VF Corporation scores 25 for management and 36 for moat. The management score rests on a return on invested capital of 6.1% and a gross margin of 54.8% — figures that describe capital earning less than it costs to employ. The balance sheet carries debt at 2.69x equity, which magnifies both the returns above and the risk beneath them.
The price anchors are built on deliberately conservative assumptions. Growth is modelled at 0.8% a year, below the 1.0% actually measured over the last decade — the model caps growth rather than extrapolating a good run forwards. The exit multiple assumed is 8.0x. That produces an intrinsic value of $1.47, a 10-CAP price of $16.13 and a payback time price of $13.37, with the value zone set at the highest of the three, $16.13. Today's price of $14.41 sits inside that zone.
The price sits inside the value zone, but the business scores 36 for moat and 25 for management. Cheap and good are different tests, and only one of them is passed here.
| Price | $14.41 |
| Market cap | $5.7B |
| P/E ratio | 20.9x |
| Return on invested capital | 6.1% |
| Gross margin | 54.8% |
| Debt to equity | 2.69x |
| Free cash flow yield | 7.9% |
| Growth rate used | 0.8% |
| Growth rate measured | 1.0% |
| Exit multiple assumed | 8.0x |
| Company | Moat | Buy price |
| Gildan Activewear Inc (GIL) | 79 | $40.86 |
| Levi Strauss & Co- Class A (LEVI) | 50 | $18.13 |
| Ermenegildo Zegna Nv (ZGN) | 77 | $31.04 |
| Ralph Lauren Corporation (RL) | 69 | $264.88 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of VF Corporation rather than accepting ours.