Grocery Outlet (NASDAQ:GO) Shares Gap Up Following Strong Earnings

Key Points

• Grocery Outlet's shares surged from a closing price of $13.02 to an opening price of $15.95 following an earnings announcement that exceeded analysts' expectations.
• The company reported earnings of $0.23 per share, beating the consensus estimate of $0.17, while revenue came in at $1.18 billion, slightly below expectations of $1.20 billion.
• Analysts have recently upgraded Grocery Outlet's stock ratings, with price targets varying from $16.00 to $19.00, indicating a positive outlook for the company's performance.

Grocery Outlet Holding Corp. (NASDAQ:GO - Get Free Report)'s share price gapped up prior to trading on Wednesday after the company announced better than expected quarterly earnings. The stock had previously closed at $13.02, but opened at $15.95. Grocery Outlet shares last traded at $16.73, with a volume of 3,100,282 shares traded.

The company reported $0.23 earnings per share for the quarter, beating the consensus estimate of $0.17 by $0.06. The company had revenue of $1.18 billion during the quarter, compared to the consensus estimate of $1.20 billion. Grocery Outlet had a return on equity of 6.34% and a net margin of 0.18%. Grocery Outlet's revenue was up 4.5% on a year-over-year basis. During the same period in the previous year, the firm posted $0.25 EPS.

Analyst Upgrades and Downgrades

A number of analysts have recently commented on the company. UBS Group upped their price objective on Grocery Outlet from $14.50 to $17.00 and gave the stock a "neutral" rating in a report on Wednesday, May 7th. Wells Fargo & Company upped their price objective on Grocery Outlet from $18.00 to $19.00 and gave the stock an "overweight" rating in a report on Wednesday, May 7th. Jefferies Financial Group upgraded Grocery Outlet from a "hold" rating to a "buy" rating and upped their price objective for the stock from $13.00 to $18.00 in a report on Wednesday, April 16th. Craig Hallum upgraded Grocery Outlet from a "hold" rating to a "buy" rating and set a $17.00 price objective for the company in a report on Wednesday. Finally, Morgan Stanley upgraded Grocery Outlet from an "underweight" rating to an "equal weight" rating and upped their price objective for the stock from $13.00 to $16.00 in a report on Wednesday. One analyst has rated the stock with a sell rating, nine have assigned a hold rating and three have issued a buy rating to the stock. According to MarketBeat.com, the stock currently has an average rating of "Hold" and an average price target of $16.08.

Hedge Funds Weigh In On Grocery Outlet

A number of institutional investors and hedge funds have recently added to or reduced their stakes in GO. Quadrant Capital Group LLC boosted its position in Grocery Outlet by 276.3% in the 4th quarter. Quadrant Capital Group LLC now owns 2,773 shares of the company's stock valued at $43,000 after buying an additional 2,036 shares during the last quarter. Invesco Ltd. boosted its position in Grocery Outlet by 11.1% in the 4th quarter. Invesco Ltd. now owns 834,373 shares of the company's stock valued at $13,025,000 after buying an additional 83,043 shares during the last quarter. Raymond James Financial Inc. purchased a new position in Grocery Outlet in the 4th quarter valued at about $1,079,000. Sterling Capital Management LLC boosted its position in Grocery Outlet by 53.9% in the 4th quarter. Sterling Capital Management LLC now owns 5,808 shares of the company's stock valued at $91,000 after buying an additional 2,034 shares during the last quarter. Finally, Grandeur Peak Global Advisors LLC boosted its position in Grocery Outlet by 13.4% in the 4th quarter. Grandeur Peak Global Advisors LLC now owns 899,180 shares of the company's stock valued at $14,036,000 after buying an additional 106,019 shares during the last quarter. 99.87% of the stock is owned by hedge funds and other institutional investors.

Grocery Outlet Stock Up 0.6%

The company has a debt-to-equity ratio of 0.38, a current ratio of 1.21 and a quick ratio of 0.25. The firm's 50-day moving average price is $13.67 and its 200 day moving average price is $14.23. The firm has a market cap of $1.82 billion, a P/E ratio of 264.89, a PEG ratio of 4.25 and a beta of 0.27.

About Grocery Outlet

Grocery Outlet Holding Corp. operates as a retailer of consumables and fresh products sold through independently operated stores in the United States. Its stores offer products in various categories, such as dairy and deli, produce, floral, fresh meat, seafood products, grocery, general merchandise, health and beauty care, frozen food, beer and wine, and ethnic products.