KR

A Short Intro for Kroger Company Investors

Kroger Company shares fell by -1.1% during the day's afternoon session, and are now trading at a price of $46.93. Is it time to buy the dip? To better answer that question, it's essential to check if the market is valuing the company's shares fairly in terms of its earnings and equity levels.

A Lower P/B Ratio Than Its Sector Average but Trades Above Its Graham Number:

The Kroger Co. operates as a food and drug retailer in the United States. The company belongs to the Consumer Staples sector, which has an average price to earnings (P/E) ratio of 24.36 and an average price to book (P/B) ratio of 4.29. In contrast, Kroger Company has a trailing 12 month P/E ratio of 13.4 and a P/B ratio of 3.1.

Kroger Company's PEG ratio is 1.31, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.

Growing Revenues With a Flat Capital Expenditure Trend:

2020-01-31 2021-01-31 2022-01-31 2023-01-31
Revenue (MM) $122,286 $132,498 $137,888 $148,258
Gross Margins 22.1% 23.3% 22.0% 21.4%
Operating Margins 1.8% 2.1% 2.5% 2.8%
Net Margins 1.36% 1.95% 1.2% 1.51%
Net Income (MM) $1,659 $2,585 $1,655 $2,244
Net Interest Expense (MM) -603 -544 -571 -535
Net Interest Expense (MM) -$603 -$544 -$571 -$535
Depreciation & Amort. (MM) -$3,289 -$3,373 -$3,429 -$3,579
Earnings Per Share $2.04 $3.27 $2.17 $3.49
EPS Growth n/a 60.29% -33.64% 60.83%
Diluted Shares (MM) 805 781 754 718
Free Cash Flow (MM) $1,536 $3,950 $3,576 $1,233
Capital Expenditures (MM) -$3,128 -$2,865 -$2,614 -$3,078
Net Current Assets (MM) -$25,715 -$26,609 -$27,483 -$26,939
Current Ratio 0.77 0.81 0.75 0.76
Long Term Debt (MM) $12,136 $12,502 $12,809 $12,571
Net Debt / EBITDA 2.37 1.7 2.02 1.88

Kroger Company has growing revenues and a flat capital expenditure trend, wider gross margins than its peer group, and average operating margins with a positive growth rate. The company also benefits from a strong EPS growth trend, generally positive cash flows, and healthy leverage.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.

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