous handbags.
Silk and Textiles
This segment, while smaller, is central to the brand's identity and accounts for a notable slice of revenue. It is best known for its iconic silk scarves ('carrés') and ties, which are famous for their intricate designs and high-quality printing. These items often serve as a more accessible entry point for customers to own a piece of the Hermès brand. People buy these for their artistic value and as a recognizable symbol of luxury.
Perfume and Beauty
A growing part of the business, this segment creates and sells fragrances for men and women, as well as a newer line of makeup. This allows a much broader audience to experience the Hermès brand at a lower price point than a handbag or a piece of clothing. Customers are paying for a scent or cosmetic product that carries the prestige and quality standards of the Hermès name.
Watches
Hermès has its own watchmaking subsidiary in Switzerland, where it produces high-end timepieces. This business combines Swiss watchmaking expertise with the brand's Parisian design aesthetic. While a smaller part of the overall company, it is a significant player in the luxury watch market. Customers in this segment are buying a piece of precision engineering and a fashion accessory that reflects the brand's long history.
What management is betting on now
Management's strategy is focused on long-term, controlled growth rather than chasing short-term sales. They are betting on maintaining the brand's exclusivity by carefully managing production to ensure demand is always a little higher than supply, which protects their ability to set prices. The company continues to invest heavily in its own manufacturing, mostly in France, and in training new artisans to preserve the quality of its craftsmanship. This approach, combined with running their own stores, gives them tight control over their brand image and customer experience.
Price history
How the share price has moved
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Is it cheap or expensive?
Fair value $120.60 vs current price $152.20
Wall Street consensus is the average analyst price target: $227.67 (88.8% higher than our fair-value estimate).
Our most-likely fair value is $120.60 a share — about 20.8% below today's price of $152.20, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Healthy
Net cash $11.5B - more cash than debt. Interest coverage 121.7x.
Net debt
$-11.52B
Interest coverage
121.73x
Hermès International Société en commandite par actions's profit covers its interest bill about 121.7 times over. which is stronger than every peer shown here.
Healthy
Worse cushion
Baseline
Better cushion
HESAY
BASELINE
Hermès International Société en commandite par actions
Total debt $2.62B Interest coverage 121.73x This is the baseline the peer rows are being compared against.
Total debt $42.69B Interest coverage 15.35x -87% vs HESAY Carries about 7.9x less debt cushion than HESAY.
Total debt $20.58B Interest coverage 2.62x -98% vs HESAY Carries about 46.5x less debt cushion than HESAY.
Total debt $15.53B Interest coverage 15.20x -88% vs HESAY Carries about 8.0x less debt cushion than HESAY.
Total debt $3.96B Interest coverage 34.68x -72% vs HESAY Carries about 3.5x less debt cushion than HESAY.
Total debt $1.39B Interest coverage 1.01x -99% vs HESAY Carries about 120.2x less debt cushion than HESAY.
What you should know
The case for and against HESAY
3 Rewards
0 Risks
Rewards
-
Revenue grew 5.5% last year.
-
Returns 25.5% on equity, ahead of 50% of its peers.
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Free cash flow was positive in 4/10 years.
Risks
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
30.87x
Forward P/E
25.63x
P/B
7.26x
P/S
9.88x
EV/EBITDA
21.16x
PEG ratio
3.00x
Profitability
How much profit each dollar creates
Gross margin
71.3%
Operating margin
42.2%
Net margin
28.0%
ROE
25.5%
ROA
18.1%
Health
Liquidity and balance-sheet strength
Debt / equity
0.12x
Current ratio
4.54x
Quick ratio
3.63x
Total debt
$2.62B
Total cash
$14.14B
Growth
How the business has been compounding
Revenue TTM
$18.53B
Revenue 5Y CAGR
11.3%
EPS TTM
4.93
EPS 5Y CAGR
10.3%
Cash flow
How much cash the business throws off
Operating CF TTM
$6.17B
Free CF TTM
$4.84B
FCF margin
26.1%
Dividend
Shareholder payout
Yield
1.4%
Payout ratio
41.8%
Last ex-div date
2026-04-22