HAS - Hasbro Is Tightening Its Belt
2024-03-09 02:28:08 ET
Summary
- Although Hasbro's annual revenue has grown by 16.98% at an average annual rate of 1.89% from 2014 to 2023, this includes its decline since its peak in 2021.
- After a rather disastrous 2023, the company has found itself in a very poor financial situation, but is attempting to expand its margins by cutting costs.
- The company currently has a long-term debt to annual operating income ratio of 8.15x. I consider anything above a 3x to be unattractive.
- Hasbro is presently trading close to the bottom end of the range for its intrinsic value based on its PEGY value.
- I currently rate HAS as a Hold.
Thesis
I have been a fan of strategy games since I was very young. I have been playing Magic: The Gathering (MtG) since 1995, and Dungeons & Dragons (D&D) since around 1998. This means that I have been a consumer of these high quality products for more than 25 years. Up until recently, Hasbro, Inc. ( HAS ) has been a responsible steward of these IP's since they were acquired and has made excellent decisions which have preserved their longevity.
However, in December I heard that Hasbro fired 1,100 employees and am now starting to lose faith in the competency of management. I believe this entire situation is primarily due to Disney ( DIS ) having such a poor showing at the box office in 2023 that their ancillary toys and action figures went undersold this most recent holiday shopping season....
Hasbro Is Tightening Its Belt