Natural Grocers (NGVC) AI Stock Analysis

• Market Cap: $913.20M
• Dividend Yield: 1.16%
• Average Volume (3M): 265.57K
• Price to Earnings (P/E): 22.5
• Beta (1Y): 0.69
• Revenue Growth: 9.36%
• EPS Growth: 43.17%
• Country: US
• Employees: 3,332
• Sector: Consumer Defensive
• Sector Strength: 54
• Industry: Grocery Stores
• EPS (TTM): 0.75
• Shares Outstanding: 22,950,380
• 10 Day Avg. Volume: 180,795
• 30 Day Avg. Volume: 265,567
• PEG Ratio: 1.57
• Price to Book (P/B): 4.68
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 15.72
• Enterprise Value/Market Cap: 1.33
• Enterprise Value/Revenue: 0.24
• Enterprise Value/Gross Profit: 3.20
• Enterprise Value/Ebitda: 4.14
• 1Y Price Target: $44.00
• Price Target Upside: 10.58% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 67 Neutral
• Price Target: $44.00 ▲(10.58%Upside)

Natural Grocers' strong earnings performance and solid financial health are the main drivers of the stock's score. However, technical analysis shows bearish trends, and valuation metrics suggest potential overvaluation. The company's high leverage remains a concern, but its positive earnings call sentiment and financial metrics provide a balanced outlook.

Natural Grocers Business Overview & Revenue Model

Company Description

Natural Grocers by Vitamin Cottage, Inc., together with its subsidiaries, retails natural and organic groceries, and dietary supplements in the United States. The company's stores offer natural and organic grocery products, such as organic produce; bulk food products; private label products comprising pasta, pasta sauce, ketchup, canned beans and vegetables, frozen vegetables, frozen fruits, frozen meals, frozen pizza, bread, baking mixes, plant based butter, olive and coconut oil, coconut milk, honey, maple syrup, preserves, chocolate, coffee, bacon, beef jerky, canned seafood, popcorn, tortilla chips, taco shells, eggs, cheese, apple sauce, apple cider vinegar, spring water, paper products, cleaning products, and other products; dry, frozen, and canned groceries; meat and seafood products; dairy products, dairy substitutes, and eggs; prepared foods; bread and baked products; beverages; and beer, wine, and hard cider products. Its stores also provide private label dietary supplements; body care products consisting of cosmetics, skin care, hair care, fragrance, and personal care products containing natural and organic ingredients; pet care and food products; books and handouts; and household and general merchandise, including cleaning supplies, paper products, and dish and laundry soaps, as well as other common household products, such as diapers. The company operates its retail stores under the Natural Grocers by Vitamin Cottage trademark. As of February 1, 2022, it operated 162 stores in 20 states. The company also offers science-based nutrition education programs to help customers make informed health and nutrition choices. Natural Grocers by Vitamin Cottage, Inc. was founded in 1955 and is headquartered in Lakewood, Colorado.

How the Company Makes Money

Natural Grocers generates revenue primarily through the sale of natural and organic groceries, dietary supplements, and body care products. The company's key revenue streams include in-store sales across its numerous retail locations and online sales through its e-commerce platform. By focusing on high-quality, organic, and natural products, Natural Grocers caters to a niche market of health-conscious consumers willing to pay a premium for healthier options. Additionally, the company benefits from strategic partnerships with organic farmers, suppliers, and manufacturers that help ensure a steady supply of quality products at competitive prices. Natural Grocers also emphasizes nutrition education as a value-add service to customers, which helps drive store traffic and customer loyalty, contributing to overall revenue growth.

Natural Grocers Financial Statement Overview

Summary

Natural Grocers shows solid financial performance with consistent revenue growth and improved profitability. However, its high leverage ratio poses a financial risk, albeit offset by strong cash generation and high returns on equity.

Income Statement

Natural Grocers has demonstrated consistent revenue growth with a TTM revenue increase of 4.5% from the previous year. The gross profit margin remains stable at 29.2%, signaling efficient cost management. The net profit margin has improved to 3.2%, reflecting enhanced profitability. EBIT and EBITDA margins are at 4.3% and 5.6% respectively, showing operational efficiency improvements.

Balance Sheet

The company maintains a high debt-to-equity ratio of 1.74, indicating significant leverage, which could pose financial risks. However, the return on equity stands at a healthy 21.4%, showing effective use of shareholder funds to generate profits. The equity ratio of 29.0% suggests a relatively lower reliance on equity financing.

Cash Flow

Natural Grocers reports robust free cash flow growth of 64%, highlighting strong cash generation capabilities. The operating cash flow to net income ratio of 1.78 reflects efficient conversion of net income into cash. The free cash flow to net income ratio at 1.39 indicates solid cash flow sustainability relative to earnings.

Breakdown	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement
Total Revenue	1.24B	1.14B	1.09B	1.06B	1.04B
Gross Profit	364.81M	326.93M	304.88M	292.19M	283.14M
EBITDA	77.91M	62.08M	61.66M	59.86M	60.34M
Net Income	33.94M	23.24M	21.36M	20.58M	20.01M
Balance Sheet
Total Assets	655.48M	669.18M	663.11M	655.08M	681.79M
Cash, Cash Equivalents and Short-Term Investments	8.87M	18.34M	12.04M	23.68M	28.53M
Total Debt	346.51M	370.18M	393.37M	401.52M	400.14M
Total Liabilities	481.22M	498.34M	507.30M	512.35M	508.73M
Stockholders Equity	174.25M	170.84M	155.81M	142.73M	173.07M
Cash Flow
Free Cash Flow	35.08M	26.51M	8.25M	25.59M	36.92M
Operating Cash Flow	73.76M	64.61M	39.69M	53.88M	66.50M
Investing Cash Flow	-38.60M	-37.95M	-31.14M	-27.75M	-29.56M
Financing Cash Flow	-44.63M	-20.35M	-20.19M	-30.98M	-14.63M

Natural Grocers Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 39.79
• 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 NGVC, the sentiment is Neutral. The current price of 39.79 is above the 20-day moving average (MA) of 39.36, below the 50-day MA of 43.35, and below the 200-day MA of 40.78, indicating a neutral trend. The MACD of -0.77 indicates Negative momentum. The RSI at 45.75 is Neutral, neither overbought nor oversold. The STOCH value of 56.32 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NGVC.

Natural Grocers Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VLGEA	76 Outperform	$484.06M	9.52	11.87%	2.75%	3.94%	12.50%
SFM	74 Outperform	$16.09B	37.01	35.74%	―	15.51%	53.77%
WMK	69 Neutral	$2.07B	19.32	7.54%	1.77%	1.76%	6.01%
NGVC	67 Neutral	$913.20M	22.48	23.38%	1.16%	9.36%	43.17%
Sector *	65 Neutral	$27.20B	15.73	-4.29%	2.57%	1.03%	4.90%
IMKTA	65 Neutral	$1.23B	20.71	4.00%	1.00%	-7.79%	-64.85%
GO	58 Neutral	$1.37B	83.08	1.43%	―	10.37%	-73.84%

Natural Grocers Corporate Events

Natural Grocers Announces New Chief Financial Officer

Todd Dissinger retired as Chief Financial Officer of Natural Grocers on December 31, 2024, with Richard Hallé taking over the position effective January 1, 2025. This leadership transition marks a significant change in the company’s financial management, potentially affecting its strategic direction and stakeholder relations.