Unveiling Edgewell Personal Care Co (EPC)’s Value: Is It Really Priced Right? A Comprehensive Guide

Edgewell Personal Care Co (EPC, Financial) recently reported a daily loss of 5.98%, with a 3-month decline of 2.42%. Despite these figures, the company’s Earnings Per Share (EPS) stands at 2.39. This raises a crucial question: Is Edgewell Personal Care Co modestly undervalued? This analysis aims to explore the intrinsic value of Edgewell Personal Care Co, providing insights into whether its current market price reflects its true worth.

Company Overview

Edgewell Personal Care Co operates primarily in the personal care sector with a focus on Wet Shave, Sun and Skin Care, and Feminine Care products. Prominent brands under its umbrella include Edge, Skintimate, and Banana Boat, primarily contributing to its revenue generation in the United States. With a current stock price of $36.62 and a market cap of $1.80 billion, the GF Value estimates the fair market value at $43.48, suggesting that the stock might be modestly undervalued.

Understanding GF Value

The GF Value is a proprietary measure calculated based on historical trading multiples, a GuruFocus adjustment factor, and future business performance estimates. For Edgewell Personal Care Co, the GF Value suggests a fair value of $43.48 per share, indicating that the stock is currently trading below its intrinsic value. This underpricing presents a potential opportunity for investors seeking value.

Financial Strength and Stability

Investing in companies with robust financial health reduces the risk of capital loss. Edgewell Personal Care Co’s cash-to-debt ratio of 0.14, although lower than many of its peers, reflects a need for cautious analysis. The company’s financial strength is rated 5 out of 10 by GuruFocus, suggesting a fair balance sheet but room for improvement.

Profitability and Growth Prospects

Edgewell Personal Care Co has maintained profitability over the past decade, with an operating margin of 11.29%, ranking it higher than many of its industry counterparts. However, its growth metrics, while solid, indicate variability in performance. The company’s 3-year average annual revenue growth rate stands at 6.8%, reflecting moderate growth potential.

ROIC vs. WACC

Comparing the Return on Invested Capital (ROIC) and the Weighted Average Cost of Capital (WACC) provides insights into financial efficiency. Edgewell’s ROIC of 6.23 is slightly below its WACC of 6.95, suggesting challenges in generating excess returns on investments.

Conclusion

In summary, Edgewell Personal Care Co appears modestly undervalued based on its GF Value, presenting a potentially attractive opportunity for value investors. The company’s financial health and profitability are reasonable, though there are areas for improvement in growth and capital return efficiency. For a detailed financial overview, interested investors can explore Edgewell’s 30-Year Financials here.

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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.