Central Garden Pet (CENT) AI Stock Analysis

• Market Cap: $1.87B
• Dividend Yield: N/A
• Average Volume (3M): 82.01K
• Price to Earnings (P/E): 14.7
• Beta (1Y): 0.42
• Revenue Growth: -4.90%
• EPS Growth: 0.29%
• Country: US
• Employees: 6,000
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Packaged Foods
• EPS (TTM): 1.56
• Shares Outstanding: 9,650,221
• 10 Day Avg. Volume: 113,763
• 30 Day Avg. Volume: 82,007
• PEG Ratio: -0.74
• Price to Book (P/B): 1.55
• Price to Sales (P/S): 0.75
• P/FCF Ratio: 6.85
• Enterprise Value/Market Cap: 1.57
• Enterprise Value/Revenue: 0.94
• Enterprise Value/Gross Profit: 3.02
• Enterprise Value/Ebitda: 9.05
• 1Y Price Target: $42.50
• Price Target Upside: 32.32% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 68 Neutral
• Price Target: $40.00 ▲(24.53% Upside)

Central Garden Pet's overall stock score reflects strong profitability and operational efficiency, as highlighted in the earnings call. However, declining revenue and mixed technical indicators present challenges. The reasonable valuation supports the stock's attractiveness, but growth challenges and external pressures like tariffs need to be addressed.

Positive Factors

Operational Efficiency

The company's focus on operational efficiency, as evidenced by margin expansion, indicates strong cost management and profitability, which are crucial for long-term financial health.

E-commerce and Innovation

Growth in e-commerce and product innovation positions the company well to capture market trends and consumer preferences, supporting future revenue growth.

Financial Health

A strong balance sheet with low leverage and available credit provides financial flexibility, enabling strategic investments and resilience against economic fluctuations.

Negative Factors

Declining Revenue

Declining revenue indicates potential challenges in market demand or competitive pressures, which could impact long-term growth if not addressed.

Impact of Tariffs

Tariff impacts can increase costs and reduce margins, posing a risk to profitability and competitiveness in the affected segments over the long term.

Negative Free Cash Flow Growth

Negative free cash flow growth indicates challenges in cash generation, which could limit the company's ability to invest in growth opportunities and manage debt.

Central Garden Pet Business Overview & Revenue Model

Company Description

Central Garden & Pet Company produces and distributes various products for the lawn and garden, and pet supplies markets in the United States. It operates through two segments, Pet and Garden. The Pet segment provides dog and cat supplies, such as dog treats and chews, toys, pet beds and grooming products, waste management and training pads, and pet containment; supplies for aquatics, small animals, reptiles, and pet birds, including toys, cages and habitats, bedding, and food and supplements; animal and household health and insect control products; live fish and products for fish, reptiles, and other aquarium-based pets, such as aquariums, furniture and lighting fixtures, pumps, filters, water conditioners, food, and supplements; and products for horses and livestock, as well as outdoor cushions and pillows. This segment sells its products under the Aqueon, Cadet, Comfort Zone, Farnam, Four Paws, Kaytee, K&H Pet Products, Nylabone, and Zilla brands. The Garden segment offers lawn and garden supplies products that include grass seed; wild bird feed, bird feeders, bird houses, and other birding accessories; fertilizers; decorative outdoor lifestyle products; live plants; and weed and grass, as well as other herbicides, insecticide, and pesticide products. This segment sells its lawn and garden supplies products under the AMDRO, Ferry-Morse, Pennington, and Sevin brands, as well as under Bell Nursery, Lilly Miller, and Over-N-Out other brand names. Central Garden & Pet Company was founded in 1955 and is based in Walnut Creek, California.

How the Company Makes Money

Central Garden & Pet generates revenue primarily through the sale of its diverse product offerings in both the Garden and Pet segments. The company sells its products through various channels, including retail stores, e-commerce platforms, and direct sales to consumers. Key revenue streams include sales of pet food and treats, lawn care products, and garden supplies. Additionally, Central Garden & Pet benefits from strategic partnerships with major retailers, which help to expand its distribution network and increase market penetration. The company's focus on innovation and brand development, along with its ability to adapt to market trends, further contributes to its overall earnings.

Central Garden Pet Financial Statement Overview

Summary

Central Garden Pet demonstrates strong profitability and operational efficiency, with improved margins and return on equity. However, challenges include declining revenue and negative free cash flow growth. The balance sheet remains stable with moderate leverage, but careful management is required to mitigate potential risks.

Income Statement

Central Garden Pet shows a stable gross profit margin of around 31% in the TTM, indicating efficient cost management. However, the company faces challenges with a negative revenue growth rate of -1.12% in the TTM, reflecting declining sales. The net profit margin has improved to 4.44% in the TTM, suggesting better profitability. EBIT and EBITDA margins have also improved, indicating operational efficiency. Overall, the income statement reflects a mixed performance with strong profitability but declining revenue.

Balance Sheet

The company's debt-to-equity ratio of 0.90 in the TTM indicates a moderate level of leverage, which is manageable. Return on equity has improved to 8.93% in the TTM, showing effective use of equity to generate profits. The equity ratio of 44.16% suggests a solid equity base relative to total assets. While the balance sheet shows stability, the moderate leverage poses a potential risk if not managed carefully.

Cash Flow

Central Garden Pet's free cash flow growth rate is negative at -6.26% in the TTM, indicating challenges in generating cash. The operating cash flow to net income ratio of 2.55 suggests strong cash generation relative to net income. The free cash flow to net income ratio of 0.88 indicates that a significant portion of net income is converted into free cash flow. Despite the negative growth in free cash flow, the company maintains a healthy cash conversion, reflecting efficient cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.12B	3.20B	3.31B	3.34B	3.30B	2.70B
Gross Profit	969.74M	943.74M	946.84M	992.30M	970.90M	796.56M
EBITDA	323.26M	290.76M	307.17M	340.98M	329.22M	253.34M
Net Income	138.49M	107.98M	125.64M	152.15M	151.75M	120.68M
Balance Sheet
Total Assets	3.60B	3.55B	3.38B	3.28B	3.12B	2.34B
Cash, Cash Equivalents and Short-Term Investments	713.05M	753.55M	488.73M	177.44M	426.42M	652.71M
Total Debt	1.44B	1.42B	1.37B	1.38B	1.36B	814.06M
Total Liabilities	2.07B	2.00B	1.93B	1.95B	1.89B	1.26B
Stockholders Equity	1.59B	1.56B	1.45B	1.33B	1.22B	1.08B
Cash Flow
Free Cash Flow	312.25M	351.76M	327.67M	-149.24M	170.51M	221.22M
Operating Cash Flow	352.87M	394.89M	381.63M	-34.03M	250.84M	264.27M
Investing Cash Flow	-44.65M	-105.19M	-34.58M	-142.98M	-899.36M	-48.11M
Financing Cash Flow	-165.71M	-25.44M	-37.55M	-66.81M	420.48M	-60.56M

Central Garden Pet Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 32.12
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CENT, the sentiment is Negative. The current price of 32.12 is below the 20-day moving average (MA) of 34.83, below the 50-day MA of 36.19, and below the 200-day MA of 36.47, indicating a bearish trend. The MACD of -1.12 indicates Positive momentum. The RSI at 25.43 is Positive, neither overbought nor oversold. The STOCH value of 10.40 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CENT.

Central Garden Pet Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SMPL	71 Outperform	$2.45B	17.26	7.89%	―	14.22%	-1.81%
CENT	68 Neutral	$1.87B	14.69	8.70%	―	-4.90%	0.29%
JJSF	68 Neutral	$1.88B	22.55	8.65%	3.24%	0.50%	-4.46%
FRPT	58 Neutral	$2.60B	80.89	3.14%	―	19.30%	33.65%
HLF	56 Neutral	$897.02M	2.72	-49.21%	―	-2.25%	288.79%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%