Copyright forbes
POLAND - 2025/01/02: In this photo illustration, the Clorox company logo is seen displayed on a smartphone screen. (Photo Illustration by Piotr Swat/SOPA Images/LightRocket via Getty Images) SOPA Images/LightRocket via Getty Images Clorox (CLX) has seen a meaningful decline in its share price over the past year, pressured by post-pandemic normalization, rising input costs, and the aftereffects of the cyberattack that disrupted operations. Once viewed as a defensive growth name, the stock’s premium valuation has faded as investor sentiment cooled. Yet this pullback has reset expectations — and in doing so, transformed Clorox into something it hasn’t been in years: a value stock with stable fundamentals and strong brands. Here is why we believe Clorox (CLX) stock merits attention as a value investment. It is currently trading almost 33% lower than its 1 year peak and also at a price-to-sales multiple that is beneath the average of the past 3 years. Nonetheless, it is experiencing growth, even if modest, and possesses solid margins alongside its low valuation. Revenue Growth: 0.2% over the last twelve months and 0.04% over the last 3 year average. While growth is limited, this represents a margin and value play. Strong Margin: Approximately 12.7% average operating margin over the past 3 years. No Major Margin Shock: Clorox has successfully avoided any significant margin collapse in the last 12 months. Modest Valuation: Despite promising fundamentals, CLX stock has a price-to-earnings multiple of 16.6. For some background, Clorox offers consumer and professional products worldwide in health, household, lifestyle, and international segments, primarily distributed through mass retailers, grocery stores, warehouse clubs, dollar shops, and hardware centers. No matter where a stock goes, your portfolio should remain on course. See how the High Quality Portfolio can assist you in maintaining that. Financial metrics MORE FOR YOU Stocks Like These Can Outperform. Here Is Data Below are statistics for stocks with the same selection strategy applied between 12/31/2016 and 6/30/2025. Average 6-month and 12-month forward returns of 12.7% and 25.8% respectively Win rate (percentage of picks returning positive) of > 70% for both 6-month and 12-month periods Not overly dependent on market downturns. During non-crash periods as well, this strategy has delivered a 12-month average return of nearly 20% with a 67% win rate. But Consider The Risk That said, CLX is not protected from substantial declines. It fell by over 54% during the Dot-Com crash and nearly 44% amid the inflation shock in 2022. The Global Financial Crisis resulted in a 29% drop, while the 2018 correction and Covid pullback experienced reductions of about 23% and 18%, respectively. Even strong companies like CLX can suffer setbacks when the market shifts. Risks persist, regardless of the fundamentals. The Trefis High Quality (HQ) Portfolio, containing a selection of 30 stocks, has a history of comfortably outperforming its benchmark that encompasses all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. What accounts for this? As a group, HQ Portfolio stocks have yielded greater returns with lower risks compared to the benchmark index; they present less of a roller-coaster experience, as demonstrated in HQ Portfolio performance metrics. Editorial StandardsReprints & Permissions
