NYSE:BJ

Stock Analysis Report

BJ's Wholesale Club Holdings

Executive Summary

BJ's Wholesale Club Holdings, Inc. operates as a warehouse club on the East Coast of the United States.

Rewards

Trading at 49.5% below its fair value

Earnings are forecast to grow 6.83% per year

Earnings grew by 59.6% over the past year

Risk Analysis

Has a high level of debt

Shareholders have been diluted in the past year



Snowflake Analysis

Solid track record and good value.


Similar Companies

Share Price & News

How has BJ's Wholesale Club Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

1.1%

BJ

0.8%

US Consumer Retailing

1.3%

US Market


1 Year Return

5.3%

BJ

18.5%

US Consumer Retailing

19.4%

US Market

Return vs Industry: BJ underperformed the US Consumer Retailing industry which returned 18.5% over the past year.

Return vs Market: BJ underperformed the US Market which returned 19.4% over the past year.


Shareholder returns

BJIndustryMarket
7 Day1.1%0.8%1.3%
30 Day-10.7%-0.3%2.6%
90 Day-13.3%2.3%5.0%
1 Year5.3%5.3%20.8%18.5%22.0%19.4%
3 Yearn/a49.2%39.8%46.8%37.3%
5 Yearn/a52.0%35.6%66.3%48.0%

Price Volatility Vs. Market

How volatile is BJ's Wholesale Club Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is BJ's Wholesale Club Holdings undervalued compared to its fair value and its price relative to the market?

49.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: BJ ($23.8) is trading below our estimate of fair value ($47.12)

Significantly Below Fair Value: BJ is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: BJ is good value based on its PE Ratio (15.5x) compared to the Consumer Retailing industry average (22.7x).

PE vs Market: BJ is good value based on its PE Ratio (15.5x) compared to the US market (18.7x).


Price to Earnings Growth Ratio

PEG Ratio: BJ is poor value based on its PEG Ratio (2.3x)


Price to Book Ratio

PB vs Industry: BJ has negative assets, so we can't compare its PB Ratio to the US Consumer Retailing industry average.


Next Steps

Future Growth

How is BJ's Wholesale Club Holdings forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

6.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: BJ's forecast earnings growth (6.8% per year) is above the savings rate (1.7%).

Earnings vs Market: BJ's earnings (6.8% per year) are forecast to grow slower than the US market (14.3% per year).

High Growth Earnings: BJ's earnings are forecast to grow, but not significantly.

Revenue vs Market: BJ's revenue (2.5% per year) is forecast to grow slower than the US market (7.3% per year).

High Growth Revenue: BJ's revenue (2.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: BJ's Return on Equity is forecast to be very high in 3 years time (72.7%).


Next Steps

Past Performance

How has BJ's Wholesale Club Holdings performed over the past 5 years?

42.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: BJ has high quality earnings.

Growing Profit Margin: BJ's current net profit margins (1.6%) are higher than last year (1%).


Past Earnings Growth Analysis

Earnings Trend: BJ's earnings have grown significantly by 42.7% per year over the past 5 years.

Accelerating Growth: BJ's earnings growth over the past year (59.6%) exceeds its 5-year average (42.7% per year).

Earnings vs Industry: BJ earnings growth over the past year (59.6%) exceeded the Consumer Retailing industry -18.5%.


Return on Equity

High ROE: BJ's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is BJ's Wholesale Club Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: BJ has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: BJ has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.


Debt to Equity History and Analysis

Debt Level: BJ has negative shareholder equity, which is a more serious situation than a high debt level.

Reducing Debt: BJ's has negative shareholder equity, so we do not need to check if its debt has reduced over time.

Debt Coverage: BJ's debt is well covered by operating cash flow (21.7%).

Interest Coverage: BJ's interest payments on its debt are well covered by EBIT (4x coverage).


Balance Sheet

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

Debt Coverage by Assets: BJ has negative shareholder equity (liabilities exceed assets) therefore debt is not covered by short term assets.


Next Steps

Dividend

What is BJ's Wholesale Club Holdings'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 BJ's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate BJ'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 BJ's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if BJ'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 BJ's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of BJ's Wholesale Club Holdings's salary, the management and board of directors tenure and is there insider trading?

4.4yrs

Average management tenure


CEO

Chris Baldwin (56yo)

3.8yrs

Tenure

US$42,056,764

Compensation

Mr. Christopher J. Baldwin, also known as Chris, has been Chairman of the Board at BJ's Wholesale Club Inc. since May 17, 2018. Mr. Baldwin has been the Chief Executive Officer of BJ's Wholesale Club Inc.  ...


CEO Compensation Analysis

Compensation vs Market: Chris's total compensation ($USD42.06M) is above average for companies of similar size in the US market ($USD5.09M).

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


Management Age and Tenure

4.4yrs

Average Tenure

48yo

Average Age

Experienced Management: BJ's management team is considered experienced (4.4 years average tenure).


Board Age and Tenure

1.9yrs

Average Tenure

53yo

Average Age

Experienced Board: BJ's board of directors are not considered experienced ( 1.9 years average tenure), which suggests a new board.


Insider Trading

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


Recent Insider Transactions

SellUS$1,779,00008 Oct 19
Jonathan Seiffer
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares75,000
Max PriceUS$23.72
SellUS$76,708,57418 Sep 19
Leonard Green & Partners, L.P.
EntityCompany
Shares2,987,094
Max PriceUS$25.68
SellUS$1,100,23418 Sep 19
J. Galashan
EntityIndividual
Shares42,844
Max PriceUS$25.68
SellUS$214,637,50011 Jun 19
Leonard Green & Partners, L.P.
EntityCompany
Shares8,750,000
Max PriceUS$24.53
SellUS$214,637,50011 Jun 19
CVC Beacon LLC
EntityCompany
Shares8,750,000
Max PriceUS$24.53
SellUS$240,269,50015 Mar 19
Leonard Green & Partners, L.P.
EntityCompany
Shares9,775,000
Max PriceUS$24.58
SellUS$240,269,50014 Mar 19
CVC Beacon LLC
EntityCompany
Shares9,775,000
Max PriceUS$24.58

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 30.2%.


Management Team

  • Chris Baldwin (56yo)

    Chairman & CEO

    • Tenure: 3.8yrs
    • Compensation: US$42.06m
  • Bob Eddy (46yo)

    Executive VP and Chief Financial & Administrative Officer

    • Tenure: 8.9yrs
    • Compensation: US$8.23m
  • Kirk Saville (56yo)

    Senior Vice President of Corporate Communications

    • Tenure: 3.9yrs
  • Lee Delaney (47yo)

    President

    • Tenure: 0.3yrs
    • Compensation: US$6.90m
  • Scott Kessler (52yo)

    Executive VP & Chief Information Officer

    • Tenure: 2.9yrs
    • Compensation: US$4.47m
  • Graham Luce (49yo)

    Senior VP

    • Tenure: 4.9yrs
  • Jeff Desroches (42yo)

    Executive VP & Club Operations Officer

    • Tenure: 9.9yrs
  • Brian Poulliot (45yo)

    Executive VP & Chief Membership Officer

    • Tenure: 7.9yrs
    • Compensation: US$4.44m
  • Caroline Glynn (51yo)

    Senior Vice President of Internal Audit & Asset Protection

    • Tenure: 0yrs
  • William Werner (41yo)

    Senior Vice President of Strategic Planning & Investor Relations

    • Tenure: 0yrs

Board Members

  • Cameron Breitner (44yo)

    Independent Director

    • Tenure: 8.9yrs
  • Jon Seiffer (48yo)

    Independent Director

    • Tenure: 8.9yrs
  • Robert Steele (64yo)

    Independent Director

    • Tenure: 3.9yrs
    • Compensation: US$231.86k
  • Chris Baldwin (56yo)

    Chairman & CEO

    • Tenure: 3.8yrs
    • Compensation: US$42.06m
  • Ken Parent (61yo)

    Independent Director

    • Tenure: 8.9yrs
    • Compensation: US$226.03k
  • Michelle Gloeckler (53yo)

    Director

    • Tenure: 0.3yrs
  • Maile Clark

    Director

    • Tenure: 0.3yrs
  • Chris Peterson (53yo)

    Independent Director

    • Tenure: 1yrs
    • Compensation: US$81.65k
  • Judy Werthauser (53yo)

    Independent Director

    • Tenure: 1.1yrs
    • Compensation: US$112.52k

Company Information

BJ's Wholesale Club Holdings, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: BJ's Wholesale Club Holdings, Inc.
  • Ticker: BJ
  • Exchange: NYSE
  • Founded:
  • Industry: Hypermarkets and Super Centers
  • Sector: Consumer Retailing
  • Market Cap: US$3.267b
  • Shares outstanding: 137.27m
  • Website: https://www.bjs.com

Number of Employees


Location

  • BJ's Wholesale Club Holdings, Inc.
  • 25 Research Drive
  • Westborough
  • Massachusetts
  • 1581
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
BJNYSE (New York Stock Exchange)YesCommon StockUSUSDJun 2018
8BJDB (Deutsche Boerse AG)YesCommon StockDEEURJun 2018

Biography

BJ's Wholesale Club Holdings, Inc. operates as a warehouse club on the East Coast of the United States. It offers perishable, edible grocery, general merchandise, and non-edible grocery products. The compa ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/13 01:09
End of Day Share Price2019/12/12 00:00
Earnings2019/11/02
Annual Earnings2019/02/02


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.