HXL · Materials(plastic materials, synth resins & nonvulcan elastomers) · 10 years of annual accounts filed with the SEC · latest fiscal year ended 2025-12-31
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Hexcel Corp reported revenue of $1.9 billion in fiscal 2025, after shrinking 0.6% a year over the previous 9 years. Its operating margin narrowed from 18.0% in 2016 to 9.1%, and it earned 6.2% on its invested capital in the latest year. Of the $3.1 billion its operations generated over 10 years, 49.0% went to buybacks and 45.6% back into the business; the share count fell 15.1%. On the accounting screens, it passes 6 of 9 Piotroski tests, its Altman Z'' of 5.10 is in the safe zone and its Beneish M-score is below the -1.78 line; 3 of the six cross-checks between its statements fire.
Revenue, fiscal 20251.9B-0.6% a year over 9 years
Operating margin9.1%gross margin 23.0%
Return on invested capital6.2%5.8% on average over 5 years
Free cash flow after stock pay142.8M7.5% of revenue
Net debt ÷ EBITDA3.1×net debt 922.0M
Piotroski F-score6/9tests of improvement passed
Is it growing?
Revenue and the operating income it turns into. Growth that does not reach operating income is growth bought with margin.
RevenueOperating income
01B2B3B
2016Revenue 2.0BOperating income 360.1M
2017Revenue 2.0BOperating income 350.6M
2018Revenue 2.2BOperating income 371.2M
2019Revenue 2.4BOperating income 425.2M
2020Revenue 1.5BOperating income 14.1M
2021Revenue 1.3BOperating income 51.8M
2022Revenue 1.6BOperating income 175.2M
2023Revenue 1.8BOperating income 215.3M
2024Revenue 1.9BOperating income 186.1M
2025Revenue 1.9BOperating income 171.6M
2016201720182019202020212022202320242025
Compound growth a year
3 yrs
5 yrs
9 yrs
Revenue
+6.3%
+4.7%
-0.6%
Operating income
-0.7%
+64.8%
-7.9%
Net income
-4.7%
+28.1%
-8.8%
Earnings per share
-2.7%
+29.4%
-7.1%
Free cash flow per share
+19.9%
-5.0%
+10.8%
Dividend per share
+19.3%
+31.9%
+5.3%
Shares
-2.0%
-1.0%
-1.8%
Falling shares are buybacks: each remaining share owns more of the company.
Does it earn more than its capital costs?
Margins say how much of each sale is kept; return on invested capital says how much the business earns on the money it needs to operate. Growth only creates value when that return is above the cost of the capital.
Return on invested capitalCost of capital today · 7.6%
0%5%10%15%
2016Return on invested capital 13.6%
2017Return on invested capital 13.2%
2018Return on invested capital 13.2%
2019Return on invested capital 13.5%
2020Return on invested capital 1.9%
2021Return on invested capital 1.6%
2022Return on invested capital 6.1%
2023Return on invested capital 7.9%
2024Return on invested capital 7.1%
2025Return on invested capital 6.2%
2016201720182019202020212022202320242025
Economic profit
Economic profit
-200M-100M0100M200M
2016Economic profit 117.1M
2017Economic profit 129.6M
2018Economic profit 128.7M
2019Economic profit 149.0M
2020Economic profit -139.7M
2021Economic profit -137.3M
2022Economic profit -34.6M
2023Economic profit 8.2M
2024Economic profit -10.4M
2025Economic profit -31.2M
2016201720182019202020212022202320242025
(return on capital − cost of capital) × capital invested: the profit left after paying for the money used. Today's cost of capital is applied to every year, since a past one cannot be rebuilt honestly.
Return on equity
8.7%
Return on assets
4.0%
Asset turnover
0.70×
Research & development
3.0% of revenue
Overheads (SG&A)
8.9% of revenue
Is the profit cash, and where does the cash go?
Net income is an accounting opinion; free cash flow is what was left in the bank after investing. Stock-based pay does not leave the bank — shareholders pay it through dilution — so it is shown taken off as well.
Net incomeFree cash flowAfter stock-based pay
0100M200M300M400M
2016Net income 249.8MFree cash flow 73.5MAfter stock-based pay 57.4M
2017Net income 284.0MFree cash flow 150.6MAfter stock-based pay 133.0M
2018Net income 276.6MFree cash flow 237.3MAfter stock-based pay 221.1M
2019Net income 306.6MFree cash flow 287.0MAfter stock-based pay 268.7M
2020Net income 31.7MFree cash flow 213.7MAfter stock-based pay 198.3M
2021Net income 16.1MFree cash flow 123.8MAfter stock-based pay 104.8M
2022Net income 126.3MFree cash flow 96.8MAfter stock-based pay 76.8M
2023Net income 105.7MFree cash flow 148.9MAfter stock-based pay 128.0M
2024Net income 132.1MFree cash flow 202.9MAfter stock-based pay 180.7M
2025Net income 109.4MFree cash flow 157.2MAfter stock-based pay 142.8M
2016201720182019202020212022202320242025
Where 10 years of operating cash went, 2016–2025
3.1B generated by the business. Each band is its share of that total.
Reinvested in the business 46%1.4B
Acquisitions 0%8.6M
Dividends 11%328.3M
Share buybacks 49%1.5B
More than it generated: funded with cash or new debt -5%-168.5M
Over the same years it paid 180.1M in stock. The share count fell 15.1%. 1.3B of the buybacks went beyond offsetting that dilution.
Per share
Earnings per shareFree cash flow per shareDividend per share
$0$1$2$3$4
2016Earnings per share $2.65Free cash flow per share $0.78Dividend per share $0.42
2017Earnings per share $3.09Free cash flow per share $1.64Dividend per share $0.46
2018Earnings per share $3.11Free cash flow per share $2.67Dividend per share $0.54
2019Earnings per share $3.57Free cash flow per share $3.34Dividend per share $0.05
2020Earnings per share $0.38Free cash flow per share $2.54Dividend per share $0.17
2021Earnings per share $0.19Free cash flow per share $1.46Dividend per share $0.00
2022Earnings per share $1.49Free cash flow per share $1.14Dividend per share $0.40
2023Earnings per share $1.24Free cash flow per share $1.74Dividend per share $0.49
2024Earnings per share $1.59Free cash flow per share $2.44Dividend per share $0.59
2025Earnings per share $1.37Free cash flow per share $1.97Dividend per share $0.67
2016201720182019202020212022202320242025
Shares outstanding
Diluted shares
80M85M90M95M
2016Diluted shares 94.2M
2017Diluted shares 91.9M
2018Diluted shares 89.0M
2019Diluted shares 85.8M
2020Diluted shares 84.0M
2021Diluted shares 84.6M
2022Diluted shares 85.0M
2023Diluted shares 85.5M
2024Diluted shares 83.0M
2025Diluted shares 80.0M
2016201720182019202020212022202320242025
Debt and liquidity
Debt is not bad in itself; debt the business cannot service in a bad year is. Net debt is debt minus cash, and below zero the company holds more cash than it owes.
Net debt
00.25B0.50B0.75B1.00B
2016Net debt 653.5M
2017Net debt 749.8M
2018Net debt 924.1M
2019Net debt 995.7M
2020Net debt 823.1M
2021Net debt 695.6M
2022Net debt 611.5M
2023Net debt 472.5M
2024Net debt 575.3M
2025Net debt 922.0M
2016201720182019202020212022202320242025
Net debt ÷ EBITDA
3.1×
Interest coverage
5× operating income ÷ interest
Current ratio
2.26 current assets ÷ current liabilities
Cash conversion cycle
94 days collects in 48d, stock 82d, pays in 37d
Three classic screens of the accounts
Each asks a different question of the same statements — is it improving, does it look like a company heading for distress, do the accounts resemble ones that were manipulated. None is a verdict; each shows what moves it.
Piotroski F-score
Is the business improving? Nine yes-or-no tests, this year against last.
6of 9 tests passed
✓ProfitableReturn on assets above zeropassed
✓Cash from operationsOperating cash flow above zeropassed
✕Profitability improvedReturn on assets higher than a year beforefailed
✓Profit backed by cashOperating cash flow above net income (low accruals)passed
✕Less long-term debtLong-term debt as a share of assets fellfailed
✓More liquidCurrent ratio higher than a year beforepassed
✓No new sharesShare count did not growpassed
✕Better gross marginGross margin higher than a year beforefailed
✓Sells more per assetAsset turnover higher than a year beforepassed
Where it misleads: it measures change, not level. An excellent business that stood still for a year scores low; a poor one recovering from a disaster scores high.
Altman Z''-score
Does the balance sheet look like those of companies that went bankrupt?
5.10safe zone
1.12.6
Working capital ÷ assets 0.15 × 6.56+0.99
Retained earnings ÷ assets 0.85 × 3.26+2.78
Operating income ÷ assets 0.06 × 6.72+0.43
Equity ÷ liabilities 0.86 × 1.05+0.90
Where it misleads: buybacks. A company that returns so much cash that its equity turns small or negative sinks the last two ratios without being anywhere near bankruptcy. Banks and insurers do not fit the model at all.
Beneish M-score
Do the accounts resemble those of companies that manipulated their earnings?
-2.54below the -1.78 line
-1.78
Receivables vs sales 1.18+1.09
Gross margin slipping 1.08+0.57
Soft assets 1.05+0.42
Sales growth 1.00+0.89
Slower depreciation 1.02+0.12
Overheads vs sales 0.96-0.17
Profit not in cash -0.04-0.21
Leverage rising 1.26-0.41
Where it misleads: fast growth and acquisitions. Sales growth carries a heavy weight, so a company growing 50% a year scores like a suspect without having done anything. It is a screen from a 1999 study, not an accusation.
Where the statements disagree
Cross-checks between the income statement, the balance sheet and the cash flow for the latest year, each with the benign reading and the worrying one.
Receivables are growing 18% against revenue growing -0%.
Benign
A shift towards larger customers on longer terms, or sales concentrated at the end of the period.
Worrying
Sales are being made on looser credit, or revenue has been booked that may never be collected.
Capital spending (73M) is well below depreciation (122M).
Benign
Mature assets, or a business that has become less capital-intensive.
Worrying
Under-investing: today's profit is being held up by consuming tomorrow's capacity.
Net debt is 3.1 times EBITDA.
Benign
A stable sector with predictable cash flows and comfortable maturities.
Worrying
Little room if earnings fall; the maturity schedule is what to check.
What is it worth, under which assumptions?
A company is worth the cash it will generate, brought back to today. This model projects revenue with growth that fades over the years, applies a free cash flow margin, and discounts the result at the cost of capital. Every assumption says where it came from, and all of them can be changed.
Value per share, with these assumptions$34.01discounted at 7.6% a year · 62% of it from after year 10
Type a share price on the left to ask the reverse questions: what growth, what margin or what discount rate that price implies.
What the value implies, in the usual multiples
At this model's value
Price ÷ earnings
24.9×
Enterprise value ÷ EBITDA
12.4×
Enterprise value ÷ revenue
1.9×
Free cash flow yield
5.2%
From cash flows to a value per share
10 years of cash flow, today1.4B
Everything after, today2.3B
The whole business3.6B
Minus net debt-922.0M
What belongs to shareholders2.7B
Divided among 80.0M shares: <strong>$34.01</strong> each.
The projection next to its history
Reported free cash flow after stock pay, then the model's. A projection that looks nothing like the past needs a reason.
ReportedProjected
0100M200M300M
2016Reported 57.4M
2017Reported 133.0M
2018Reported 221.1M
2019Reported 268.7M
2020Reported 198.3M
2021Reported 104.8M
2022Reported 76.8M
2023Reported 128.0M
2024Reported 180.7M
2025Reported 142.8M
2026Projected 173.4M
2027Projected 180.8M
2028Projected 188.2M
2029Projected 195.4M
2030Projected 202.4M
2031Projected 209.3M
2032Projected 215.9M
2033Projected 222.3M
2034Projected 228.3M
2035Projected 234.0M
2016201820202022202420262028203020322034
Year by year
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
Revenue
2.0B
2.1B
2.1B
2.2B
2.3B
2.4B
2.5B
2.5B
2.6B
2.7B
Growth
4.5%
4.3%
4.1%
3.8%
3.6%
3.4%
3.2%
2.9%
2.7%
2.5%
Cash margin
8.8%
8.8%
8.8%
8.8%
8.8%
8.8%
8.8%
8.8%
8.8%
8.8%
Free cash flow
173.4M
180.8M
188.2M
195.4M
202.4M
209.3M
215.9M
222.3M
228.3M
234.0M
Worth today
161.2M
156.2M
151.1M
145.8M
140.4M
134.9M
129.4M
123.8M
118.2M
112.6M
If the least-known inputs move
Value per share as two inputs change at a time. Neighbouring cells that differ a lot are the conclusion: the value depends on numbers nobody knows to a point.
The discount rate and growth forever
discount ↓ · forever →
1.5%
2.0%
2.5%
3.0%
3.5%
6.6%
36
40
45
52
61
7.1%
31
35
39
44
51
7.6%
28
31
34
38
43
8.1%
25
27
30
33
37
8.6%
22
24
26
29
32
Year-one growth and the final margin
margin ↓ · growth →
0.5%
2.5%
4.5%
6.5%
8.5%
7.0%
21
23
27
30
33
7.9%
24
27
30
34
38
8.8%
27
30
34
38
42
9.6%
30
34
38
42
47
10.5%
33
37
41
46
51
All the inputs moving at once
4,998 valuations, each with growth, final margin, discount rate and growth forever drawn at random around the values on the left (spreads of 3.0%, 2.0%, 1.0% and 0.5%). Not a probability — the spreads are assumptions too — but an honest picture of how wide the answer is.
10th percentile$19.33
Median$33.97
90th percentile$58.14
$25.00$50.00$75.00
Half of the simulations land between <b>$25.63</b> and <b>$45.00</b>; one in ten below $19.33, one in ten above $58.14.
Does the long run make sense?
11.4×The terminal value prices the business in year 10 at 11.4 times that year's EBITDA.
Free growthIn year 10 free cash flow is at or above after-tax operating profit, yet the model grows 2.5% forever. Growth needs reinvestment; this assumes it comes for free, which flatters the terminal value.
62%of the value comes from after year 10. The more of it, the more the answer depends on the part nobody can see.
Every Form 4 filed in the last twelve months, read line by line: 6 filings by 5 people. Open-market purchases and sales are counted apart from awards, option exercises and shares withheld for taxes.
Bought on the open market—none in the period
Sold on the open market$2.3M4 sale(s) by 2 insider(s)
Under pre-arranged plans0%of the sales followed a 10b5-1 plan set months earlier
A Form 4 says what happened, when, how many shares and at what price. It does not say why: a sale can be diversification, a tax bill or a plan fixed months earlier, and an award is pay, not a purchase. Nothing here is a reason to buy or sell anything.
Which large funds report holding it
From the Form 13F of the 28 institutions followed on this site, as of the end of their last reported quarter. A 13F is filed up to 45 days later and shows only long positions in US-listed shares.
Accounts from the company's own SEC filings; lines some companies do not report are shown as a dash rather than estimated. The risk-free rate is the 10-year US Treasury yield. A DCF is a way of making assumptions explicit, not a forecast: it states what the company would be worth if the assumptions held. The scores are screens that point where to look, not verdicts. Nothing here is a recommendation to buy or sell.
