Shares of Tractor Supply (TSCO, Financial) slid by 5.95% after the company posted its third-quarter 2024 financial results. The decline came as the company experienced minimal growth despite steady business operations.
Tractor Supply (TSCO, Financial), a leading operator of nearly 2,300 U.S. retail stores focusing on gardening supplies and animal feed, reported a slight revenue increase of 2% year over year, reaching $3.5 billion. This growth was largely attributed to new store openings. However, same-store sales saw a slight decrease of 0.2%, indicating challenges in sustaining comparable store sales growth.
Despite the revenue growth, the company's net income fell 5% to $242 million. On the brighter side, the company's gross margins have improved, standing slightly above 37%, showcasing enhanced profitability metrics. Interestingly, the net income figures were marginally better than what analysts had predicted.
In terms of valuation, Tractor Supply's stock is currently priced at $274.70. The company holds a price-to-earnings (P/E) ratio of 26.49 and a price-to-book (P/B) ratio of 12.8, which are notable when considering the stock's historical highs. The GF Value tool suggests that TSCO is currently fairly valued at $251.25, indicating a potential for price correction if market conditions do not improve. The company's market capitalization stands at $29.63 billion.
Tractor Supply (TSCO, Financial) is facing some medium warning signs, including a slowdown in revenue per share growth and a dividend yield near a two-year low. Also, the stock is trading close to its 10-year high in terms of P/B and P/S ratios. However, there is a strong Altman Z-Score of 5.63, indicating financial robustness, and the company is unlikely to be a manipulator as suggested by a strong Beneish M-Score of -2.59. Moreover, the company's operating margin is showing an expansion, which is typically a positive indicator of financial health.
Overall, Tractor Supply's (TSCO, Financial) current position in the market with a GF Score of 96 reflects strong fundamentals, but investors should remain cautious due to the slowing growth in same-store sales and the potential volatility in the stock price.
