Customers push shopping carts outside a Grocery Outlet Holding Corp. store in San Francisco, … [+]
© 2019 Bloomberg Finance LP
Grocery Outlet (NASDAQ: GO), a supermarket company that offers discount, overstocked, and closeout products, had a strong debut in the stock market post its June 2019 IPO. While the stock rose from its IPO price of $22 to levels of around $40 in late August, driven by strong quarterly results and positive analyst reports, it has seen a sell-off over the last quarter, declining by close to 20% to levels of about $32 currently. There could be a couple of factors driving the decline. Firstly, the company’s valuation is relatively high, trading at close to 40x 2020 earnings. In comparison, the broader grocery sector trades at a forward P/E of under 20x. While the company’s growth partly justifies this higher multiple, investors, in general, have been becoming more cautious about growth stocks.
We ‘step back’ from these recent swings to review Grocery Outlet’s performance over the last few years, as a context for what might come next. Our Interactive dashboard, Why Is Grocery Outlet Stock Trending Lower? reviews the near term reasons and the big picture.
The context for the last few years:
A closer look At Grocery Outlet’s Total Revenues over the last few years and the outlook
Total Revenues for Grocery Outlet increased from $2.1 Bil in 2017 to $2.3 Bil in 2018; an increase of 10.2%. This compares with Total Revenues growth of 13.3% in 2017. We expect Total Revenues growth to be 11.5% in 2019.
A closer look At Grocery Outlet’s Total Expenses over the last few years and the outlook
Total Expense for Grocery Outlet increased from $2.05 Bil 2017 to $2.27 Bil in 2018; an increase of 10.5%. This compares with Total Expense growth of 13.0% in 2017. We expect Total Expense growth to be 9.5% in 2019.
How does Grocery Outlet’s Revenue Growth compare with rivals?
For more information on how Grocery Outlet’s revenue growth compares with rivals, view our interactive dashboard analysis.
How has Grocery Outlet’s EBT trended?
EBT for the company decreased from $25.8 Mil in 2017 to $21.9 Mil in 2018. We expect EBT to rise to $70 Mil in 2019.
How have Grocery Outlet’s Net Income and EPS trended?
For more details on Grocery Outlet’s Net Income and EPS, view our interactive dashboard analysis.
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