Grocery Outlet Holding Corp. (NASDAQ:GO) Stock Has Average Target Price of $10.50

Key Points

• Analysts remain cautious: Grocery Outlet has an average “Reduce” rating from 14 analysts, including two sells, 11 holds, and one buy. The average 12-month price target is $10.50, below the stock’s reported $12.79 opening price.
• Quarterly results exceeded expectations: The company reported EPS of $0.20 versus the $0.13 consensus estimate and revenue of $1.19 billion versus expectations of $1.17 billion. Revenue increased 1.1% year over year, although the company posted a negative net margin.
• Insiders and institutions showed buying interest: Two insiders purchased a combined 23,000 shares, while institutional investors own 99.87% of the company’s stock.

Shares of Grocery Outlet Holding Corp. (NASDAQ:GO - Get Free Report) have been assigned an average rating of "Reduce" from the fourteen ratings firms that are currently covering the stock, Marketbeat reports. Two equities research analysts have rated the stock with a sell recommendation, eleven have assigned a hold recommendation and one has given a buy recommendation to the company. The average 12-month target price among brokers that have issued a report on the stock in the last year is $10.50.

Several brokerages have commented on GO. TD Cowen restated a "hold" rating on shares of Grocery Outlet in a research note on Tuesday, August 18th. DA Davidson boosted their price objective on Grocery Outlet from $9.00 to $12.00 and gave the stock a "neutral" rating in a research report on Thursday, August 13th. Roth Capital reissued a "neutral" rating and issued a $10.00 price objective on shares of Grocery Outlet in a report on Thursday, August 13th. Wells Fargo & Company increased their price objective on Grocery Outlet from $9.00 to $11.00 and gave the stock an "equal weight" rating in a report on Thursday, August 13th. Finally, Morgan Stanley raised their target price on Grocery Outlet from $7.00 to $11.00 and gave the company an "equal weight" rating in a research report on Thursday, August 13th.

Grocery Outlet Stock Performance

Shares of NASDAQ GO opened at $12.79 on Tuesday. The stock has a market capitalization of $1.27 billion, a P/E ratio of -3.30, a P/E/G ratio of 8.95 and a beta of 0.66. The firm's 50-day moving average price is $11.64 and its two-hundred day moving average price is $9.73. Grocery Outlet has a 52-week low of $5.66 and a 52-week high of $15.92. The company has a quick ratio of 0.30, a current ratio of 1.29 and a debt-to-equity ratio of 0.60.

Grocery Outlet (NASDAQ:GO - Get Free Report) last posted its earnings results on Wednesday, August 12th. The company reported $0.20 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $0.13 by $0.07. The company had revenue of $1.19 billion for the quarter, compared to analysts' expectations of $1.17 billion. Grocery Outlet had a positive return on equity of 5.84% and a negative net margin of 8.04%. The firm's quarterly revenue was up 1.1% compared to the same quarter last year. During the same period last year, the business posted $0.23 earnings per share. As a group, sell-side analysts forecast that Grocery Outlet will post 0.42 earnings per share for the current year.

Insider Activity at Grocery Outlet

In related news, insider Paul Miller acquired 8,000 shares of the stock in a transaction that occurred on Thursday, August 20th. The shares were acquired at an average price of $10.90 per share, for a total transaction of $87,200.00. Following the completion of the purchase, the insider directly owned 72,171 shares of the company's stock, valued at $786,663.90. The trade was a 12.47% increase in their ownership of the stock. The purchase was disclosed in a legal filing with the SEC, which is available through the SEC website. Also, Director Carey Jaros bought 15,000 shares of the company's stock in a transaction that occurred on Thursday, August 27th. The shares were purchased at an average cost of $11.70 per share, for a total transaction of $175,500.00. Following the acquisition, the director owned 60,000 shares of the company's stock, valued at $702,000. This represents a 33.33% increase in their ownership of the stock. The disclosure for this purchase is available in the SEC filing. Company insiders own 5.60% of the company's stock.

Institutional Investors Weigh In On Grocery Outlet

A number of institutional investors and hedge funds have recently modified their holdings of the stock. Abel Hall LLC boosted its stake in Grocery Outlet by 7.1% in the 3rd quarter. Abel Hall LLC now owns 19,607 shares of the company's stock worth $221,000 after purchasing an additional 1,298 shares during the period. NorthCrest Asset Manangement LLC lifted its stake in Grocery Outlet by 13.5% in the 3rd quarter. NorthCrest Asset Manangement LLC now owns 15,282 shares of the company's stock worth $182,000 after acquiring an additional 1,821 shares in the last quarter. GAMMA Investing LLC lifted its stake in Grocery Outlet by 23.4% in the 3rd quarter. GAMMA Investing LLC now owns 10,615 shares of the company's stock worth $119,000 after acquiring an additional 2,016 shares in the last quarter. Tidal Investments LLC purchased a new stake in Grocery Outlet in the 2nd quarter worth about $784,000. Finally, Engineers Gate Manager LP acquired a new stake in Grocery Outlet during the 2nd quarter worth about $310,000. Institutional investors and hedge funds own 99.87% of the company's stock.

About Grocery Outlet

Grocery Outlet Holding Corp. operates a network of discount grocery stores in the United States under the Grocery Outlet banner. The company offers a broad selection of food and household products, including fresh produce, meat, dairy, packaged groceries, beverages, health and beauty items, and general merchandise.

Grocery Outlet's business model is based on purchasing excess inventory, discontinued products, seasonal goods, and other opportunistic merchandise from manufacturers and distributors.

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