Chefs' Warehouse (NASDAQ:CHEF) Shares Up 9% on Better-Than-Expected Earnings

Key Points

• Shares of Chefs' Warehouse climbed about 9% after the company beat expectations, reporting $0.40 EPS vs. $0.23 expected and revenue of $1.06 billion (vs. $1.01B expected), with revenue up 11.4% year-over-year.
• Analysts are broadly positive—five Buy and two Hold ratings—with an average price target of $77.17 and individual targets roughly in the $74–$84 range.
• Insiders have sold meaningful stock recently (139,309 shares worth about $9.06M in the past 90 days), even as institutional ownership remains high at 91.55% and several large funds increased their stakes.

The Chefs' Warehouse, Inc. (NASDAQ:CHEF - Get Free Report)'s share price traded up 9% on Wednesday after the company announced better than expected quarterly earnings. The company traded as high as $70.96 and last traded at $70.0480. 89,153 shares traded hands during mid-day trading, a decline of 80% from the average session volume of 452,669 shares. The stock had previously closed at $64.24.

The company reported $0.40 EPS for the quarter, beating analysts' consensus estimates of $0.23 by $0.17. Chefs' Warehouse had a return on equity of 14.75% and a net margin of 1.74%.The company had revenue of $1.06 billion during the quarter, compared to analysts' expectations of $1.01 billion. During the same period in the prior year, the company earned $0.25 EPS. Chefs' Warehouse's revenue was up 11.4% compared to the same quarter last year.

Analyst Ratings Changes

A number of brokerages have recently commented on CHEF. Weiss Ratings raised Chefs' Warehouse from a "hold (c+)" rating to a "buy (b-)" rating in a research note on Monday, April 13th. BTIG Research reiterated a "buy" rating and issued a $74.00 price objective on shares of Chefs' Warehouse in a report on Wednesday, April 15th. UBS Group cut their target price on shares of Chefs' Warehouse from $83.00 to $80.00 and set a "buy" rating on the stock in a research report on Thursday, April 23rd. Zacks Research raised shares of Chefs' Warehouse from a "strong sell" rating to a "hold" rating in a report on Monday, April 13th. Finally, Wolfe Research set a $84.00 price target on shares of Chefs' Warehouse in a research note on Thursday, February 12th. Five equities research analysts have rated the stock with a Buy rating and two have assigned a Hold rating to the company's stock. According to data from MarketBeat.com, Chefs' Warehouse currently has an average rating of "Moderate Buy" and an average target price of $77.17.

Insiders Place Their Bets

In related news, General Counsel Alexandros Aldous sold 29,500 shares of the business's stock in a transaction on Friday, February 27th. The shares were sold at an average price of $71.22, for a total transaction of $2,100,990.00. Following the transaction, the general counsel owned 72,017 shares in the company, valued at $5,129,050.74. The trade was a 29.06% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, insider Christina Polychroni sold 3,317 shares of the stock in a transaction dated Monday, March 2nd. The stock was sold at an average price of $65.45, for a total transaction of $217,097.65. Following the transaction, the insider directly owned 30,141 shares in the company, valued at $1,972,728.45. This trade represents a 9.91% decrease in their position. The SEC filing for this sale provides additional information. In the last 90 days, insiders have sold 139,309 shares of company stock valued at $9,060,197. 11.10% of the stock is currently owned by insiders.

Hedge Funds Weigh In On Chefs' Warehouse

Large investors have recently added to or reduced their stakes in the business. Wellington Management Group LLP lifted its holdings in shares of Chefs' Warehouse by 12.2% in the fourth quarter. Wellington Management Group LLP now owns 2,930,463 shares of the company's stock valued at $182,656,000 after purchasing an additional 318,942 shares in the last quarter. Millennium Management LLC raised its position in Chefs' Warehouse by 2,871.7% in the 4th quarter. Millennium Management LLC now owns 251,376 shares of the company's stock valued at $15,668,000 after buying an additional 242,917 shares during the last quarter. Massachusetts Financial Services Co. MA raised its position in Chefs' Warehouse by 18.6% in the 4th quarter. Massachusetts Financial Services Co. MA now owns 1,104,826 shares of the company's stock valued at $68,864,000 after buying an additional 173,155 shares during the last quarter. Jefferies Financial Group Inc. lifted its stake in Chefs' Warehouse by 230.8% during the 3rd quarter. Jefferies Financial Group Inc. now owns 85,000 shares of the company's stock valued at $4,958,000 after acquiring an additional 150,000 shares in the last quarter. Finally, Summit Creek Advisors LLC purchased a new position in Chefs' Warehouse during the 3rd quarter worth $7,431,000. Institutional investors own 91.55% of the company's stock.

Chefs' Warehouse Stock Up 9.5%

The company has a current ratio of 2.05, a quick ratio of 1.23 and a debt-to-equity ratio of 1.19. The stock has a market capitalization of $2.87 billion, a PE ratio of 42.72 and a beta of 1.34. The stock's fifty day simple moving average is $63.89 and its 200-day simple moving average is $62.63.

About Chefs' Warehouse

Chefs' Warehouse, Inc is a specialty food distributor that supplies a broad range of high‐end ingredients and culinary products to professional chefs, restaurants, hotels, and other foodservice operators. Headquartered in Maspeth, New York, the company sources its portfolio from local artisans, boutique producers and leading global suppliers. Its core offerings include fresh and frozen proteins, specialty cuts of meat and seafood, handcrafted cheeses and charcuterie, seasonal produce, value‐added preparations, pantry staples and premium desserts and beverages.

The company operates a network of distribution centers strategically located in major metropolitan markets across North America.

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