BJ's Wholesale Club Holdings, Inc. (NYSE: BJ)

Sector: Consumer Defensive Industry: Discount Stores CIK: 0001531152
Market Cap 13.09 Bn
P/B 6.03
P/E 22.76
P/S 0.62
ROIC (Qtr) 12.43
Div Yield % 0.00
Rev 1y % (Qtr) 4.88
Total Debt (Qtr) 2.70 Bn
Debt/Equity (Qtr) 1.24
Add ratio to table...

About

BJ's Wholesale Club Holdings, Inc., often recognized as BJ's Wholesale Club, operates in the retail industry, specifically as a leading membership warehouse club in the eastern half of the United States. Established in 1984, the company now boasts an impressive 243 warehouse clubs and 174 gas stations across 20 states, with its stock trading on the New York Stock Exchange under the symbol "BJ". BJ's Wholesale Club's core business activities involve the provision of a curated selection of groceries, general merchandise, and services to its members...

Read more

Investment thesis

Bull case

  • Operating cash flow of 911.02M provides exceptional 20.77x coverage of interest expenses 43.86M, showing strong debt service capability.
  • Operating cash flow of 911.02M provides strong 17.61x coverage of stock compensation 51.74M, indicating sustainable incentive practices.
  • Tangible assets of 6.44B provide robust 6.81x coverage of other current liabilities 945.73M, indicating strong asset backing.
  • Operating cash flow of 911.02M fully covers other non-current liabilities 355M by 2.57x, showing strong long-term stability.
  • Operating cash flow of 911.02M provides strong 31.99x coverage of operating expenses 28.48M, showing operational efficiency.

Bear case

  • Operating cash flow of 911.02M barely covers its investment activities of (663.20M), with a coverage ratio of -1.37, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 45.12M against inventory of 1.69B, the 0.03 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 911.02M provides thin coverage of dividend payments of (25000) with a -36440.72 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Free cash flow of 249.64M provides weak coverage of capital expenditures of 661.38M, with a 0.38 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of 816.92M show weak coverage of depreciation charges of 281.75M, with a 2.90 ratio indicating high capital intensity and potential reinvestment needs.

Peer comparison

Companies in the Discount Stores
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 WMT Walmart Inc. 1,493.21 Bn 103.91 3.66 68.42 Bn
2 COST Costco Wholesale Corp /New 443.66 Bn 356.36 5.82 8.10 Bn
3 TGT Target Corp 61.67 Bn 21.00 0.82 20.04 Bn
4 DG Dollar General Corp 32.90 Bn 23.24 0.83 16.51 Bn
5 DLTR Dollar Tree, Inc. 27.88 Bn -9.55 1.47 7.66 Bn
6 BJ BJ's Wholesale Club Holdings, Inc. 13.09 Bn 22.76 0.62 2.70 Bn
7 OLLI Ollie's Bargain Outlet Holdings, Inc. 6.85 Bn 30.61 2.70 0.67 Bn
8 PSMT Pricesmart Inc 4.69 Bn 31.14 0.87 0.33 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.08 2.61
EV to Cash from Ops. EV/CFO 17.21 36.59
EV to Debt EV to Debt 5.81 13.49
EV to EBIT EV/EBIT 19.19 37.61
EV to EBITDA EV/EBITDA 14.27 35.41
EV to Free Cash Flow [EV/FCF] EV/FCF 62.80 66.89
EV to Market Cap EV to Market Cap 1.20 1.06
EV to Revenue EV/Rev 0.74 2.05
Price to Book Value [P/B] P/B 6.03 12.39
Price to Earnings [P/E] P/E 22.76 59.65
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 23,007.40 2,558.05
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 19.94
Dividend per Basic Share Div per Share (Qtr) 0.00 1.57
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 21.35
Interest Coverage Int. cover (Qtr) 18.63 12.56
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -20.98 -8.17
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 33.20 36.06
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -7.48
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 1.60 -44.54
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 3.32 0.21
EBIT Growth (1y) % EBIT 1y % (Qtr) 1.13 -49.73
EBT Growth (1y) % EBT 1y % (Qtr) 2.67 -68.31
EPS Growth (1y) % EPS 1y % (Qtr) 3.80 -17.04
FCF Growth (1y) % FCF 1y % (Qtr) -30.00 37.06
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 4.24 10.99
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 2.80 1.82
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.07
Cash Ratio Cash Ratio (Qtr) 0.02 0.20
Current Ratio Curr Ratio (Qtr) 0.79 1.14
Debt to Equity Ratio Debt/Equity (Qtr) 1.24 1.24
Interest Cover Ratio Int Coverage (Qtr) 18.63 12.56
Times Interest Earned Times Interest Earned (Qtr) 18.63 12.56
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 5.20 4.61
EBIT Margin % EBIT Margin % (Qtr) 3.86 0.99
EBT Margin % EBT Margin % (Qtr) 3.65 2.30
Gross Margin % Gross Margin % (Qtr) 18.60 24.97
Net Profit Margin % Net Margin % (Qtr) 2.70 1.03