NasdaqGS:GO

Stock Analysis Report

Executive Summary

Grocery Outlet Holding Corp. owns and operates a chain of grocery stores in the United States.

Rewards

Earnings are forecast to grow 54.19% per year

Revenue grew by 11.4% over the past year

Risk Analysis

Interest payments are not well covered by earnings

Large one-off items impacting financial results

Profit margins (0.04%) are lower than last year (0.8%)



Snowflake Analysis

Reasonable growth potential with imperfect balance sheet.


Similar Companies

Share Price & News

How has Grocery Outlet Holding's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: GO has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.8%

GO

2.3%

US Consumer Retailing

0.06%

US Market


1 Year Return

n/a

GO

17.0%

US Consumer Retailing

19.4%

US Market

Return vs Industry: Insufficient data to determine how GO performed against the US Consumer Retailing industry.

Return vs Market: Insufficient data to determine how GO performed against the US Market.


Shareholder returns

GOIndustryMarket
7 Day1.8%2.3%0.06%
30 Day-6.8%2.6%1.1%
90 Day4.1%0.4%8.9%
1 Yearn/a19.3%17.0%21.9%19.4%
3 Yearn/a49.0%39.4%48.9%39.3%
5 Yearn/a49.6%34.0%71.9%53.1%

Price Volatility Vs. Market

How volatile is Grocery Outlet Holding's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Grocery Outlet Holding undervalued compared to its fair value and its price relative to the market?

2435.53x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: GO ($32.91) is trading above our estimate of fair value ($16.16)

Significantly Below Fair Value: GO is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: GO is poor value based on its PE Ratio (2496.2x) compared to the Consumer Retailing industry average (22.2x).

PE vs Market: GO is poor value based on its PE Ratio (2496.2x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: GO is poor value based on its PEG Ratio (46.1x)


Price to Book Ratio

PB vs Industry: GO is overvalued based on its PB Ratio (4x) compared to the US Consumer Retailing industry average (2.1x).


Next Steps

Future Growth

How is Grocery Outlet Holding forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

54.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: GO's forecast earnings growth (54.2% per year) is above the savings rate (1.7%).

Earnings vs Market: GO's earnings (54.2% per year) are forecast to grow faster than the US market (14.6% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: GO's revenue (10.6% per year) is forecast to grow faster than the US market (7.6% per year).

High Growth Revenue: GO's revenue (10.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: GO's Return on Equity is forecast to be low in 3 years time (10%).


Next Steps

Past Performance

How has Grocery Outlet Holding performed over the past 5 years?

-94.3%

Last years earnings growth


Earnings and Revenue History

Quality Earnings: GO has a large one-off loss of $11.5M impacting its September 28 2019 financial results.

Growing Profit Margin: GO's current net profit margins (0.04%) are lower than last year (0.8%).


Past Earnings Growth Analysis

Earnings Trend: Insufficient data to determine if GO's year-on-year earnings growth rate was positive over the past 5 years.

Accelerating Growth: GO's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: GO had negative earnings growth (-94.3%) over the past year, making it difficult to compare to the Consumer Retailing industry average (-6.1%).


Return on Equity

High ROE: GO's Return on Equity (0.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Grocery Outlet Holding's financial position?


Financial Position Analysis

Short Term Liabilities: GO's short term assets ($278.0M) exceed its short term liabilities ($206.2M).

Long Term Liabilities: GO's short term assets ($278.0M) do not cover its long term liabilities ($1.2B).


Debt to Equity History and Analysis

Debt Level: GO's debt to equity ratio (63.3%) is considered high.

Reducing Debt: Insufficient data to determine if GO's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: GO's debt is well covered by operating cash flow (27%).

Interest Coverage: GO's interest payments on its debt are not well covered by EBIT (1.2x coverage).


Balance Sheet

Inventory Level: GO has a high level of physical assets or inventory.

Debt Coverage by Assets: GO's debt is not covered by short term assets (assets are 0.6x debt).


Next Steps

Dividend

What is Grocery Outlet Holding's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage1.7%forecastin3Years0%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate GO's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate GO's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if GO's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if GO's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of GO's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.8yrs

Average management tenure


CEO

Eric Lindberg (48yo)

1.1yrs

Tenure

US$3,327,809

Compensation

Mr. Eric J. Lindberg Jr., has been Chief Executive Officer of Grocery Outlet Holding Corp since January 1, 2019 and its Director since January 2006. Previously, from January 2006 to December 2018, Mr. Lind ...


CEO Compensation Analysis

Compensation vs Market: Eric's total compensation ($USD3.33M) is below average for companies of similar size in the US market ($USD4.89M).

Compensation vs Earnings: Insufficient data to compare Eric's compensation with company performance.


Leadership Team

NamePositionTenureCompensationOwnership
Eric Lindberg
CEO & Director1.1yrsUS$3.33m3.46% $98.9m
S. Read
Executive Vice Chairman1.1yrsUS$3.16mno data
Robert Sheedy
President1.1yrsUS$1.53m0.011% $321.1k
Charles Bracher
CFO & Treasurer7.5yrsUS$1.51m0.050% $1.4m
Thomas McMahon
Executive Vice President Of Retail Store Operations11.2yrsUS$1.04m0.10% $2.9m
Pamela Burke
Chief Administrative Officer1.1yrsno datano data
Joseph Pelland
Vice President of Investor Relations0yrsno datano data
Layla Kasha
Vice President of Marketing2.6yrsno datano data
Karen Hague
Vice President of Human Resources3yrsno datano data
Jeff Oki
Senior Vice President of New Markets4.7yrsno datano data

2.8yrs

Average Tenure

48yo

Average Age

Experienced Management: GO's management team is considered experienced (2.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Eric Lindberg
CEO & Director1.1yrsUS$3.33m3.46% $98.9m
S. Read
Executive Vice Chairman1.1yrsUS$3.16mno data
Norman Matthews
Independent Director5.3yrsUS$213.02k0.10% $3.0m
Erik Ragatz
Independent Chairman of the Board5.3yrsno datano data
Thomas Herman
Independent Director16.1yrsUS$226.99k0.10% $2.9m
Jeffrey York
Independent Director9.3yrsUS$218.36k0.18% $5.1m
Sameer Narang
Independent Director5.3yrsno datano data
John Bachman
Independent Director0.3yrsUS$13.70kno data
Matthew Eisen
Independent Director0.9yrsno datano data
Kenneth Alterman
Independent Director9.1yrsUS$212.68k0.055% $1.6m

5.3yrs

Average Tenure

55yo

Average Age

Experienced Board: GO's board of directors are considered experienced (5.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: GO insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: GO only recently listed within the past 12 months, with total shares outstanding growing by 8.1% in the past year..


Top Shareholders

Company Information

Grocery Outlet Holding Corp.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Grocery Outlet Holding Corp.
  • Ticker: GO
  • Exchange: NasdaqGS
  • Founded: 1946
  • Industry: Food Retail
  • Sector: Consumer Retailing
  • Market Cap: US$2.854b
  • Shares outstanding: 88.89m
  • Website: https://www.groceryoutlet.com

Number of Employees


Location

  • Grocery Outlet Holding Corp.
  • 5650 Hollis Street
  • EmeryVille
  • California
  • 94608
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
GONasdaqGS (Nasdaq Global Select)YesVoting Common StockUSUSDJun 2019

Biography

Grocery Outlet Holding Corp. owns and operates a chain of grocery stores in the United States. The company offers products in various categories, such as grocery, dairy and deli, produce, refrigerated and frozen, floral, beer and wine, general merchandise, and health and beauty care, as well as fresh meat and seafood; and natural, organic, specialty, and healthy products. As of December 28, 2019, it had 347 stores, which included 342 independent operated stores and 5 company operated stores in California, Washington, Oregon, Pennsylvania, Idaho, and Nevada. The company was founded in 1946 and is headquartered in Emeryville, California. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/19 02:12
End of Day Share Price2020/02/18 00:00
Earnings2019/09/28
Annual Earnings2018/12/29


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.