Grocery Outlet (NASDAQ:GO) Trading 5.7% Higher - Here's Why

Key Points

• Grocery Outlet shares rose 5.7% in Tuesday trading, reaching as high as $7.75 before last trading around $8.03. Volume was far below average, with about 174,450 shares traded versus a normal daily volume of more than 3.45 million.
• Analyst sentiment remains cautious after several firms cut ratings or price targets, including Telsey Group, Goldman Sachs, Jefferies, and Weiss Ratings. Overall, the stock carries an average “Reduce” rating and a consensus target price of $10.32.
• Recent earnings topped expectations, with Grocery Outlet reporting $0.05 EPS versus the $0.02 estimate and revenue of $1.17 billion, up 3.6% year over year. The company also reaffirmed FY2026 EPS guidance of $0.45 to $0.55, while insiders have been buying shares heavily in recent months.

Grocery Outlet Holding Corp. (NASDAQ:GO - Get Free Report)'s share price was up 5.7% during mid-day trading on Tuesday . The company traded as high as $7.75 and last traded at $8.0260. Approximately 174,450 shares traded hands during trading, a decline of 95% from the average daily volume of 3,452,232 shares. The stock had previously closed at $7.59.

Analyst Upgrades and Downgrades

Several research analysts have recently weighed in on GO shares. Weiss Ratings cut Grocery Outlet from a "sell (d)" rating to a "sell (d-)" rating in a report on Friday. Telsey Advisory Group lowered Grocery Outlet from an "outperform" rating to a "market perform" rating and reduced their price target for the stock from $15.00 to $9.00 in a report on Thursday, March 5th. DA Davidson boosted their price target on shares of Grocery Outlet from $7.00 to $9.00 and gave the company a "neutral" rating in a research report on Thursday. The Goldman Sachs Group cut their price objective on shares of Grocery Outlet from $12.00 to $9.00 and set a "sell" rating for the company in a research report on Thursday, February 19th. Finally, Jefferies Financial Group reiterated a "hold" rating and issued a $7.00 price objective (down from $18.00) on shares of Grocery Outlet in a report on Thursday, March 5th. Eleven equities research analysts have rated the stock with a Hold rating and two have given a Sell rating to the company's stock. Based on data from MarketBeat.com, Grocery Outlet has an average rating of "Reduce" and an average target price of $10.32.

Grocery Outlet Price Performance

The stock's 50 day moving average is $7.13 and its two-hundred day moving average is $9.28. The company has a debt-to-equity ratio of 0.59, a current ratio of 1.28 and a quick ratio of 0.27. The stock has a market capitalization of $810.25 million, a PE ratio of -2.12, a price-to-earnings-growth ratio of 11.63 and a beta of 0.66.

Grocery Outlet (NASDAQ:GO - Get Free Report) last announced its quarterly earnings data on Wednesday, May 13th. The company reported $0.05 EPS for the quarter, beating analysts' consensus estimates of $0.02 by $0.03. Grocery Outlet had a negative net margin of 8.08% and a positive return on equity of 5.69%. The company had revenue of $1.17 billion for the quarter, compared to the consensus estimate of $1.15 billion. During the same period in the prior year, the firm posted $0.13 EPS. The company's quarterly revenue was up 3.6% compared to the same quarter last year. Grocery Outlet has set its FY 2026 guidance at 0.450-0.550 EPS. As a group, sell-side analysts forecast that Grocery Outlet Holding Corp. will post 0.37 earnings per share for the current fiscal year.

Insider Activity

In other Grocery Outlet news, CEO Jason J. N. Potter acquired 286,097 shares of the stock in a transaction that occurred on Thursday, March 19th. The shares were purchased at an average cost of $5.90 per share, with a total value of $1,687,972.30. Following the purchase, the chief executive officer owned 574,366 shares in the company, valued at approximately $3,388,759.40. The trade was a 99.25% 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 Jeffrey York bought 120,000 shares of the company's stock in a transaction on Monday, March 9th. The shares were acquired at an average price of $5.82 per share, with a total value of $698,400.00. Following the completion of the acquisition, the director directly owned 120,000 shares in the company, valued at $698,400. This represents a ∞ increase in their position. Additional details regarding this purchase are available in the official SEC disclosure. In the last 90 days, insiders have bought 899,905 shares of company stock valued at $5,396,307 and have sold 89,493 shares valued at $524,431. Insiders own 4.50% of the company's stock.

Institutional Trading of Grocery Outlet

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in GO. T. Rowe Price Investment Management Inc. increased its stake in Grocery Outlet by 54.0% during the 4th quarter. T. Rowe Price Investment Management Inc. now owns 15,763,945 shares of the company's stock worth $159,216,000 after buying an additional 5,528,722 shares during the period. Vanguard Group Inc. lifted its stake in Grocery Outlet by 1.9% in the fourth quarter. Vanguard Group Inc. now owns 11,255,936 shares of the company's stock valued at $113,685,000 after buying an additional 213,325 shares during the last quarter. Mackenzie Financial Corp grew its position in shares of Grocery Outlet by 0.5% during the fourth quarter. Mackenzie Financial Corp now owns 4,709,721 shares of the company's stock worth $47,757,000 after acquiring an additional 22,418 shares during the last quarter. Dimensional Fund Advisors LP increased its holdings in shares of Grocery Outlet by 5.0% in the 3rd quarter. Dimensional Fund Advisors LP now owns 4,619,851 shares of the company's stock worth $74,149,000 after acquiring an additional 221,693 shares during the period. Finally, Marshall Wace LLP lifted its position in Grocery Outlet by 0.5% in the 3rd quarter. Marshall Wace LLP now owns 4,577,371 shares of the company's stock valued at $73,467,000 after purchasing an additional 20,819 shares during the last quarter. Hedge funds and other institutional investors own 99.87% of the company's stock.

About Grocery Outlet

Grocery Outlet Holding Corp. NASDAQ: GO is a specialty discount retailer that offers consumers deeply discounted groceries by purchasing excess inventory, closeouts, and overstocks from manufacturers and distributors. Headquartered in Emeryville, California, the company operates two primary banners—Grocery Outlet and Fresh2Go—with a combined footprint of more than 400 stores. Its product assortment spans fresh produce, meat, dairy, bakery items, household staples, natural and organic offerings, and select specialty products, all sold at significant markdowns compared to conventional supermarkets.

The company's unique buying model enables it to source inventory through opportunistic purchases of surplus freight, discontinued items, and closeout deals, which it then passes on as savings to its customers.

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