Grocery Outlet Holding (GO) AI Stock Analysis

• Market Cap: $937.21M
• Dividend Yield: N/A
• Average Volume (3M): 2.48M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.72
• Revenue Growth: 7.22%
• EPS Growth: -108.99%
• Country: US
• Employees: 1,692
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Grocery Stores
• EPS (TTM): 0.21
• Shares Outstanding: 98,137,230
• 10 Day Avg. Volume: 2,625,216
• 30 Day Avg. Volume: 2,484,681
• PEG Ratio: -0.77
• Price to Book (P/B): 1.28
• Price to Sales (P/S): 0.35
• P/FCF Ratio: -20.46
• Enterprise Value/Market Cap: 3.55
• Enterprise Value/Revenue: 0.73
• Enterprise Value/Gross Profit: 2.40
• Enterprise Value/Ebitda: 21.98
• 1Y Price Target: $14.50
• Price Target Upside: 50.41% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 52 Neutral
• Price Target: $9.50 ▼(-1.45% Downside)

The score is held back primarily by weak profitability and deteriorating free cash flow, alongside a bearish technical setup with the stock trading well below major moving averages. The latest earnings call provides some support via sales growth and promising store refresh results, but near-term comp guidance was reduced and earnings trends remain pressured; valuation is also unattractive due to negative earnings (negative P/E).

Positive Factors

Asset-light franchise & discount sourcing model

Grocery Outlet’s model of buying surplus/overstock and franchising independent operators reduces capital intensity and inventory cost. This structural sourcing advantage supports durable low-price positioning, scalable store growth, and steady fee income that can compound returns over time.

Stable gross margin (~30%)

A consistent ~30% gross margin reflects durable procurement economics from opportunistic buying and supplier relationships. Sustained gross margin provides a structural buffer to absorb promotional activity and supports operating profitability if SG&A is managed, aiding long-term margin recovery.

Repeatable store refresh and expansion program

The proven mid-single-digit comp lift from refresh pilots, plus plans to scale across many stores, indicate a repeatable operational lever to boost sales per unit. Combined with ongoing net new openings, this offers structural upside to revenue density and franchise economics over multiple quarters.

Negative Factors

Negative profitability and ROE

Persistent negative net margin and ROE signal the company is not currently converting sales into sustainable profits. Over the medium term this constrains reinvestment, limits ability to delever, and undermines shareholder returns unless operating efficiency or pricing power meaningfully improves.

Deteriorating free cash flow and weak cash conversion

Declining FCF and subpar cash conversion indicate operational cash generation cannot reliably fund growth or capital programs. This structural liquidity pressure raises reliance on external financing, can slow store rollouts and refresh rollouts, and reduces resilience to demand shocks.

Sales exposure to SNAP/EBT and policy risk

A meaningful share of sales derives from government assistance programs, making revenue and comps vulnerable to policy timing and benefit disruptions. This creates recurring downside tail risk to sales, cash flow and inventory planning that can persist until sales mix or geographic diversification changes.

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 generates revenue primarily through the sale of grocery items at discounted prices. Its revenue model is based on purchasing surplus and discontinued products from manufacturers and wholesalers at lower costs and then passing on those savings to consumers. Key revenue streams include sales of perishable goods such as fruits, vegetables, meats, and dairy products, as well as non-perishable items like canned goods, snacks, and household products. The company also benefits from strong partnerships with suppliers who provide products at reduced prices, allowing Grocery Outlet to maintain a wide variety of inventory while keeping operational costs low. Additionally, the company's franchise model allows for further income generation through franchise fees and royalties from its franchisee partners.

Grocery Outlet Holding Financial Statement Overview

Summary

Grocery Outlet Holding shows stable revenue growth and gross profit margins, but faces challenges with profitability and cash flow management. The high leverage and declining return on equity highlight potential financial risks. Overall, the company needs to focus on improving operational efficiency and cash flow generation to enhance financial stability.

Income Statement

Grocery Outlet Holding shows a modest revenue growth rate of 1.15% in the TTM, with a stable gross profit margin of 30.5%. However, the net profit margin is quite low at 0.38%, indicating challenges in converting revenue into profit. The EBIT and EBITDA margins have declined compared to previous years, suggesting increased operational costs or inefficiencies.

Balance Sheet

The company has a high debt-to-equity ratio of 1.48, indicating significant leverage, which could pose risks if not managed well. The return on equity has decreased to 1.42%, reflecting lower profitability on shareholders' investments. The equity ratio is stable, suggesting a balanced asset structure.

Cash Flow

Free cash flow has decreased significantly, with a negative growth rate of -30.19% in the TTM, and the free cash flow to net income ratio is negative, indicating cash flow challenges. The operating cash flow to net income ratio is 0.42, showing some ability to generate cash from operations, but it has declined from previous periods.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.57B	4.37B	3.97B	3.58B	3.08B	3.13B
Gross Profit	1.38B	1.32B	1.24B	1.09B	948.79M	973.35M
EBITDA	151.20M	192.35M	214.97M	173.09M	165.44M	166.96M
Net Income	-4.44M	39.47M	79.44M	65.05M	62.31M	106.71M
Balance Sheet
Total Assets	3.37B	3.17B	2.97B	2.77B	2.67B	2.49B
Cash, Cash Equivalents and Short-Term Investments	52.13M	62.83M	114.99M	102.73M	140.09M	105.33M
Total Debt	1.81B	1.66B	1.39B	1.41B	1.46B	1.38B
Total Liabilities	2.17B	1.98B	1.75B	1.66B	1.66B	1.56B
Stockholders Equity	1.20B	1.20B	1.22B	1.11B	1.01B	922.31M
Cash Flow
Free Cash Flow	-42.06M	-74.65M	111.46M	55.03M	42.20M	50.46M
Operating Cash Flow	203.79M	111.96M	303.45M	185.51M	165.59M	181.24M
Investing Cash Flow	-250.92M	-274.03M	-194.16M	-149.93M	-136.71M	-133.79M
Financing Cash Flow	30.61M	109.91M	-97.02M	-72.94M	5.88M	29.77M

Grocery Outlet Holding Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 9.64
• 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 9.64 is below the 20-day moving average (MA) of 10.02, below the 50-day MA of 10.96, and below the 200-day MA of 14.08, indicating a bearish trend. The MACD of -0.46 indicates Negative momentum. The RSI at 36.09 is Neutral, neither overbought nor oversold. The STOCH value of 39.62 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
IMKTA	72 Outperform	$1.29B	15.79	5.29%	0.93%	-5.42%	-20.80%
VLGEA	70 Outperform	$454.57M	8.91	11.22%	2.63%	3.88%	7.71%
NGVC	70 Neutral	$576.75M	12.54	24.02%	1.99%	7.19%	35.90%
WMK	67 Neutral	$1.61B	17.19	7.22%	2.06%	3.11%	6.54%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
ACI	54 Neutral	$8.56B	10.73	29.65%	3.49%	2.08%	-1.63%
GO	52 Neutral	$937.21M	-202.52	-0.37%	―	7.22%	-108.99%

Grocery Outlet Holding Corporate Events

Grocery Outlet Announces Leadership Transition in Merchandising Operations

On January 13, 2026, Grocery Outlet Holding Corp. announced that longtime Executive Vice President and Chief Purchasing Officer Steve Wilson will retire effective March 20, 2026, after 31 years with the company, and will receive separation benefits under its executive severance plan. Industry veteran Matt Delly, who joined the company in 2025 as Chief Merchandising Officer, will assume the newly combined role of Chief Merchandising and Purchasing Officer, integrating purchasing and merchandising operations in a move aimed at boosting efficiency, strengthening performance and enhancing support for the company’s independent operators and customers as part of its broader strategy to drive execution at scale.

The most recent analyst rating on (GO) stock is a Hold with a $9.50 price target. To see the full list of analyst forecasts on Grocery Outlet Holding stock, see the GO Stock Forecast page.

Grocery Outlet Reports Sales Decline Amid Government Shutdown

As of December 3, 2025, Grocery Outlet Holding Corp. reported a decline in comparable store sales for November 2025 due to a U.S. government shutdown affecting federally-funded assistance programs. This led to an 8.2% drop in sales from Electronic Benefits Transfer payments and a 0.5% decline in non-EBT transactions. Consequently, the company adjusted its outlook for the fourth quarter and fiscal year 2025, expecting flat comparable store sales and diluted adjusted earnings per share at the low end of its previous forecast. The company uses non-GAAP financial measures to assess performance, but these metrics have limitations and should not be viewed in isolation.

The most recent analyst rating on (GO) stock is a Hold with a $10.00 price target. To see the full list of analyst forecasts on Grocery Outlet Holding stock, see the GO Stock Forecast page.