Hillenbrand, Inc. (HI) Stock Analysis
Hillenbrand, Inc. (HI) Stock Analysis
Overall Grade: F (Concerning)
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Hillenbrand, Inc. faces challenges in financial performance that warrant careful analysis.
Key Metrics:
| Metric | Value | Context |
|---|---|---|
| ROIC | -35.3% | Below expectations |
| FCF Margin | -1.3% | Cash flow pressure |
Investment Thesis: Financial metrics indicate concerning business quality with areas requiring attention.
What is Hillenbrand, Inc.'s Profitability and ROIC?
Hillenbrand, Inc.'s return on invested capital of -35.3% is below the typical cost of capital. Gross margin of 33.7% with operating margin at 33.7% reflects the company's moderate market position.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Return on Invested Capital (ROIC) | -35.3% | Red flag | Below cost of capital |
| Return on Equity (ROE) | 2.5% | Warning | Moderate equity returns |
| Gross Margin | 33.7% | Good | Competitive pricing environment |
| Operating Margin | 33.7% | Excellent | Efficient operations |
How Strong is Hillenbrand, Inc.'s Cash Flow Quality?
Hillenbrand, Inc. generated $-32.3M in free cash flow over the trailing twelve months, representing a -1.3% margin. FCF was positive in N/A of the last 8 quarters, indicating variable cash generation.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Free Cash Flow Margin | -1.3% | Red flag | Thin cash margins |
| Free Cash Flow (TTM) | $-32.3M | Red flag | Cash burn |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
What is Hillenbrand, Inc.'s Financial Health?
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Net Cash Position | $-1.4B | Warning | Net debt position |
Is Hillenbrand, Inc. Stock Overvalued or Undervalued?
Hillenbrand, Inc. trades at a P/E of 65.1x, representing a premium to the sector median of N/A. Free cash flow yield of -1.4% reflects market expectations for growth.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| P/E Ratio | 65.1x | Warning | Premium valuation |
| EV/Sales | 1.5x | Excellent | Attractive revenue multiple |
| FCF Yield | -1.4% | Warning | Lower cash yield |
| Dividend Yield | 3.0% | Adequate | Meaningful income |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | -35.3% | Bottom 10% | -4.4x below |
| Free Cash Flow Margin | -1.3% | Bottom 10% | -0.2x below |
| Gross Margin | 33.7% | Top 50% | 1.0x above |
| Operating Margin | 33.7% | Top 5% | 4.2x above |
| Return on Equity (ROE) | 2.5% | Bottom 50% | 0.3x below |
| P/E Ratio | 65.1x | N/A | - |
Rating Thresholds
Return on Invested Capital (ROIC)
Measures how efficiently a company uses its debt and equity capital to generate profits. ROIC above 15% typically indicates a competitive moat.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 20% | Exceptional capital efficiency, strong competitive moat |
| Good | 12% - 20% | Above-average returns, sustainable competitive position |
| Adequate | 8% - 12% | Around cost of capital, moderate competitive position |
| Warning | 4% - 8% | Below cost of capital, value may be eroding |
| Red flag | < 4% | Significant capital destruction, fundamental issues |
Current: -35.3% (Red flag)
Free Cash Flow Margin
The percentage of revenue converted to free cash flow. Higher margins indicate stronger cash generation and business quality.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 20% | Strong cash generation, high-quality business |
| Good | 10% - 20% | Healthy cash conversion |
| Adequate | 5% - 10% | Moderate cash generation |
| Warning | 0% - 5% | Thin cash margins, capital intensive |
| Red flag | < 0% | Cash burn, potential liquidity concerns |
Current: -1.3% (Red flag)
Gross Margin
Revenue minus cost of goods sold as a percentage. Higher gross margins indicate pricing power and competitive advantage.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 50% | Strong pricing power and competitive moat |
| Good | 30% - 50% | Healthy margins, differentiated product |
| Adequate | 20% - 30% | Moderate margins, competitive industry |
| Warning | 10% - 20% | Thin margins, commodity-like business |
| Red flag | < 10% | Very thin margins, structural challenges |
Current: 33.7% (Good - Top 50% of sector (median: 33.4%))
P/E Ratio (Price-to-Earnings)
Stock price divided by earnings per share. Lower P/E may indicate undervaluation, while higher P/E suggests growth expectations.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | < 15x | Attractively valued, potential opportunity |
| Good | 15x - 25x | Fair value for quality company |
| Adequate | 25x - 35x | Growth premium, justify with earnings growth |
| Warning | 35x - 50x | High expectations priced in |
| Red flag | > 50x or negative | Speculative valuation or losses |
Current: 65.1x (Warning)
Free Cash Flow Yield
Free cash flow per share divided by stock price. Higher FCF yield indicates better cash return relative to valuation.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 8% | High cash return, potential value opportunity |
| Good | 5% - 8% | Solid cash yield |
| Adequate | 3% - 5% | Moderate cash return |
| Warning | 1% - 3% | Low cash yield, growth expectations |
| Red flag | < 1% | Minimal cash return to shareholders |
Current: -1.4% (Red flag)
Frequently Asked Questions
Q: What is Hillenbrand, Inc.'s Return on Invested Capital (ROIC)?
Hillenbrand, Inc. (HI) has a trailing twelve-month Return on Invested Capital (ROIC) of -35.3%. This compares below the sector median of 8.0%. An ROIC below 8% suggests the company may be destroying shareholder value.
Q: What is Hillenbrand, Inc.'s Free Cash Flow Margin?
Hillenbrand, Inc. (HI) has a free cash flow margin of -1.3%, generating $-32.3 million in free cash flow over the trailing twelve months. Negative free cash flow means the company is consuming cash, which may require financing.
Q: Is Hillenbrand, Inc. stock overvalued or undervalued?
Hillenbrand, Inc. (HI) trades at a P/E ratio of 65.1x, which is above the sector median of N/A. The EV/Sales multiple is 1.5x.
Q: Does Hillenbrand, Inc. pay a dividend?
Hillenbrand, Inc. (HI) currently pays a dividend yield of 3.0%. Including share buybacks, the total shareholder yield is 3.0%. This yield is moderate, suggesting a balance between income and growth reinvestment.
Q: What is Hillenbrand, Inc.'s revenue and earnings growth?
Hillenbrand, Inc. (HI) declined revenue by 19.2% year-over-year. Revenue decline may indicate market challenges or industry headwinds.
Q: How does Hillenbrand, Inc. compare to competitors in Industrials?
Compared to other companies in Industrials, Hillenbrand, Inc. (HI) shows: ROIC of -35.3% is below the sector median of 8.0% (-4.4x median). FCF margin of -1.3% trails the sector median of 5.4%. Gross margin at 33.7% is 0.4 percentage points higher than sector peers. These rankings are based on MetricDuck's analysis of all Industrials companies with available SEC filings.
Q: What warning signs should I watch for with Hillenbrand, Inc.?
Investors in Hillenbrand, Inc. (HI) should monitor these potential warning signs: 1) FCF margin is thin at -1.3%, leaving limited buffer for economic downturns. Regular monitoring of SEC filings and quarterly trends is recommended.
Data Source: Data sourced from 10-K filed 2025-11-19. TTM metrics as of Q4 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
This analysis is for informational purposes only and does not constitute investment advice.