Kroger Company (KR) AI Stock Analysis

• Market Cap: $43.38B
• Dividend Yield: 2%
• Average Volume (3M): 7.80M
• Price to Earnings (P/E): 16.6
• Beta (1Y): -0.02
• Revenue Growth: -2.13%
• EPS Growth: 3.22%
• Country: US
• Employees: 409,000
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Grocery Stores
• EPS (TTM): 1.04
• Shares Outstanding: 662,678,200
• 10 Day Avg. Volume: 9,405,788
• 30 Day Avg. Volume: 7,802,900
• PEG Ratio: 0.70
• Price to Book (P/B): 5.32
• Price to Sales (P/S): 0.30
• P/FCF Ratio: 24.80
• Enterprise Value/Market Cap: 1.51
• Enterprise Value/Revenue: 0.45
• Enterprise Value/Gross Profit: 2.14
• Enterprise Value/Ebitda: 8.32
• 1Y Price Target: $77.75
• Price Target Upside: 18.77% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

• Rating: 65 Neutral
• Price Target: $70.00 ▲(6.94% Upside)

Kroger's overall stock score is driven by strong earnings call performance and stable financials. However, technical analysis indicates bearish momentum, and high leverage remains a concern. Valuation is moderate, with some income potential from dividends.

Positive Factors

E-commerce Growth

The significant growth in e-commerce indicates Kroger's successful adaptation to digital retail trends, enhancing its competitive position and potentially increasing market share in online grocery shopping.

Cash Flow Generation

Strong cash flow generation provides Kroger with the financial flexibility to invest in growth initiatives, pay dividends, and reduce debt, supporting long-term financial health and shareholder value.

Identical Sales Growth

Consistent growth in identical sales reflects Kroger's ability to attract and retain customers, indicating strong brand loyalty and effective sales strategies, which are crucial for sustained revenue growth.

Negative Factors

High Leverage

High leverage can increase financial risk, as it may limit Kroger's ability to invest in growth opportunities and make it more vulnerable to economic downturns, potentially impacting long-term stability.

Store Closures

Store closures could lead to reduced market presence and revenue, indicating challenges in maintaining profitability across locations, which may affect long-term growth and competitive positioning.

Slowing Revenue Growth

Slowing revenue growth suggests potential challenges in expanding market share or increasing sales, which could hinder Kroger's ability to sustain its competitive edge and achieve long-term financial targets.

Kroger Company Business Overview & Revenue Model

Company Description

The Kroger Co. operates as a retailer in the United States. The company operates combination food and drug stores, multi-department stores, marketplace stores, and price impact warehouses. Its combination food and drug stores offer natural food and organic sections, pharmacies, general merchandise, pet centers, fresh seafood, and organic produce; and multi-department stores provide apparel, home fashion and furnishings, outdoor living, electronics, automotive products, and toys. The company's marketplace stores offer full-service grocery, pharmacy, health and beauty care, and perishable goods, as well as general merchandise, including apparel, home goods, and toys; and price impact warehouse stores provide grocery, and health and beauty care items, as well as meat, dairy, baked goods, and fresh produce items. It also manufactures and processes food products for sale in its supermarkets and online; and sells fuel through 1,613 fuel centers. As of January 29, 2022, the company operated 2,726 supermarkets under various banner names in 35 states and the District of Columbia. The Kroger Co. was founded in 1883 and is based in Cincinnati, Ohio.

How the Company Makes Money

Kroger generates revenue primarily through the sale of food and grocery items, which includes fresh produce, meat, dairy products, and canned goods. The company operates on a low-margin, high-volume business model, where it sells a large volume of products at competitive prices. Key revenue streams include in-store sales, online grocery orders, and pharmacy services. Additionally, Kroger earns income through its private label products, which typically have higher margins than national brands. The company also benefits from pharmacy sales, fuel centers, and partnerships with third-party vendors for advertising and promotions, contributing to its overall earnings.

Kroger Company Financial Statement Overview

Summary

Kroger's financial statements depict a stable yet leveraged company with moderate profitability. The income statement shows stable gross profit margins but modest revenue growth. The balance sheet indicates high leverage with a debt-to-equity ratio of 2.83, posing financial risks. Cash flow is strong in terms of operating cash flow to net income ratio, but free cash flow growth has declined.

Income Statement

Kroger's income statement reveals a stable gross profit margin of approximately 23%, with a TTM net profit margin of 1.76%. The revenue growth has been modest, slightly declining over the past year. However, EBIT and EBITDA margins are relatively steady, indicating decent operational efficiency.

Balance Sheet

The balance sheet shows a high debt-to-equity ratio of 2.83, indicating significant leverage. Return on equity has been improving, currently at 29% TTM, suggesting effective use of equity. The equity ratio is low at 16.7%, highlighting potential financial risk due to high liabilities.

Cash Flow

Kroger's cash flow statement displays a healthy operating cash flow to net income ratio of 2.12 TTM, indicating strong cash generation relative to its earnings. However, the free cash flow growth has declined, and the free cash flow to net income ratio is relatively low, which could impact future liquidity.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	147.00B	147.12B	150.04B	148.26B	137.89B	132.50B
Gross Profit	30.64B	30.16B	30.24B	28.81B	27.52B	28.15B
EBITDA	7.88B	7.65B	7.04B	7.03B	6.06B	7.29B
Net Income	2.73B	2.67B	2.16B	2.24B	1.66B	2.58B
Balance Sheet
Total Assets	53.59B	52.62B	50.51B	49.54B	49.09B	48.64B
Cash, Cash Equivalents and Short-Term Investments	6.02B	5.27B	3.10B	2.14B	2.90B	2.78B
Total Debt	25.18B	25.08B	19.25B	20.41B	20.44B	20.59B
Total Liabilities	44.31B	44.34B	38.90B	39.52B	39.66B	39.09B
Stockholders Equity	9.28B	8.29B	11.62B	10.04B	9.45B	9.58B
Cash Flow
Free Cash Flow	2.21B	1.78B	2.88B	1.23B	3.58B	3.95B
Operating Cash Flow	6.02B	5.79B	6.79B	4.31B	6.19B	6.82B
Investing Cash Flow	-3.43B	-3.23B	-3.75B	-3.02B	-2.61B	-2.81B
Financing Cash Flow	-505.00M	-490.00M	-2.17B	-2.29B	-3.44B	-2.71B

Kroger Company Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 65.46
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KR, the sentiment is Negative. The current price of 65.46 is below the 20-day moving average (MA) of 66.88, below the 50-day MA of 69.25, and below the 200-day MA of 66.42, indicating a bearish trend. The MACD of -1.13 indicates Positive momentum. The RSI at 37.43 is Neutral, neither overbought nor oversold. The STOCH value of 26.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KR.

Kroger Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WMK	69 Neutral	$1.80B	18.13	8.07%	1.87%	2.49%	15.99%
SFM	67 Neutral	$10.74B	22.64	28.79%	―	16.83%	52.71%
KR	65 Neutral	$43.38B	16.58	24.83%	2.00%	-2.13%	3.22%
ACI	60 Neutral	$9.83B	10.71	29.60%	3.25%	1.96%	-14.99%
GO	58 Neutral	$1.55B	199.75	0.69%	―	8.47%	-85.17%
IMKTA	52 Neutral	$1.28B	23.14	3.54%	0.96%	-7.96%	-64.67%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%