GROCERY OUTLET HOLDING CORP (GO)

US39874R1014 - Common Stock

28.66  -0.34 (-1.17%)

Fundamental Rating

5

We assign a fundamental rating of 5 out of 10 to GO. GO was compared to 41 industry peers in the Consumer Staples Distribution & Retail industry. Both the profitability and the financial health of GO get a neutral evaluation. Nothing too spectacular is happening here. While showing a medium growth rate, GO is valued expensive at the moment.



6

1. Profitability

1.1 Basic Checks

In the past year GO was profitable.
In the past year GO had a positive cash flow from operations.
In the past 5 years GO has always been profitable.
Each year in the past 5 years GO had a positive operating cash flow.

1.2 Ratios

The Return On Assets of GO (2.67%) is comparable to the rest of the industry.
GO has a Return On Equity (6.51%) which is comparable to the rest of the industry.
With a Return On Invested Capital value of 3.95%, GO perfoms like the industry average, outperforming 41.46% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for GO is significantly below the industry average of 9.87%.
The last Return On Invested Capital (3.95%) for GO is above the 3 year average (3.34%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA 2.67%
ROE 6.51%
ROIC 3.95%
ROA(3y)2.45%
ROA(5y)2.47%
ROE(3y)6.18%
ROE(5y)6.44%
ROIC(3y)3.34%
ROIC(5y)3.34%

1.3 Margins

GO has a better Profit Margin (2.00%) than 60.98% of its industry peers.
GO's Profit Margin has improved in the last couple of years.
GO's Operating Margin of 3.17% is fine compared to the rest of the industry. GO outperforms 63.41% of its industry peers.
In the last couple of years the Operating Margin of GO has declined.
With an excellent Gross Margin value of 31.28%, GO belongs to the best of the industry, outperforming 85.37% of the companies in the same industry.
In the last couple of years the Gross Margin of GO has remained more or less at the same level.
Industry RankSector Rank
OM 3.17%
PM (TTM) 2%
GM 31.28%
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%

5

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so GO is destroying value.
Compared to 1 year ago, GO has more shares outstanding
GO has more shares outstanding than it did 5 years ago.
The debt/assets ratio for GO has been reduced compared to a year ago.

2.2 Solvency

An Altman-Z score of 2.68 indicates that GO is not a great score, but indicates only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.68, GO is in line with its industry, outperforming 43.90% of the companies in the same industry.
GO has a debt to FCF ratio of 2.18. This is a good value and a sign of high solvency as GO would need 2.18 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.18, GO belongs to the top of the industry, outperforming 82.93% of the companies in the same industry.
GO has a Debt/Equity ratio of 0.24. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of GO (0.24) is better than 78.05% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.24
Debt/FCF 2.18
Altman-Z 2.68
ROIC/WACC0.46
WACC8.51%

2.3 Liquidity

A Current Ratio of 1.35 indicates that GO should not have too much problems paying its short term obligations.
With a decent Current ratio value of 1.35, GO is doing good in the industry, outperforming 63.41% of the companies in the same industry.
A Quick Ratio of 0.43 indicates that GO may have some problems paying its short term obligations.
With a Quick ratio value of 0.43, GO is not doing good in the industry: 65.85% of the companies in the same industry are doing better.
Industry RankSector Rank
Current Ratio 1.35
Quick Ratio 0.43

6

3. Growth

3.1 Past

GO shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 4.85%.
Measured over the past years, GO shows a very strong growth in Earnings Per Share. The EPS has been growing by 32.90% on average per year.
GO shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.94%.
GO shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 11.65% yearly.
EPS 1Y (TTM)4.85%
EPS 3Y-10.77%
EPS 5Y32.9%
EPS growth Q2Q-28%
Revenue 1Y (TTM)10.94%
Revenue growth 3Y8.19%
Revenue growth 5Y11.65%
Revenue growth Q2Q6.34%

3.2 Future

Based on estimates for the next years, GO will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.29% on average per year.
GO is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.46% yearly.
EPS Next Y11.79%
EPS Next 2Y10.45%
EPS Next 3Y9.59%
EPS Next 5Y11.29%
Revenue Next Year9.54%
Revenue Next 2Y9.36%
Revenue Next 3Y9.47%
Revenue Next 5Y9.46%

3.3 Evolution

The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.

3

4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 26.54 indicates a quite expensive valuation of GO.
The rest of the industry has a similar Price/Earnings ratio as GO.
GO is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 26.42, which is the current average of the S&P500 Index.
GO is valuated rather expensively with a Price/Forward Earnings ratio of 23.74.
GO's Price/Forward Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.74, GO is valued at the same level.
Industry RankSector Rank
PE 26.54
Fwd PE 23.74

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, GO is valued a bit more expensive than 63.41% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, GO is valued a bit cheaper than the industry average as 70.73% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF 21.15
EV/EBITDA 14.29

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of GO may justify a higher PE ratio.
PEG (NY)2.25
PEG (5Y)0.81
EPS Next 2Y10.45%
EPS Next 3Y9.59%

0

5. Dividend

5.1 Amount

GO does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A

GROCERY OUTLET HOLDING CORP

NASDAQ:GO (3/28/2024, 11:35:53 AM)

28.66

-0.34 (-1.17%)

Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupConsumer Staples Distribution & Retail
GICS IndustryConsumer Staples Distribution & Retail
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap2.84B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield N/A
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
Industry RankSector Rank
PE 26.54
Fwd PE 23.74
P/S
P/FCF
P/OCF
P/B
P/tB
EV/EBITDA
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)2.25
PEG (5Y)0.81
Profitability
Industry RankSector Rank
ROA 2.67%
ROE 6.51%
ROCE
ROIC
ROICexc
ROICexgc
OM 3.17%
PM (TTM) 2%
GM 31.28%
FCFM
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover1.34
Health
Industry RankSector Rank
Debt/Equity 0.24
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 1.35
Quick Ratio 0.43
Altman-Z
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)4.85%
EPS 3Y-10.77%
EPS 5Y
EPS growth Q2Q
EPS Next Y11.79%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)10.94%
Revenue growth 3Y8.19%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y