Central Garden Pet (CENT) AI Stock Analysis

• Market Cap: $2.06B
• Dividend Yield: N/A
• Average Volume (3M): 69.94K
• Price to Earnings (P/E): 16.3
• Beta (1Y): 0.44
• Revenue Growth: -4.90%
• EPS Growth: 0.29%
• Country: US
• Employees: 6,000
• Sector: Consumer Defensive
• Sector Strength: 59
• Industry: Packaged Foods
• EPS (TTM): 1.56
• Shares Outstanding: 9,650,221
• 10 Day Avg. Volume: 75,657
• 30 Day Avg. Volume: 69,936
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.42
• Enterprise Value/Revenue: 0.94
• Enterprise Value/Gross Profit: 3.02
• Enterprise Value/Ebitda: 9.05
• 1Y Price Target: $42.50
• Price Target Upside: 20.81% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 67 Neutral
• Price Target: $40.00 ▲(13.70% Upside)

Central Garden Pet's overall stock score reflects strong profitability and operational efficiency, as well as strategic initiatives highlighted in the earnings call. However, challenges such as declining revenue, negative free cash flow growth, and tariff impacts weigh on the score. The technical analysis suggests a lack of strong momentum, and the valuation indicates reasonable pricing.

Positive Factors

Guidance

The company raised guidance on Q3 tracking better in July, forecasting adjusted EPS of $2.60 with margin expansion driven by its Cost and Simplicity initiatives and a favorable product mix.

Profitability

Profitability was well ahead of Street expectations across the board, with adjusted EBITDA coming in ~14% ahead of expectations, while adjusted EPS beat by ~9%.

Stock Buyback

CENT repurchased $55m of stock in Q3, with an additional $46m authorized for future buybacks, viewing this as a good way to return money to shareholders.

Negative Factors

Consumer Demand

The revised outlook still includes uncertainty around consumer demand.

Inflationary Pressures

Central Garden & Pet expects elevated inflationary pressures in the second half, particularly in its Pet segment.

Sales Performance

Central Garden & Pet reported mixed Q2 results, with sales approximately 5% below consensus.

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 financial health with robust cash flow and stable profitability margins. While revenue has slightly declined, the company maintains operational efficiency and a solid equity position. Moderate leverage is managed well, but careful attention to debt levels is advisable. Overall, the financials reflect a stable company capable of navigating industry challenges with a solid foundation for growth.

Income Statement

The income statement shows a stable gross profit margin of approximately 30% over the periods. However, there is a slight decline in total revenue from $3.33 billion in 2022 to $3.16 billion TTM, indicating a revenue contraction of about 5.6%. Net profit margins are relatively stable but slightly low, around 3.9% TTM. EBITDA margin is strong at nearly 10%, suggesting operational efficiency. Despite the slight revenue drop, profitability remains stable.

Balance Sheet

Central Garden Pet's balance sheet reflects a solid equity position with a debt-to-equity ratio of approximately 0.92 TTM, indicating moderate leverage. The equity ratio stands at around 43%, showing a stable equity base. ROE decreased slightly to about 8% TTM, suggesting moderate returns on equity, though slightly less than previous years. The company maintains a healthy asset base, but the slight increase in debt could be a potential risk if not managed.

Cash Flow

The cash flow statement highlights strong free cash flow generation, with a TTM free cash flow of $333 million, up from $327 million the previous year. This reflects a stable free cash flow growth rate. Operating cash flow to net income ratio is robust at about 3.0, demonstrating excellent cash generation relative to net income. The company effectively manages capital expenditures while maintaining positive free cash flow, which bodes well for future investments and liquidity.

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	2.01B	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: 35.18
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 35.18 is below the 20-day moving average (MA) of 37.43, below the 50-day MA of 37.09, and below the 200-day MA of 36.92, indicating a bearish trend. The MACD of -0.75 indicates Positive momentum. The RSI at 40.44 is Neutral, neither overbought nor oversold. The STOCH value of 37.30 is Neutral, 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
JBSS	78 Outperform	$743.74M	13.38	16.58%	2.39%	7.40%	-14.93%
SENEA	72 Outperform	$732.06M	17.17	7.04%	―	7.30%	-13.73%
CENT	67 Neutral	$2.06B	16.29	8.70%	―	-4.90%	0.29%
HLF	63 Neutral	$988.78M	2.96	-31.74%	―	-2.25%	288.79%
Sector *	63 Neutral	$20.95B	14.50	-3.82%	3.12%	2.72%	-11.24%
JJSF	61 Neutral	$2.22B	26.63	8.79%	2.78%	0.50%	-4.46%
STKL	59 Neutral	$737.48M	―	-1.34%	―	10.90%	96.02%

Central Garden Pet Corporate Events

Central Garden Pet Completes 2025 Shareholders Meeting

On February 12, 2025, Central Garden Pet held its 2025 Annual Meeting of Shareholders where shareholders voted on key proposals. The election of ten directors to serve until the 2026 Annual Meeting was completed, with all nominees successfully elected. Additionally, shareholders ratified Deloitte & Touche LLP as the company’s independent registered public accounting firm for the fiscal year ending on September 27, 2025. The Board withdrew a proposal concerning an amendment to the company’s Certificate of Incorporation prior to the meeting. Shareholder voting rights were exercised according to share class entitlements, and the proposals reflect ongoing governance and fiscal oversight commitments.