Grocery Outlet Holding (GO) AI Stock Analysis

• Market Cap: $1.34B
• Dividend Yield: N/A
• Average Volume (3M): 3.72M
• Price to Earnings (P/E): 80.9
• Beta (1Y): 0.46
• Revenue Growth: 10.37%
• EPS Growth: -73.84%
• Country: US
• Employees: 1,692
• Sector: Consumer Defensive
• Sector Strength: 66
• Industry: Grocery Stores
• EPS (TTM): 0.13
• Shares Outstanding: 98,034,550
• 10 Day Avg. Volume: 3,271,390
• 30 Day Avg. Volume: 3,720,623
• PEG Ratio: 14.12
• Price to Book (P/B): 2.55
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 73.51
• Enterprise Value/Market Cap: 3.10
• Enterprise Value/Revenue: 0.24
• Enterprise Value/Gross Profit: 3.04
• Enterprise Value/Ebitda: 6.42
• 1Y Price Target: $16.36
• Price Target Upside: 20.03% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 11

• Rating: 60 Neutral
• Price Target: $14.00 ▲(2.71%Upside)

Grocery Outlet Holding's overall stock score reflects steady revenue growth and effective cost management, with strong operational cash flow. However, weak profitability metrics and a high P/E ratio suggest potential challenges. The technical indicators show downward momentum, and the earnings call presents a mixed outlook with both achievements and concerns. Strategic initiatives are in place to address these issues, offering some optimism for future performance.

Positive Factors

Financial Performance

GO took a step in the right direction with a sizable Q1 beat and guide reiteration.

Management and Leadership

The company is on the right track with a new CEO and CFO focusing on strategic priorities to restore long-term growth.

Market Reaction

Stock price has increased by 11% since 'Liberation Day,' showing some positive market reaction.

Negative Factors

Comparable Sales Growth

There is near-term pressure on comparable sales growth, which could impact the stock.

Sales and Revenue

Updated FY guide includes lower comps at +1-2% compared to previous expectations, indicating softer top-line trends.

System Issues

Transition to new tech systems has led to significant issues, affecting data visibility and financial system speeds.

Grocery Outlet Holding Business Overview & Revenue Model

Company Description

Grocery Outlet Holding Corp. owns and operates a network of independently operated stores in the United States. The company's stores offer products in various categories, such as dairy and deli, produce, floral, and fresh meat and seafood products, as well as grocery, general merchandise, health and beauty care, frozen foods, and beer and wine. As of August 09, 2022, it had 425 stores in eight states. The company was founded in 1946 and is headquartered in Emeryville, California.

How the Company Makes Money

Grocery Outlet makes money primarily through the sale of discounted grocery products and household goods. The company's revenue model hinges on purchasing excess inventory from both branded manufacturers and other retailers, which it acquires at significant discounts. This inventory is then sold through its network of independently operated stores, providing savings to customers while maintaining healthy margins. Key revenue streams include direct product sales, franchise fees from independent operators, and bulk purchasing agreements. A significant factor contributing to its earnings is the strong relationships it maintains with suppliers, allowing it to secure inventory at favorable prices, which is essential to sustaining its discount pricing strategy.

Grocery Outlet Holding Financial Statement Overview

Summary

Grocery Outlet Holding shows steady revenue growth with effective cost management, evidenced by a strong gross profit margin. However, profitability metrics like the net profit margin and ROE are weak, suggesting challenges in boosting shareholder returns. The company's moderate reliance on debt financing could pose risks if not managed carefully. Strong operational cash flow is offset by negative free cash flow, indicating investment needs or cash constraints.

Income Statement

Grocery Outlet Holding shows steady revenue growth, with a TTM revenue increase of 1.91% over the previous year. Gross profit margin is healthy at 30.50%, indicating effective cost management. However, net profit margin is relatively low at 0.38%, suggesting pressure on bottom-line profitability. The EBIT margin stands at 1.24%, reflecting moderate operational efficiency, while the EBITDA margin of 3.20% indicates some room for improvement in operational leverage.

Balance Sheet

The company's balance sheet reveals a moderate debt-to-equity ratio of 1.48, indicating reliance on debt financing. Return on equity (ROE) is low at 1.46%, suggesting limited returns for shareholders relative to equity. The equity ratio of 36.05% reflects a balanced capital structure but highlights potential risk if liabilities grow further.

Cash Flow

Cash flow analysis shows a decline in free cash flow, with a TTM free cash flow of -$66.42 million compared to the previous period. The operating cash flow to net income ratio is robust at 9.49, indicating strong cash generation relative to net income. However, the negative free cash flow to net income ratio of -3.87 highlights cash flow strains.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Mar 2022	Mar 2021
Income Statement		Total Revenue
4.46B	4.37B	3.97B	3.58B	3.08B	3.13B
	Gross Profit
1.36B	1.32B	1.24B	1.09B	948.79M	973.35M
	EBIT
55.26M	78.33M	125.78M	94.99M	89.09M	107.38M
	EBITDA
142.81M	193.23M	214.97M	173.24M	160.22M	165.43M
	Net Income Common Stockholders
17.17M	39.47M	79.44M	65.05M	62.31M	106.71M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
50.91M	62.83M	114.99M	102.73M	140.09M	105.33M
	Total Assets
3.27B	3.17B	2.97B	2.77B	2.67B	2.49B
	Total Debt
1.74B	1.66B	1.39B	1.41B	1.46B	1.38B
	Net Debt
1.69B	1.59B	1.28B	1.31B	1.32B	1.27B
	Total Liabilities
2.09B	1.98B	1.75B	1.66B	1.66B	1.56B
	Stockholders Equity
1.18B	1.20B	1.22B	1.11B	1.01B	922.31M
Cash Flow		Free Cash Flow
-66.42M	-74.65M	111.46M	38.44M	32.43M	50.46M
	Operating Cash Flow
163.06M	111.96M	303.45M	185.51M	165.59M	181.24M
	Investing Cash Flow
-291.82M	-274.03M	-194.16M	-149.93M	-136.71M	-133.79M
	Financing Cash Flow
112.79M	109.91M	-97.02M	-72.94M	5.88M	29.77M

Grocery Outlet Holding Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 13.63
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GO, the sentiment is Negative. The current price of 13.63 is below the 20-day moving average (MA) of 13.68, below the 50-day MA of 14.47, and below the 200-day MA of 15.82, indicating a bearish trend. The MACD of -0.28 indicates Negative momentum. The RSI at 46.09 is Neutral, neither overbought nor oversold. The STOCH value of 30.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GO.

Grocery Outlet Holding Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VLGEA	79 Outperform	$493.78M	9.56	11.87%	2.69%	3.94%	12.50%
NGVC	70 Outperform	$953.36M	23.35	23.38%	1.16%	9.36%	43.17%
Sector *	65 Neutral	$8.81B	14.92	4.67%	6.17%	3.60%	-2.89%
WMK	64 Neutral	$1.99B	18.53	7.54%	1.84%	1.76%	6.01%
ACI	62 Neutral	$12.22B	12.92	31.26%	2.83%	1.46%	-26.54%
IMKTA	61 Neutral	$1.13B	18.58	4.00%	1.09%	-7.79%	-64.85%
GO	60 Neutral	$1.34B	80.94	1.43%	―	10.37%	-73.84%

Grocery Outlet Holding Corporate Events

Grocery Outlet Holding Approves Key Governance Amendments

On June 2, 2025, Grocery Outlet Holding‘s stockholders approved amendments to the company’s Restated Certificate of Incorporation during the annual meeting. These amendments allow stockholders holding at least 25% of the company’s shares to call special meetings and permit officer exculpation in line with Delaware law changes. The amendments, effective June 4, 2025, aim to enhance stockholder rights and align with legal standards, potentially impacting the company’s governance and shareholder engagement.

The most recent analyst rating on (GO) stock is a Hold with a $16.00 price target. To see the full list of analyst forecasts on Grocery Outlet Holding stock, see the GO Stock Forecast page.

Grocery Outlet Holding VP Resignation Announced

On May 12, 2025, Lindsay E. Gray, Senior Vice President of Accounting at Grocery Outlet Holding Corp., announced her resignation effective June 2, 2025, to pursue another opportunity. Her departure was not due to any disagreements with the company’s operations, policies, or practices, indicating a smooth transition for the company.

The most recent analyst rating on (GO) stock is a Hold with a $16.00 price target. To see the full list of analyst forecasts on Grocery Outlet Holding stock, see the GO Stock Forecast page.

Grocery Outlet Announces Executive Departures Amid Restructuring

On May 5, 2025, Grocery Outlet announced the upcoming departures of two key executives, Ramesh Chikkala and Pamela B. Burke, who will receive separation benefits under the company’s Executive Severance Plan. The company reported its first-quarter fiscal 2025 financial results, highlighting an 8.5% increase in net sales to $1.13 billion and a 31.7% rise in adjusted EBITDA to $51.9 million. Despite an operating loss of $22.5 million due to restructuring charges, the company remains optimistic about its long-term potential, focusing on improving execution and becoming a beloved brand. The restructuring plan aims to optimize store growth and reduce costs, with actions expected to be completed by mid-2025.