Kroger Company (KR) AI Stock Analysis

• Market Cap: $44.58B
• Dividend Yield: 1.98%
• Average Volume (3M): 5.87M
• Price to Earnings (P/E): 17.0
• Beta (1Y): -0.04
• Revenue Growth: -2.13%
• EPS Growth: 3.22%
• Country: US
• Employees: 409,000
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Grocery Stores
• EPS (TTM): 1.04
• Shares Outstanding: 662,678,200
• 10 Day Avg. Volume: 5,562,647
• 30 Day Avg. Volume: 5,868,864
• PEG Ratio: 0.70
• Price to Book (P/B): 5.32
• Price to Sales (P/S): 0.30
• P/FCF Ratio: 24.80
• Enterprise Value/Market Cap: 1.47
• Enterprise Value/Revenue: 0.45
• Enterprise Value/Gross Profit: 1.93
• Enterprise Value/Ebitda: 8.25
• 1Y Price Target: $78.07
• Price Target Upside: 15.57% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 71 Outperform
• Price Target: $75.00 ▲(11.03% Upside)

Kroger's overall stock score is driven by stable financial performance and positive earnings call highlights, particularly in e-commerce and identical sales growth. However, high leverage and slowing revenue growth are concerns. Technical indicators suggest neutral momentum, and valuation is fair, balancing growth prospects with risks.

Positive Factors

E-Commerce Growth

The significant growth in e-commerce sales indicates a strong adaptation to consumer trends, enhancing Kroger's market position in online retail and potentially leading to sustained revenue growth.

Identical Sales Increase

Consistent growth in identical sales demonstrates Kroger's effective strategies in core business areas, reinforcing its competitive position and supporting long-term revenue stability.

Operational Improvements

Operational improvements through productivity and cost optimization enhance Kroger's efficiency, potentially leading to better margins and profitability over time.

Negative Factors

High Leverage

High leverage can limit financial flexibility and increase risk, potentially impacting Kroger's ability to invest in growth opportunities or weather economic downturns.

Store Closures

Closing unprofitable stores may reduce operational costs but could also limit market reach and revenue potential if not offset by growth in other areas.

Revenue Growth Slowdown

Slowing revenue growth could indicate market saturation or increased competition, potentially challenging Kroger's ability to maintain its market position and profitability.

Kroger Company Business Overview & Revenue Model

Company Description

The Kroger Co. operates as a retailer in the United States. The company operates combination food and drug stores, multi-department stores, marketplace stores, and price impact warehouses. Its combination food and drug stores offer natural food and organic sections, pharmacies, general merchandise, pet centers, fresh seafood, and organic produce; and multi-department stores provide apparel, home fashion and furnishings, outdoor living, electronics, automotive products, and toys. The company's marketplace stores offer full-service grocery, pharmacy, health and beauty care, and perishable goods, as well as general merchandise, including apparel, home goods, and toys; and price impact warehouse stores provide grocery, and health and beauty care items, as well as meat, dairy, baked goods, and fresh produce items. It also manufactures and processes food products for sale in its supermarkets and online; and sells fuel through 1,613 fuel centers. As of January 29, 2022, the company operated 2,726 supermarkets under various banner names in 35 states and the District of Columbia. The Kroger Co. was founded in 1883 and is based in Cincinnati, Ohio.

How the Company Makes Money

Kroger generates revenue primarily through the sale of food and grocery items, which includes fresh produce, meat, dairy products, and canned goods. The company operates on a low-margin, high-volume business model, where it sells a large volume of products at competitive prices. Key revenue streams include in-store sales, online grocery orders, and pharmacy services. Additionally, Kroger earns income through its private label products, which typically have higher margins than national brands. The company also benefits from pharmacy sales, fuel centers, and partnerships with third-party vendors for advertising and promotions, contributing to its overall earnings.

Kroger Company Financial Statement Overview

Summary

Kroger demonstrates stable financial performance with consistent profitability and cash flow generation. Healthy margins and positive free cash flow growth are strengths, but high leverage and slowing revenue growth pose potential risks.

Income Statement

Kroger's income statement shows a stable performance with a slight revenue growth of 1.9% in the TTM period. The gross profit margin is healthy at 20.8%, and the net profit margin is modest at 1.9%. EBIT and EBITDA margins are stable, indicating consistent operational efficiency. However, the revenue growth has slowed compared to previous years, which could be a concern if the trend continues.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 2.71, indicating significant leverage, which could pose a risk if not managed properly. Return on equity is strong at 27.7%, reflecting efficient use of equity. The equity ratio is relatively low, suggesting a heavy reliance on debt financing.

Cash Flow

Cash flow analysis shows a positive free cash flow growth of 20% in the TTM period, indicating improved cash generation. The operating cash flow to net income ratio is 0.27, suggesting that cash flows are adequately covering net income. However, the free cash flow to net income ratio is moderate at 0.36, highlighting room for improvement in cash flow efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	147.00B	147.12B	150.04B	148.26B	137.89B	132.50B
Gross Profit	33.98B	33.40B	33.36B	31.78B	30.35B	30.90B
EBITDA	7.94B	7.64B	7.03B	7.02B	6.05B	7.29B
Net Income	2.73B	2.67B	2.16B	2.24B	1.66B	2.58B
Balance Sheet
Total Assets	53.59B	52.62B	50.51B	49.54B	49.09B	48.64B
Cash, Cash Equivalents and Short-Term Investments	6.02B	5.27B	3.10B	2.14B	2.90B	2.78B
Total Debt	25.18B	25.08B	19.25B	20.41B	20.44B	20.59B
Total Liabilities	44.31B	44.34B	38.90B	39.52B	39.66B	39.09B
Stockholders Equity	9.28B	8.29B	11.62B	10.04B	9.45B	9.58B
Cash Flow
Free Cash Flow	2.21B	1.78B	2.88B	1.23B	3.58B	3.95B
Operating Cash Flow	6.02B	5.79B	6.79B	4.31B	6.19B	6.82B
Investing Cash Flow	-3.43B	-3.23B	-3.75B	-3.02B	-2.61B	-2.81B
Financing Cash Flow	-505.00M	-490.00M	-2.17B	-2.29B	-3.44B	-2.71B

Kroger Company Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 67.55
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KR, the sentiment is Positive. The current price of 67.55 is above the 20-day moving average (MA) of 65.41, above the 50-day MA of 66.15, and above the 200-day MA of 67.45, indicating a bullish trend. The MACD of 0.24 indicates Negative momentum. The RSI at 56.92 is Neutral, neither overbought nor oversold. The STOCH value of 73.85 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KR.

Kroger Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IMKTA	72 Outperform	$1.40B	17.06	5.29%	0.86%	-5.42%	-20.80%
KR	71 Outperform	$44.58B	17.03	24.83%	1.98%	-2.13%	3.22%
SFM	71 Outperform	$8.16B	16.23	36.96%	―	16.60%	49.76%
ACI	68 Neutral	$9.94B	10.71	32.04%	3.31%	2.08%	-1.63%
WMK	67 Neutral	$1.63B	17.33	7.22%	2.07%	3.11%	6.54%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
GO	45 Neutral	$1.10B	―	-0.37%	―	7.22%	-108.99%

Kroger Company Corporate Events

Kroger’s Earnings Call Highlights Strong Growth Amid Challenges

Kroger’s Latest Earnings Call Reflects Strong Performance Amid Challenges