HGG  Hhgregg Inc.

Exchange

NYSE

Sector

Consumer Services

Industry

Consumer Electronics/Video Chains

Market Cap.

6.99M

Vuru Grade

41.33/100

Current Price

$0.25
-0.1374 (-35.3395%)

Growth Price

$5.60
Undervalued by 2,127.91%

Stability Price

$85.97
Undervalued by 34,095.58%

Company Metrics

  • P/E 888.75
  • P/S 0.0061
  • P/B 0.2801
  • EPS -3.351
  • Cash ROIC 1.33%
  • Cash Ratio 0.02
  • Dividend 0 / 0%
  • Avg. Vol. 355,637.00
  • Shares 27.80M
  • Market Cap. 6.99M

Company Description

hhgregg, Inc. operates as a specialty retailer of consumer electronics, home appliances, and related services. The company offers video products, such as flat panel televisions, blu-rays, and DVD players; appliances, including washers and dryers, refrigerators, cooking ranges, dishwashers, freezers, and air conditioners; and digital camcorders, digital cameras, gaming bundles, home theater receive... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

hhgregg: The End Is Near
Seeking Alpha - Feb 24, 2017
I had been so bullish on hhgregg (NYSE:HGG) and had been recommending to investors along the way in this recent article and this older article, I now perform the post-mortem analysis on my faulty recommendation.
Report: Indianapolis-based HHGregg is preparing to file for bankruptcy - WRTV Indianapolis
Bloomberg: hhgregg Preparing For Bankruptcy Filing - Inside INdiana Business
HHGregg Said to Hire Advisers to Help Cope With Retail Woes
Bloomberg - Feb 15, 2017
HHGregg Inc. is turning to investment banks including Miller Buckfire & Co. for help as the electronics and furniture retailer battles weak sales, according to people with knowledge of the matter.
hhgregg Exploring 'Strategic Alternatives' - Inside INdiana Business
Hhgregg +21% as it sets plan to explore strategic alternatives - Seeking Alpha
hhgregg: Turnaround Play Or Melting Ice Cube?
Seeking Alpha - Dec 14, 2016
hhgregg, Inc. (NYSE:HGG), is a mid-sized retailer of electronics and appliances. The Indianapolis-based company operates 227 stores in 20 states.
Hhgregg: Results Are Terrible, But This Is No Surprise
Seeking Alpha - Jan 27, 2017
Results are in at hhgregg (NYSE:HGG) and they are terrible, same store sales -22.2%. But this should come as no surprise to the market as the market has known for quite sometime that after its profit warning in early January that the all-important ...
Analyst Reviews on Overselling: hhgregg, Inc. (NYSE:HGG) - Post Registrar
HHGregg, Inc. (HGG) Hits New 52-Week Low on Disappointing Earnings - The Cerbat Gem
Business briefs: HHGregg said to prepare for bankruptcy as soon as next month ...
Pittsburgh Post-Gazette - 15 hours ago
HHGregg Inc., the 61-year-old seller of appliances and electronics, is preparing to file for bankruptcy as it grapples with slumping sales, according to people familiar with the matter.
Rough News For hhgregg
Inside INdiana Business - Feb 3, 2017
Indianapolis-based hhgregg Inc. (NYSE: HGG) has announced restructuring plans that have led to 100 employees losing their jobs.
Price Forecast For HHGregg, Inc. (NYSE:HGG) Stock At $0.7 - Transcript Daily
The HHGregg, Inc. (HGG) Sets New 12-Month Low After Earnings Miss - DailyQuint
hhgregg (HGG) Stock Down on Wider-than-Expected Q3 Loss
Yahoo Finance - Jan 27, 2017
Appliance and electronics retailer, hhgregg, Inc. HGG reported a wider-than-expected loss in the third quarter of fiscal 2017.
Stumbling HHGregg shares face delisting from stock exchange
Indianapolis Business Journal - Feb 6, 2017
HHGregg Inc. faces the risk of delisting from the New York Stock Exchange because its stock price has fallen below $1. The exchange notified HHGregg that it is not in compliance with its minimum stock-price requirements or its requirements that it its ...
Undaunted, HHGregg CEO sees clear path to turnaround
Indianapolis Business Journal - Feb 11, 2017
Greg Andrews HHGregg Inc. is surrounded by doubters these days. Among them are investors, who have knocked the shares down to 46 cents apiece, and even vendors, which revoked the company's credit and began demanding cash on delivery after the ...
Justices question meaning of EBITDA in HHGregg manager bonus case
Indiana Lawyer - Feb 23, 2017
After a key member of HHGregg's leadership team died in 2012, his $40 million life insurance policy was paid out to the company and brought that year's total earnings to $143.5 million.
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for HGG to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate HGG's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$0.25 Current Price

$5.60 Growth Price (DCF)

Undervalued by 2,127.91%


Growth Rate Assumed by Market: -500.00%


Future Free Cash Flow Growth Rate: 0.0%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$85.97 Stability Price (EPV)

Undervalued by 34,095.58%


Discount Rate: 15.0%

$1.07 NCA Price

Undervalued by 325.89%

$15.47 Book Price

Undervalued by 6,054.33%


Poor Cash Return on Invested Capital over the past 5 years

HGG has been unable to consistently generate sufficient returns from its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

HGG has only created $1.33 of cash for every $100 invested.
Figures in USD. Fiscal year ends in March
20122013201420152016
Free Cash Flow 33.98M 12.03M 60.39M -9.76M -34.61M
divided by
Invested Capital 383.86M 387.89M 344.46M 223.13M 187.57M
Cash ROIC 8.85% 3.10% 17.53% -4.37% -18.45%

Very Poor Return on Equity over the past 5 years

HGG has shown an inability to deliver results for shareholders. This could be due to poor management, HGG operating in a highly competitive industry, or having a weak business in general.

HGG has generated a $18.33 loss for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in March
20122013201420152016
Net Income 81.37M 25.37M 228,000.00 -132.75M -54.88M
divided by
Stockholders' Equity 359.52M 346.66M 307.13M 173.59M 121.35M
Return on Equity 22.63% 7.32% 0.07% -76.47% -45.22%

Good Business Performance over the past 10 years

It's likely HGG has been unable to maintain profitability in tough economic times, making it a somewhat cyclical business. The other possibility is HGG has expended significant capital on items such as property, plant and equipment in specific years. Look for correlations.

HGG has created positive free cash flow for 7 or 8 of the past 10 years.
Figures in USD. Fiscal year ends in March
2007200820092010201120122013201420152016
Free Cash Flow 31.17M 25.46M 7.74M 45.72M -941,000.00 33.98M 12.03M 60.39M -9.76M -34.61M

Weak Balance Sheet

HGG's financial position is not ideal. The key is to check whether HGG is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in March
2007200820092010201120122013201420152016
Cash 1.50M 1.87M 21.50M 157.84M 72.79M 59.24M 48.59M 48.16M 30.40M 3.70M
Current Assets 145.76M 163.49M 186.13M 404.75M 330.21M 394.95M 419.91M 392.59M 328.39M 293.77M
Total Assets 290.53M 329.92M 350.38M 605.92M 549.65M 642.78M 676.42M 625.96M 467.63M 385.35M
Current Liabilities 127.26M 135.37M 110.47M 215.50M 165.35M 199.68M 239.94M 233.34M 214.10M 194.08M
Total Liabilities 274.23M 248.25M 225.22M 352.51M 233.06M 283.26M 329.76M 318.83M 294.04M 264.00M
Stockholder' Equity 16.29M 81.67M 125.15M 253.41M 316.59M 359.52M 346.66M 307.13M 173.59M 121.35M
Current Ratio 1.15 1.21 1.68 1.88 2.00 1.98 1.75 1.68 1.53 1.51
TL-to-TA 0.94 0.75 0.64 0.58 0.42 0.44 0.49 0.51 0.63 0.69

Consistent Reinvestment of Profits over the past 10 years

HGG has consistently retained profits. This may put HGG in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, HGG can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in March
2007200820092010201120122013201420152016
Retained Earnings -97.40M -76.00M -39.50M -300,000.00 47.91M 129.28M 154.65M 154.88M 22.13M -32.75M
Retained Earnings Growth - 21.98% 48.03% 99.24% 16,069.33% 169.85% 19.62% 0.15% -85.71% -247.96%

Highly Competitive Industry over the past 10 years

It's likely that HGG is in an industry with low barriers to entry, spurring high competition. If Gross Margins are at least satisfactory, it's likely HGG invests heavily in R&D and Sales, General & Administrative expenses.

Only $0.65 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in March
2007200820092010201120122013201420152016
Net Income 21.36M 21.41M 36.50M 39.20M 48.21M 81.37M 25.37M 228,000.00 -132.75M -54.88M
divided by
Revenue 1.06B 1.26B 1.40B 1.53B 2.08B 2.49B 2.47B 2.34B 2.13B 1.96B
Net Profit Margin 2.02% 1.70% 2.61% 2.55% 2.32% 3.26% 1.03% 0.01% -6.23% -2.80%

Inconsistent Gross Profit Margins over the past 10 years

HGG has good gross profit margins, however inconsistency of these margins is a cause for concern. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$36.80 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in March
2007200820092010201120122013201420152016
Gross Profit 328.73M 388.93M 435.11M 466.94M 629.76M 2.49B 717.59M 664.54M 605.84M 553.78M
divided by
Revenue 1.06B 1.26B 1.40B 1.53B 2.08B 2.49B 2.47B 2.34B 2.13B 1.96B
Gross Margin 31.03% 30.95% 31.15% 30.43% 30.31% 100.00% 29.00% 28.42% 28.45% 28.25%

High Capital Intensity over the past 10 years

HGG spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

1,342.55% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in March
2007200820092010201120122013201420152016
Capital Expenditure 19.49M 42.18M 33.72M 62.16M 59.94M 83.05M 54.02M 22.26M 22.52M 12.83M
divided by
Net Income 21.36M 21.41M 36.50M 39.20M 48.21M 81.37M 25.37M 228,000.00 -132.75M -54.88M
Capital Expenditure Ratio 91.26% 197.02% 92.38% 158.58% 124.33% 102.07% 212.94% 9,761.84% -16.97% -23.38%

No Dividend History over the past 10 years

HGG has never distributed dividends or has recently suspended their dividend distribution.
Figures in USD. Fiscal year ends in March
2007200820092010201120122013201420152016
Dividend Paid - - - - - - - - - -
divided by
Shares Outstanding 29.40M 32.19M 33.06M 37.99M 40.37M 38.08M 34.50M 30.68M 28.13M 27.70M
Dividend Paid Per Share - - - - - - - - - -
Price at Year End 13.86 7.67 22.30 21.56 14.45 6.98 14.25 7.62 3.84 1.43
Dividend Yield - - - - - - - - - -

History of Stock Buybacks over the past 10 years

HGG has some history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in March
2007200820092010201120122013201420152016
Shares Outstanding 29.40M 32.19M 33.06M 37.99M 40.37M 38.08M 34.50M 30.68M 28.13M 27.70M
Stock Bought Back - -8.66% -2.64% -12.97% -5.89% 6.01% 10.39% 12.43% 9.08% 1.55%
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