Hanesbrands Inc.: A Bargain Stock Worth Watching?

Hanesbrands Inc. (NYSE:HBI) stock has seen a 19% price growth over the last few months, but the company's share price has traded much higher in the past year. According to the price multiple model, HBI is still a bargain with a price-to-earnings ratio below the Luxury industry average. The stock is expected to see a 68% profit growth over the next couple of years, making it a compelling investment opportunity for growth investors.

Hanesbrands Inc. (NYSE:HBI) has experienced a notable 19% price growth over the last few months, yet its share price has traded significantly higher over the past year. Despite this recent surge, the company remains undervalued according to the price multiple model, with a price-to-earnings ratio below the Luxury industry average [1]. This presents an attractive investment opportunity for growth investors, as analysts project a 68% profit growth over the next couple of years.

The company's latest earnings report indicates robust growth in earnings and margins, raising full-year guidance despite challenges in the intimate apparel category [2]. Hanesbrands reported a 60% increase in earnings per share, driven by higher margins and lower interest expenses from debt reduction. The company's strategic focus on cost savings, productivity initiatives, and successful execution of its growth strategy has driven these impressive results.

Hanesbrands has also strengthened its balance sheet by paying down $1.5 billion of debt and reducing leverage by nearly 2.5 turns over the past two years. This financial discipline has positioned the company well to navigate potential tariff impacts in the fourth quarter, with strategic pricing and cost actions in place to mitigate these costs.

While the intimate apparel category faces consumer headwinds and the international business faces top-line pressure, Hanesbrands has demonstrated resilience and adaptability. The company's focus on innovation, brand investment, and strategic partnerships, such as its exclusive distribution agreement with SNS in the printwear channel, underscores its commitment to growth and profitability.

Investors should also consider Hanesbrands' strong analyst ratings and price targets. Despite a Hold rating among analysts, top-rated analysts believe that Hanesbrands offers better value than some other stocks in the market [1]. The company's average price target of $5.75, as of July 2025, reflects a market valuation that is relatively low compared to its expected earnings growth.

In conclusion, Hanesbrands Inc. presents an intriguing investment opportunity for growth investors seeking undervalued stocks with strong growth prospects. The company's recent performance, financial health, and strategic initiatives make it a compelling choice for those looking to capitalize on the potential for significant profit growth over the next few years.

References:
[1] https://www.marketbeat.com/instant-alerts/filing-mackenzie-financial-corp-increases-stock-holdings-in-hanesbrands-inc-nysehbi-2025-08-07/
[2] https://www.gurufocus.com/news/3048419/hanesbrands-inc-hbi-q2-2025-earnings-call-highlights-strong-performance-drives-upgraded-fullyear-outlook