United Natural Foods may be undervalued with poor growth indicators, but the 9 analysts following the company give it an rating of hold. Their target prices range from $13.0 to $35.0 per share, for an average of $22.89. At today's price of $14.66, United Natural Foods is trading -35.95% away from its average target price, suggesting there is an analyst consensus of strong upside potential for the stock.
United Natural Foods, Inc., together with its subsidiaries, distributes natural, organic, specialty, produce, and conventional grocery and non-food products in the United States and Canada. The mid-cap Consumer Discretionary company is based in Providence, RI. United Natural Foods has not offered a regular dividend during the last year.
United Natural Foods has a trailing twelve month P/E ratio of 9.5, compared to an average of 22.33 for the Consumer Discretionary sector. Considering its EPS guidance of $1.82, the company has a forward P/E ratio of 8.1.
The average compound growth rate of the company's last 6 years of reported earnings per share is -8.0% (the company doesn't issue forward EPS guidance). On this basis, the company's PEG ratio is -1.59, which indicates that its shares are overpriced.
On the other hand, the market is potentially undervaluing United Natural Foods in terms of its book value because its P/B ratio is 0.49. In comparison, the sector average P/B ratio is 3.12. The company's shares are currently -71.8% below their Graham number, indicating that its shares have a margin of safety.
If analysts are giving the stock a bad rating, it's likely that they are looking beyond simple valaution metrics and attempting to forecast the company's growth potential. For example, United Natural Foods has narrow margins as you can see in the financial summary below.
| 2017-09-26 | 2018-09-24 | 2019-10-01 | 2020-09-29 | 2021-09-28 | 2022-09-27 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $9,274 | $10,227 | $22,341 | $26,559 | $26,950 | $28,928 |
| Gross Margins | 15.0% | 15.0% | 14.0% | 15.0% | 15.0% | 14.0% |
| Operating Margins | 3% | 2% | 1% | 1% | 1% | 1% |
| Net Margins | 1.0% | 2.0% | -1.0% | -1.0% | 1.0% | 1.0% |
| Net Income (MM) | $130 | $163 | -$285 | -$274 | $149 | $248 |
| Net Interest Expense (MM) | -$17 | -$16 | -$181 | -$192 | -$204 | -$155 |
| Depreciation & Amort. (MM) | -$86 | -$88 | -$248 | -$282 | -$285 | -$285 |
| Earnings Per Share | $2.56 | $3.2 | -$5.53 | -$5.1 | $2.52 | $4.07 |
| EPS Growth | n/a | 25.0% | -272.81% | 7.78% | 149.41% | 61.51% |
| Diluted Shares (MM) | 51 | 51 | 52 | 54 | 59 | 61 |
| Free Cash Flow (MM) | $337 | $154 | $334 | $483 | $842 | $352 |
| Capital Expenditures (MM) | -$56 | -$45 | -$49 | -$26 | -$228 | -$21 |
| Net Current Assets (MM) | $458 | $670 | -$2,111 | -$2,740 | -$2,461 | -$2,039 |
| Long Term Debt (MM) | $150 | $31 | $2,819 | $2,427 | $2,175 | $2,109 |
| Net Debt / EBITDA | 0.46 | 0.06 | 5.87 | 3.98 | 3.57 | 3.26 |
