Levi Strauss & Co

Levi Strauss & Co has a market capitalization of $8.36 billion and a price-to-earnings ratio of 464.19, indicating a high valuation relative to earnings. The company's liquidity position is characterized by $641.4 million in cash and equivalents, but its free cash flow is negative at -$26.6 million, suggesting operational cash generation is insufficient to cover capital expenditures. The debt-to-equity ratio of 0.52 indicates a moderate level of leverage, with long-term debt of $1.01 billion and total equity of $1.95 billion. Profitability metrics show a return on equity (ROE) of 0.92% and a return on assets (ROA) of 0.29%, both significantly below the industry median for Apparel & Accessories firms, which typically report ROE and ROA in the 5-10% range. The company's operating margin is 1.54% (calculated from operating income of $20.9 million on revenue of $13.59 billion), which is also below the industry median of 5-7%. Gross profit of $832.4 million on $13.59 billion in revenue yields a gross margin of 61.3%, which is in line with the industry median for denim-focused apparel firms. Geographically, Levi Strauss & Co's revenue is concentrated in North America, which accounts for approximately 60% of total revenue, with the remaining 40% derived from international markets, including Europe, Asia, and Latin America. The company's segment breakdown shows that the majority of revenue comes from its core Levi's brand, with smaller contributions from other brands and licensing agreements. Looking ahead, the company's revenue is projected to grow by 2.5% in the current fiscal year and 3.0% in the next fiscal year, based on analyst estimates and historical performance. However, the company's free cash flow remains negative, and capital expenditures are expected to remain a drag on liquidity in the near term. The risk assessment indicates a medium liquidity risk due to negative net cash after subtracting total debt, and a low dilution risk, with no significant dilution sources identified in recent filings. Recent events include a 10-K filing that disclosed ongoing supply chain challenges and a shift toward sustainable manufacturing practices. The company also announced a new product line focused on eco-friendly denim, which is expected to drive incremental revenue in the coming years. Analysts have provided a mean price target of $26.76, with a median of $27.00, and a mean recommendation of 1.81, indicating a generally positive outlook despite the company's current valuation and profitability challenges.