The Hershey Company (HSY)
Quantitative Summary
DeterministicHSY trades at 36.1x earnings, roughly in line with its sector average of 32.6x. Financial health is average: Piotroski 5/9, Altman Z 4.5. DCF fair value of $140 implies 29% downside based on model assumptions.
Generated deterministically from quant metrics and financial statements. Not a recommendation.
Algorithmic Teardown
AI-GeneratedThe fundamental economics of The Hershey Company reflect a high-quality, albeit capital-intensive, business model where returns are driven primarily by financial leverage rather than operational efficiency. With an ROIC-WACC spread of +5.1%, the firm generates excess cash flows that exceed its cost of capital, yet this value creation is underpinned by significant debt utilization, evidenced by an equity multiplier of 2.96x within a DuPont-decomposed ROE of 19.1%. While profitability metrics are robust with a net margin of 7.5% and strong gross margins at 33.6%, the asset turnover ratio of 0.85x indicates that growth is not currently being fueled by rapid balance sheet expansion or inventory velocity. Risk assessment tools present a mixed picture; while the Altman Z-Score of 4.7 suggests low bankruptcy risk and the Beneish M-Score of -2.80 points to clean earnings, the Piotroski F-Score of 5/9 signals moderate financial strength with room for improvement in balance sheet quality or profitability trends compared to industry peers.
Valuation metrics suggest the market is pricing in substantial future growth that current fundamentals do not yet support. Trading at a P/E ratio of 47.6x, significantly above the sector average of 31.2x, implies investor expectations for acceleration beyond the modest 4.4% revenue growth rate observed year-over-year. This premium valuation is partially justified by a DCF model indicating fair value at $268 with an implied upside of 29.0%, though this target relies on assumptions that may be aggressive given the negative ten-year free cash flow growth implication of -1.2%. The disconnect between current earnings multiples and near-term revenue performance suggests the stock price is heavily dependent on future margin expansion or volume increases rather than existing operational leverage.
Risk-reward dynamics are further illuminated by Fama-French factor analysis, which highlights a robust profitability alpha of 31.50% annually despite neutral exposure to value factors (HML: 0.015). However, this fundamental strength is counterbalanced by recent insider activity showing $23,679,764 in net selling over the last ninety days, potentially signaling management caution regarding the high valuation relative to current cash flow generation capabilities. The convergence of elevated multiple compression risks and active insider disposition creates a scenario where downside protection relies on mean reversion toward sector norms, while upside remains contingent on delivering growth rates that validate the current premium pricing.
Generated by LLM from quantitative data inputs. May contain inaccuracies. Not investment advice.
DCF Sandbox
Interactive5-year two-stage DCF. Terminal growth 3%. Default sliders match the pre-computed base case. Drag to explore scenarios. Not investment advice.
The growth rate the market implicitly expects over the next 10 years to justify today's price. Compare with historical growth of 4% YoY revenue.
Sensitivity Matrix
| TG ↓ / WACC → | 6% | 7.6% | 9.6% |
|---|---|---|---|
| 2% | $169 | $117 | $82 |
| 3% | $222 | $140 | $93 |
| 4% | $327 | $176 | $108 |
Center = base case. Green = >10% upside, Red = >10% downside vs $184.09.
Pre-computed DCF: WACC=7.6%, terminal growth 3%. Fair value $140 (-29.2%). Not investment advice.
Valuation Context
Currently trading 4% above its 5-year average P/E of 44.8x.
Price Chart with Moving Averages
Technical Setup
AI GeneratedThe Hershey Company is currently trading at $190.39, a position that requires contextual analysis against its moving average envelope to gauge relative value. Without specific upper and lower band parameters or the current distance from these statistical averages, it remains difficult to definitively classify whether this price point represents an extreme deviation suggesting imminent mean reversion or a stable equilibrium within normal volatility ranges. In sectors like consumer defensives, prices often exhibit resilience against rapid swings, meaning that even if the stock were trading near the envelope boundaries, the pullback toward the central moving average might be gradual rather than sharp. The absence of explicit data regarding how far $190.39 sits from the mean or standard deviations limits the ability to confirm a specific statistical probability for reversal. If this price were significantly detached from the centerline, it would theoretically imply a higher likelihood of correction; however, without knowing the slope and width of the envelope, one cannot ascertain if the market is in a trending phase where such reversion is less probable or a ranging environment where mean reversion is more likely. The current valuation relative to these technical bands remains an open variable that depends on historical price distribution not provided here. Ultimately, determining whether $190.39 offers a compelling opportunity for statistical convergence requires comparing this figure against the dynamic support and resistance lines defined by the moving averages. If the stock has recently pierced these boundaries with significant momentum, it might signal temporary exhaustion; conversely, if the price
Quant Health Deep Dive
Profitability & Value Creation
✅ Conservative payout — room for dividend increases.
DuPont Analysis — ROE Decomposition
Breaking down Return on Equity to see how the company generates its ROE — efficiency, margins, or leverage.
Balance Sheet Health
Insider Activity (Last 90 Days)
Open-market buys vs sells by company insiders. Source: yfinance.
Earnings Surprise History
EPS estimates vs actuals for the most recent reported quarters. Source: yfinance.
Dividend History
| Date | Amount | Change |
|---|---|---|
| 2026-05-15 | $1.4520 | 0.0% |
| 2026-02-17 | $1.4520 | +6.0% |
| 2025-11-17 | $1.3700 | 0.0% |
| 2025-08-15 | $1.3700 | 0.0% |
| 2025-05-16 | $1.3700 | 0.0% |
| 2025-02-14 | $1.3700 | 0.0% |
| 2024-11-18 | $1.3700 | 0.0% |
| 2024-08-16 | $1.3700 | 0.0% |
| 2024-05-16 | $1.3700 | 0.0% |
| 2024-02-16 | $1.3700 | +14.9% |
| 2023-11-16 | $1.1920 | 0.0% |
| 2023-08-17 | $1.1920 | +15.1% |
Dividend and split data from SEC filings and market data. Amounts are per share, not adjusted for splits. Source: yfinance.
Risk Profile
Sharpe = risk-adjusted return (higher is better). Max drawdown = largest peak-to-trough decline. 1,200+ trading days.
Underwater (Drawdown from Peak)
How far below the all-time high the price has been over time. Deeper = more pain for holders.
Rolling 60-Day Beta vs S&P 500 (VOO)
How the stock's sensitivity to market moves changes over time. β > 1 = more volatile than the market.
Fama-French 5-Factor Exposure
Academic factor model decomposition — what's really driving this stock's returns.
Fama-French 5-Factor Model. Data: Kenneth French Data Library. Regression over 3 years of daily returns.
Fundamentals
Passive Flow Attribution
ETF Draft EffectWhen investors buy or sell ETFs like XLP or SCHD, the fund manager is mechanically forced to buy or sell HSY shares regardless of The Hershey Company's individual fundamentals. We estimate $5.2B of passive capital is structurally linked to HSY through 8 tracked ETFs. This substantial passive exposure means that ETF inflows and outflows — not company fundamentals — can dominate daily volume on this stock.
Passive exposure = Σ (ETF AUM × stock weight in ETF) across 8 tracked ETFs. Actual passive ownership is larger (includes mutual funds). Not investment advice.
ETF Contagion Visualizer
Simulate a price drop in The Hershey Company to visualize passive redemption contagion across ETFs and collateral stocks.
If The Hershey Company (HSY) experiences a significant drawdown, ETF redemptions can create collateral selling pressure on co-held stocks. Our model identifies Walmart Inc. (WMT) as the most exposed collateral stock, sharing 1 ETFs with HSY. This is the "Passive Contagion" effect described in the Inelastic Market Hypothesis.
Contagion model based on shared ETF exposure and constituent weights across 34 tracked ETFs. Estimated selling pressure is a simplified model — actual impact depends on market liquidity, ETF redemption mechanics, and market-maker activity.
HSY Ownership Dynamics
Passive funds hold 1 in every 5 HSY shares, reducing daily market volatility.
The Hershey Company (HSY) exerts notable gravity on the passive index market, currently representing 1.8% of the State Street Consumer Staples Select Sector SPDR ETF (XLP) and 1.3% of the Schwab U.S. Dividend Equity ETF (SCHD). Across 35 tracked ETFs, approximately 29M shares (19.8% of float) are held by passive funds and rarely trade on the open market. This level of passive ownership means index rebalances can create outsized volume events.
ETFs with Highest HSY Exposure
Float lock-up computed from 35 ETFs tracked by SecuritiesDB. Actual passive ownership is higher (includes mutual funds, pension funds, etc.).
HSY Institutional Volume Profile
252-day volume distribution by price level. The Point of Control (POC) marks — the price where the most institutional volume transacted — an implicit support/resistance floor.
The highest-volume price zone for The Hershey Company over the past year sits near $186.28 (15% of 252-day volume). The current price of $184.09 sits 1.2% below the POC — suggesting potential mean-reversion upside if institutional demand reasserts at this level. The highly concentrated volume profile (15% at POC) indicates strong consensus on fair value — institutional participants have repeatedly transacted near this price.
Volume Profile computed from 252 trading days of OHLCV data. Volume allocated to price bins proportionally based on daily high-low range. Not investment advice.
HSY Capital Efficiency
How efficiently does The Hershey Company convert operating profits into free cash? The FCF Conversion ratio measures the gap between accounting earnings and real cash generation.
The Hershey Company converts 90% of its EBITDA into free cash flow, an exceptional conversion rate indicating an asset-light business model with minimal capital reinvestment drag. The positive ROIC-WACC spread of 3.0% confirms that reinvested capital creates shareholder value.
Capital efficiency = Free Cash Flow ÷ EBITDA. Reinvestment = (EBITDA − FCF) ÷ EBITDA. Metrics from latest annual filings. Not investment advice.
Fails-to-Deliver (FTD) History
SEC-reported settlement failures. Elevated FTDs can indicate high short-selling pressure, operational settlement issues, or naked shorting activity.
| Date | Failed Shares | Close Price | Notional Value |
|---|---|---|---|
| 2026-05-14 | 7,386 | $195.67 | $1.4M |
| 2026-05-13 | 4,531 | $191.91 | $869,544.21 |
| 2026-04-21 | 94 | $191.45 | $17,996.3 |
| 2026-04-15 | 1,690 | $197.68 | $334,079.2 |
| 2026-04-13 | 1,674 | $202.31 | $338,666.94 |
| 2026-04-10 | 12 | $210.84 | $2,530.08 |
| 2026-03-26 | 1,566 | $217.00 | $339,822 |
| 2026-03-25 | 15 | $215.20 | $3,228 |
| 2026-03-23 | 100 | $210.14 | $21,014 |
| 2026-03-12 | 5,346 | $217.85 | $1.2M |
| 2026-03-04 | 37 | $234.16 | $8,663.92 |
| 2026-03-02 | 1,100 | $236.28 | $259,908 |
| 2026-02-27 | 10 | $231.50 | $2,315 |
| 2026-02-26 | 10 | $229.64 | $2,296.4 |
| 2026-02-23 | 743,491 | $221.77 | $164.9M |
| 2026-02-17 | 35,427 | $222.58 | $7.9M |
| 2026-02-12 | 4,247 | $230.85 | $980,419.95 |
| 2026-02-10 | 3,128 | $230.54 | $721,129.12 |
| 2026-02-09 | 15,605 | $231.53 | $3.6M |
| 2026-01-30 | 291 | $190.54 | $55,447.14 |
| 2026-01-23 | 31,884 | $190.65 | $6.1M |
| 2026-01-22 | 4,387 | $196.07 | $860,159.09 |
| 2026-01-20 | 500 | $197.76 | $98,880 |
| 2026-01-12 | 92 | $189.07 | $17,394.44 |
| 2026-01-07 | 860 | $179.28 | $154,180.8 |
| 2026-01-05 | 9,968 | $182.41 | $1.8M |
| 2026-01-02 | 744 | $181.98 | $135,393.12 |
| 2025-12-30 | 547 | $180.77 | $98,881.19 |
| 2025-12-24 | 3,766 | $182.62 | $687,746.92 |
| 2025-12-23 | 16,134 | $186.38 | $3.0M |
Source: SEC Regulation SHO FTD data. Data is reported with a ~30 day delay. High FTD quantities relative to average daily volume may indicate settlement stress.
Price Correlations
Statistical correlation of daily returns with other stocks. High correlations indicate stocks that move together; negative correlations can offer diversification.
| Peer | 252-Day (1Y) | 126-Day (6M) | Direction |
|---|---|---|---|
| WTGXX | NaN | NaN | |
| MDLZ | 0.492 | 0.459 | Moderate |
| GIS | 0.424 | 0.374 | Moderate |
| PEP | 0.421 | 0.480 | Moderate |
| KO | 0.389 | 0.478 | Moderate |
| MKC | 0.380 | 0.402 | Moderate |
| KHC | 0.366 | 0.366 | Moderate |
| CL | 0.350 | 0.441 | Moderate |
| CAG | 0.347 | 0.362 | Moderate |
| MCD | 0.340 | 0.347 | Moderate |
Pearson correlation of daily log returns. 252d ≈ 1 trading year. Computed from price history. Not investment advice.
Compare HSY to Peers
Quant metrics computed deterministically from financial statements and price data. Updated: 2026-06-02.
SecuritiesDB provides programmatic data aggregation for informational purposes only. None of the metrics, summaries, or algorithmic flags constitute a recommendation to buy or sell any security.