Central Garden Pet (CENT) AI Stock Analysis

• Market Cap: $2.08B
• Dividend Yield: N/A
• Average Volume (3M): 100.05K
• Price to Earnings (P/E): 19.0
• Beta (1Y): 0.43
• Revenue Growth: -4.60%
• EPS Growth: -26.61%
• Country: US
• Employees: 6,000
• Sector: Consumer Defensive
• Sector Strength: 63
• Industry: Packaged Foods
• EPS (TTM): 1.04
• Shares Outstanding: 9,818,541
• 10 Day Avg. Volume: 74,043
• 30 Day Avg. Volume: 100,050
• PEG Ratio: 5.80
• Price to Book (P/B): 1.18
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -10.51
• Enterprise Value/Market Cap: 1.33
• Enterprise Value/Revenue: 0.22
• Enterprise Value/Gross Profit: 2.91
• Enterprise Value/Ebitda: 2.19
• 1Y Price Target: $38.00
• Price Target Upside: 7.04% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 74 Outperform
• Price Target: $40.00 ▲(12.68%Upside)

Central Garden & Pet shows strong financial health, underpinned by robust cash flow and operational efficiency. The recent earnings call was positive, reflecting strategic confidence despite macroeconomic hurdles. Valuation is reasonable, though the absence of a dividend yield is a minor drawback. Technical indicators suggest a neutral momentum, consolidating near moving averages.

Positive Factors

Earnings Performance

Central Garden & Pet reported robust Q1 results, with sales 4% above consensus and profitability well ahead across all metrics.

Guidance

The company maintained its full year guidance, indicating optimism about its performance for the rest of the year.

Share Buyback

The company repurchased $98 million in shares through the first half of the year and another $39 million in April, signaling management's belief that the stock is undervalued.

Negative Factors

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.

Weather Impact

Weather will remain a key driver of margin with nearly 70% of annual Garden sales done in Q2/Q3, which could impact volumes and fixed-cost absorption.

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 Company generates revenue primarily through the sale of its extensive portfolio of branded products in the lawn and garden and pet supplies sectors. The company distributes its products through a variety of channels including mass retailers, home improvement stores, garden centers, and pet superstores. Significant revenue streams include lawn and garden products such as fertilizers and insecticides, and pet supplies such as pet food and accessories. Central Garden & Pet also benefits from strategic acquisitions that expand its product offerings and enhance its market presence. The company's partnerships with major retail chains and its focus on innovation and brand development are key factors contributing to its 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.

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	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
3.16B	3.20B	3.31B	3.34B	3.30B	2.70B
	Gross Profit
954.79M	943.74M	946.84M	992.30M	970.90M	796.56M
	EBIT
204.84M	185.39M	210.65M	260.04M	254.50M	142.40M
	EBITDA
310.02M	290.76M	307.17M	340.98M	329.22M	253.34M
	Net Income Common Stockholders
123.21M	107.98M	125.64M	152.15M	151.75M	120.68M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
516.67M	753.55M	488.73M	177.44M	426.42M	652.71M
	Total Assets
3.57B	3.55B	3.38B	3.28B	3.12B	2.34B
	Total Debt
1.42B	1.42B	1.37B	1.38B	1.36B	814.06M
	Net Debt
908.20M	666.90M	885.69M	1.20B	930.20M	161.35M
	Total Liabilities
2.03B	2.00B	1.93B	1.95B	1.89B	1.26B
	Stockholders Equity
1.54B	1.56B	1.45B	1.33B	1.22B	1.08B
Cash Flow		Free Cash Flow
333.08M	351.76M	327.67M	-149.24M	170.51M	221.22M
	Operating Cash Flow
373.50M	394.89M	381.63M	-34.03M	250.84M	264.27M
	Investing Cash Flow
-45.10M	-105.19M	-34.58M	-142.98M	-899.36M	-48.11M
	Financing Cash Flow
-111.99M	-25.44M	-37.55M	-66.81M	420.48M	-60.56M

Central Garden Pet Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 35.50
• 50DMA: Positive
• 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 35.5 is below the 20-day moving average (MA) of 35.91, above the 50-day MA of 35.46, and below the 200-day MA of 36.73, indicating a neutral trend. The MACD of 0.09 indicates Positive momentum. The RSI at 48.34 is Neutral, neither overbought nor oversold. The STOCH value of 57.11 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
CENT	74 Outperform	$2.08B	19.01	8.07%	―	-4.60%	-26.61%
SENEA	71 Outperform	$636.62M	16.85	6.35%	―	4.01%	22.46%
HLF	68 Neutral	$842.27M	2.92	-31.74%	―	-2.45%	100.59%
JBSS	66 Neutral	$762.56M	13.71	16.58%	12.95%	7.40%	-14.93%
Sector *	65 Neutral	$8.92B	15.03	4.68%	6.11%	3.59%	-2.49%
STKL	61 Neutral	$672.34M	―	-5.95%	―	2.44%	91.41%
JJSF	58 Neutral	$2.28B	30.06	8.20%	2.67%	0.49%	-12.32%

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.