Grocery Outlet (NASDAQ:GO) Shares Gap Up on 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 stock price gapped up prior to trading on Wednesday following a better than expected earnings announcement. 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.

The company reported $0.23 EPS for the quarter, topping the consensus estimate of $0.17 by $0.06. Grocery Outlet had a return on equity of 6.34% and a net margin of 0.18%. The business had revenue of $1.18 billion during the quarter, compared to the consensus estimate of $1.20 billion. During the same quarter last year, the company earned $0.25 EPS. The firm's revenue was up 4.5% compared to the same quarter last year.

Analysts Set New Price Targets

GO has been the subject of several analyst reports. Morgan Stanley upgraded Grocery Outlet from an "underweight" rating to an "equal weight" rating and raised their target price for the stock from $13.00 to $16.00 in a research note on Wednesday. Wells Fargo & Company raised their target price on Grocery Outlet from $18.00 to $19.00 and gave the stock an "overweight" rating in a research note on Wednesday, May 7th. UBS Group raised their target price on Grocery Outlet from $14.50 to $17.00 and gave the stock a "neutral" rating in a research note on Wednesday, May 7th. Craig Hallum raised Grocery Outlet from a "hold" rating to a "buy" rating and set a $17.00 price target on the stock in a report on Wednesday. Finally, Telsey Advisory Group reaffirmed a "market perform" rating and issued a $16.00 price target on shares of Grocery Outlet in a report on Wednesday. One equities research analyst has rated the stock with a sell rating, nine have given a hold rating and three have assigned a buy rating to the company's stock. According to MarketBeat, Grocery Outlet has a consensus rating of "Hold" and an average price target of $16.08.

Hedge Funds Weigh In On Grocery Outlet

Large investors have recently modified their holdings of the company. Sterling Capital Management LLC raised its holdings in shares of Grocery Outlet by 53.9% during 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 in the last quarter. Invesco Ltd. increased its stake in Grocery Outlet by 11.1% in the 4th quarter. Invesco Ltd. now owns 834,373 shares of the company's stock worth $13,025,000 after purchasing an additional 83,043 shares during the period. 111 Capital purchased a new position in Grocery Outlet in the 4th quarter worth approximately $207,000. D.A. Davidson & CO. purchased a new position in Grocery Outlet in the 1st quarter worth approximately $165,000. Finally, Hussman Strategic Advisors Inc. purchased a new position in Grocery Outlet in the 1st quarter worth approximately $881,000. 99.87% of the stock is owned by hedge funds and other institutional investors.

Grocery Outlet Stock Up 0.6%

The company has a current ratio of 1.21, a quick ratio of 0.25 and a debt-to-equity ratio of 0.38. The stock has a 50 day simple moving average of $13.67 and a 200 day simple moving average of $14.23. The firm has a market capitalization of $1.82 billion, a PE ratio of 264.89, a PEG ratio of 4.23 and a beta of 0.27.

Grocery Outlet Company Profile

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.