Stock Traders Purchase High Volume of Grocery Outlet Call Options (NASDAQ:GO)

Key Points

• Grocery Outlet saw unusually heavy options activity, with traders buying 5,661 call options on Wednesday, about 383% above its normal daily call volume.
• Analysts remain cautious overall: recent price-target changes were mixed, and the stock carries a consensus rating of "Reduce" with a consensus target of $10.32.
• Insiders have been buying shares, including major purchases by a director and the CEO, while the company also beat quarterly earnings and revenue estimates in its latest report.

Grocery Outlet Holding Corp. (NASDAQ:GO - Get Free Report) saw unusually large options trading activity on Wednesday. Stock investors bought 5,661 call options on the stock. This represents an increase of 383% compared to the typical daily volume of 1,172 call options.

Analysts Set New Price Targets

A number of equities analysts have recently weighed in on the stock. TD Cowen boosted their price objective on shares of Grocery Outlet from $6.00 to $8.00 and gave the company a "hold" rating in a research report on Thursday, May 14th. Morgan Stanley cut their price target on Grocery Outlet from $11.00 to $7.00 and set an "equal weight" rating for the company in a report on Thursday, March 5th. The Goldman Sachs Group decreased their price objective on Grocery Outlet from $12.00 to $9.00 and set a "sell" rating on the stock in a report on Thursday, February 19th. Wells Fargo & Company upped their target price on Grocery Outlet from $7.00 to $9.00 and gave the company an "equal weight" rating in a research note on Thursday, May 14th. Finally, Weiss Ratings upgraded Grocery Outlet from a "sell (d-)" rating to a "sell (d)" rating in a research note on Friday. Eleven research analysts have rated the stock with a Hold rating and two have issued a Sell rating to the stock. Based on data from MarketBeat, Grocery Outlet has a consensus rating of "Reduce" and a consensus price target of $10.32.

Insider Transactions at Grocery Outlet

In related news, Director Erik D. Ragatz bought 100,000 shares of the stock in a transaction on Monday, March 16th. The shares were bought at an average cost of $6.09 per share, for a total transaction of $609,000.00. Following the completion of the transaction, the director owned 426,500 shares of the company's stock, valued at $2,597,385. This represents a 30.63% increase in their position. The acquisition was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, CEO Jason J. N. Potter purchased 286,097 shares of the firm's stock in a transaction dated Thursday, March 19th. The shares were purchased at an average cost of $5.90 per share, for a total transaction of $1,687,972.30. Following the purchase, the chief executive officer directly owned 574,366 shares in the company, valued at approximately $3,388,759.40. This represents a 99.25% increase in their ownership of the stock. Additional details regarding this purchase are available in the official SEC disclosure. Insiders have purchased a total of 598,905 shares of company stock valued at $3,594,147 in the last ninety days. 4.50% of the stock is currently owned by company insiders.

Institutional Investors Weigh In On Grocery Outlet

Several institutional investors and hedge funds have recently made changes to their positions in GO. Royal Bank of Canada raised its holdings in shares of Grocery Outlet by 5.8% during the first quarter. Royal Bank of Canada now owns 122,565 shares of the company's stock worth $1,713,000 after purchasing an additional 6,736 shares during the period. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC grew its holdings in shares of Grocery Outlet by 14.1% during the first quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 357,856 shares of the company's stock valued at $5,003,000 after purchasing an additional 44,214 shares during the last quarter. Creative Planning lifted its holdings in shares of Grocery Outlet by 25.4% in the 2nd quarter. Creative Planning now owns 16,104 shares of the company's stock worth $200,000 after purchasing an additional 3,263 shares during the last quarter. JPMorgan Chase & Co. grew its stake in Grocery Outlet by 13.8% during the 2nd quarter. JPMorgan Chase & Co. now owns 220,432 shares of the company's stock worth $2,738,000 after buying an additional 26,725 shares during the last quarter. Finally, Franklin Resources Inc. acquired a new stake in Grocery Outlet in the second quarter worth $149,000. 99.87% of the stock is owned by institutional investors and hedge funds.

Grocery Outlet Stock Up 1.3%

Grocery Outlet stock traded up $0.12 during trading on Wednesday, reaching $8.99. 1,941,155 shares of the company's stock were exchanged, compared to its average volume of 3,390,077. Grocery Outlet has a 52-week low of $5.66 and a 52-week high of $19.41. The firm has a market cap of $888.80 million, a price-to-earnings ratio of -2.32, a PEG ratio of 13.73 and a beta of 0.67. The company has a debt-to-equity ratio of 0.59, a quick ratio of 0.27 and a current ratio of 1.28. The company's 50-day moving average is $7.78 and its two-hundred day moving average is $8.83.

Grocery Outlet (NASDAQ:GO - Get Free Report) last posted its earnings results on Wednesday, May 13th. The company reported $0.05 EPS for the quarter, topping 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 business had revenue of $1.17 billion for the quarter, compared to analysts' expectations of $1.15 billion. During the same period in the previous year, the company posted $0.13 earnings per share. The business's revenue for the quarter 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. On average, analysts predict that Grocery Outlet will post 0.38 earnings per share for the current year.

Grocery Outlet Company Profile

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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