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GROCERY OUTLET HOLDING CORP (GO) Stock Fundamental Analysis

NASDAQ:GO - Nasdaq - US39874R1014 - Common Stock - Currency: USD

16.995  -0.08 (-0.5%)

Fundamental Rating

3

We assign a fundamental rating of 3 out of 10 to GO. GO was compared to 41 industry peers in the Consumer Staples Distribution & Retail industry. There are concerns on the financial health of GO while its profitability can be described as average. GO is valied quite expensively at the moment, while it does show a decent growth rate.


Dividend Valuation Growth Profitability Health

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4

1. Profitability

1.1 Basic Checks

GO had positive earnings in the past year.
GO had a positive operating cash flow in the past year.
In the past 5 years GO has always been profitable.
GO had a positive operating cash flow in each of the past 5 years.
GO Yearly Net Income VS EBIT VS OCF VS FCFGO Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 100M 200M 300M

1.2 Ratios

With a Return On Assets value of 1.63%, GO is not doing good in the industry: 60.00% of the companies in the same industry are doing better.
GO has a worse Return On Equity (4.18%) than 60.00% of its industry peers.
The Return On Invested Capital of GO (2.50%) is worse than 65.00% of its industry peers.
GO had an Average Return On Invested Capital over the past 3 years of 3.34%. This is significantly below the industry average of 8.41%.
Industry RankSector Rank
ROA 1.63%
ROE 4.18%
ROIC 2.5%
ROA(3y)2.45%
ROA(5y)2.47%
ROE(3y)6.18%
ROE(5y)6.44%
ROIC(3y)3.34%
ROIC(5y)3.34%
GO Yearly ROA, ROE, ROICGO Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2 4 6 8 10

1.3 Margins

GO has a Profit Margin (1.20%) which is in line with its industry peers.
GO's Profit Margin has improved in the last couple of years.
GO has a Operating Margin of 2.01%. This is comparable to the rest of the industry: GO outperforms 47.50% of its industry peers.
In the last couple of years the Operating Margin of GO has declined.
The Gross Margin of GO (30.42%) is better than 77.50% of its industry peers.
GO's Gross Margin has been stable in the last couple of years.
Industry RankSector Rank
OM 2.01%
PM (TTM) 1.2%
GM 30.42%
OM growth 3Y-2.57%
OM growth 5Y-2.55%
PM growth 3Y-16.23%
PM growth 5Y23.55%
GM growth 3Y0.25%
GM growth 5Y0.57%
GO Yearly Profit, Operating, Gross MarginsGO Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 10 20 30

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3

2. Health

2.1 Basic Checks

GO has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
GO has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, GO has more shares outstanding
GO has a better debt/assets ratio than last year.
GO Yearly Shares OutstandingGO Yearly Shares OutstandingYearly Shares Outstanding 2017 2018 2019 2020 2021 2022 2023 20M 40M 60M 80M
GO Yearly Total Debt VS Total AssetsGO Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2017 2018 2019 2020 2021 2022 2023 500M 1B 1.5B 2B 2.5B

2.2 Solvency

GO has an Altman-Z score of 2.20. This is not the best score and indicates that GO is in the grey zone with still only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.20, GO is doing worse than 67.50% of the companies in the same industry.
GO has a Debt/Equity ratio of 0.34. This is a healthy value indicating a solid balance between debt and equity.
GO has a Debt to Equity ratio (0.34) which is in line with its industry peers.
Industry RankSector Rank
Debt/Equity 0.34
Debt/FCF N/A
Altman-Z 2.2
ROIC/WACC0.29
WACC8.53%
GO Yearly LT Debt VS Equity VS FCFGO Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 200M 400M 600M 800M 1B

2.3 Liquidity

A Current Ratio of 1.46 indicates that GO should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.46, GO is in the better half of the industry, outperforming 72.50% of the companies in the same industry.
GO has a Quick Ratio of 1.46. This is a bad value and indicates that GO is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of GO (0.33) is worse than 70.00% of its industry peers.
Industry RankSector Rank
Current Ratio 1.46
Quick Ratio 0.33
GO Yearly Current Assets VS Current LiabilitesGO Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2017 2018 2019 2020 2021 2022 2023 100M 200M 300M 400M 500M

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5

3. Growth

3.1 Past

GO shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -30.43%.
The Earnings Per Share has been growing by 32.90% on average over the past years. This is a very strong growth
Looking at the last year, GO shows a quite strong growth in Revenue. The Revenue has grown by 9.03% in the last year.
Measured over the past years, GO shows a quite strong growth in Revenue. The Revenue has been growing by 11.65% on average per year.
EPS 1Y (TTM)-30.43%
EPS 3Y-10.77%
EPS 5Y32.9%
EPS Q2Q%-9.68%
Revenue 1Y (TTM)9.03%
Revenue growth 3Y8.19%
Revenue growth 5Y11.65%
Sales Q2Q%10.39%

3.2 Future

The Earnings Per Share is expected to grow by 7.28% on average over the next years.
GO is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.67% yearly.
EPS Next Y-25.04%
EPS Next 2Y-5.18%
EPS Next 3Y0.77%
EPS Next 5Y7.28%
Revenue Next Year10.13%
Revenue Next 2Y9.33%
Revenue Next 3Y9.26%
Revenue Next 5Y9.67%

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
GO Yearly Revenue VS EstimatesGO Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2B 4B 6B
GO Yearly EPS VS EstimatesGO Yearly EPS VS EstimatesYearly EPS VS Estimates 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 0.5 1 1.5

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2

4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 21.24 indicates a rather expensive valuation of GO.
GO's Price/Earnings ratio is in line with the industry average.
GO is valuated rather cheaply when we compare the Price/Earnings ratio to 28.47, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 17.50, GO is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of GO indicates a somewhat cheap valuation: GO is cheaper than 67.50% of the companies listed in the same industry.
GO is valuated cheaply when we compare the Price/Forward Earnings ratio to 92.74, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 21.24
Fwd PE 17.5
GO Price Earnings VS Forward Price EarningsGO Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60 80

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of GO is on the same level as its industry peers.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 10.66
GO Per share dataGO EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 10 20 30 40

4.3 Compensation for Growth

PEG (NY)N/A
PEG (5Y)0.65
EPS Next 2Y-5.18%
EPS Next 3Y0.77%

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0

5. Dividend

5.1 Amount

No dividends for GO!.
Industry RankSector Rank
Dividend Yield N/A

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GROCERY OUTLET HOLDING CORP

NASDAQ:GO (2/5/2025, 2:57:06 PM)

16.995

-0.08 (-0.5%)

Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupConsumer Staples Distribution & Retail
GICS IndustryConsumer Staples Distribution & Retail
Earnings (Last)11-05 2024-11-05/amc
Earnings (Next)N/A N/A
Inst Owners111.74%
Inst Owner Change-0.22%
Ins Owners3.71%
Ins Owner Change8.47%
Market Cap1.65B
Analysts52.17
Price Target17.73 (4.32%)
Short Float %11.26%
Short Ratio6.06
Dividend
Industry RankSector Rank
Dividend Yield N/A
Yearly Dividend0
Dividend Growth(5Y)N/A
DP0.03%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)10.97%
Min EPS beat(2)0.43%
Max EPS beat(2)21.5%
EPS beat(4)3
Avg EPS beat(4)-5.65%
Min EPS beat(4)-52.56%
Max EPS beat(4)21.5%
EPS beat(8)7
Avg EPS beat(8)3.45%
EPS beat(12)10
Avg EPS beat(12)4.28%
EPS beat(16)12
Avg EPS beat(16)3.19%
Revenue beat(2)0
Avg Revenue beat(2)-1.42%
Min Revenue beat(2)-2.19%
Max Revenue beat(2)-0.66%
Revenue beat(4)0
Avg Revenue beat(4)-1.57%
Min Revenue beat(4)-2.19%
Max Revenue beat(4)-0.66%
Revenue beat(8)1
Avg Revenue beat(8)-1.34%
Revenue beat(12)3
Avg Revenue beat(12)-0.91%
Revenue beat(16)3
Avg Revenue beat(16)-1.4%
PT rev (1m)0%
PT rev (3m)-26.28%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-43.21%
EPS NY rev (1m)0%
EPS NY rev (3m)-13.73%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.06%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.09%
Valuation
Industry RankSector Rank
PE 21.24
Fwd PE 17.5
P/S 0.39
P/FCF N/A
P/OCF 16.56
P/B 1.35
P/tB 4.44
EV/EBITDA 10.66
EPS(TTM)0.8
EY4.71%
EPS(NY)0.97
Fwd EY5.71%
FCF(TTM)-0.86
FCFYN/A
OCF(TTM)1.03
OCFY6.04%
SpS43.89
BVpS12.62
TBVpS3.83
PEG (NY)N/A
PEG (5Y)0.65
Profitability
Industry RankSector Rank
ROA 1.63%
ROE 4.18%
ROCE 3.08%
ROIC 2.5%
ROICexc 2.56%
ROICexgc 3.74%
OM 2.01%
PM (TTM) 1.2%
GM 30.42%
FCFM N/A
ROA(3y)2.45%
ROA(5y)2.47%
ROE(3y)6.18%
ROE(5y)6.44%
ROIC(3y)3.34%
ROIC(5y)3.34%
ROICexc(3y)3.5%
ROICexc(5y)3.48%
ROICexgc(3y)5.31%
ROICexgc(5y)5.44%
ROCE(3y)4.11%
ROCE(5y)4.11%
ROICexcg growth 3Y-1.26%
ROICexcg growth 5Y-18.48%
ROICexc growth 3Y0.6%
ROICexc growth 5Y-5.75%
OM growth 3Y-2.57%
OM growth 5Y-2.55%
PM growth 3Y-16.23%
PM growth 5Y23.55%
GM growth 3Y0.25%
GM growth 5Y0.57%
F-Score6
Asset Turnover1.36
Health
Industry RankSector Rank
Debt/Equity 0.34
Debt/FCF N/A
Debt/EBITDA 2.22
Cap/Depr 177.33%
Cap/Sales 4.31%
Interest Coverage 250
Cash Conversion 52.64%
Profit Quality N/A
Current Ratio 1.46
Quick Ratio 0.33
Altman-Z 2.2
F-Score6
WACC8.53%
ROIC/WACC0.29
Cap/Depr(3y)177.43%
Cap/Depr(5y)188.33%
Cap/Sales(3y)3.97%
Cap/Sales(5y)3.94%
Profit Quality(3y)107.16%
Profit Quality(5y)121.08%
High Growth Momentum
Growth
EPS 1Y (TTM)-30.43%
EPS 3Y-10.77%
EPS 5Y32.9%
EPS Q2Q%-9.68%
EPS Next Y-25.04%
EPS Next 2Y-5.18%
EPS Next 3Y0.77%
EPS Next 5Y7.28%
Revenue 1Y (TTM)9.03%
Revenue growth 3Y8.19%
Revenue growth 5Y11.65%
Sales Q2Q%10.39%
Revenue Next Year10.13%
Revenue Next 2Y9.33%
Revenue Next 3Y9.26%
Revenue Next 5Y9.67%
EBIT growth 1Y-34.39%
EBIT growth 3Y5.41%
EBIT growth 5Y8.8%
EBIT Next Year68.37%
EBIT Next 3Y28.84%
EBIT Next 5Y21.25%
FCF growth 1Y-288.49%
FCF growth 3Y33.67%
FCF growth 5Y26.81%
OCF growth 1Y-39.09%
OCF growth 3Y18.75%
OCF growth 5Y23.46%