Caseys General Stores Inc (NASDAQ: CASY)

Sector: Consumer Cyclical Industry: Specialty Retail CIK: 0000726958
Market Cap 24.65 Bn
P/B 9.81
P/E 59.49
P/S 1.65
ROIC (Qtr) 10.19
Div Yield % 0.31
Rev 1y % (Qtr) 14.17
Total Debt (Qtr) 2.92 Bn
Debt/Equity (Qtr) 0.77
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About

Casey's General Stores, Inc., often simply referred to as Casey's, is a leading convenience store chain with a rich history dating back to 1967. Headquartered in Ankeny, Iowa, the company operates under various brand names, including Casey's, GoodStop, Bucky's, Minit Mart, and Lone Star Food Store, across 17 states. As of April 30, 2024, Casey's had an impressive 2,658 stores in operation, with approximately 72% of them situated in areas with populations of fewer than 20,000 individuals. Casey's generates revenue primarily through the retail sale...

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Investment thesis

Bull case

  • Strong operating cash flow of 1.26B provides robust 0.43x coverage of total debt 2.92B, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 492.02M provide 4.86x coverage of short-term debt 101.27M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 1.26B provides exceptional 11.56x coverage of interest expenses 108.87M, showing strong debt service capability.
  • Operating cash flow of 1.26B provides strong 22.98x coverage of stock compensation 54.75M, indicating sustainable incentive practices.
  • Strong tangible asset base of 7.32B provides 2.51x coverage of total debt 2.92B, indicating robust asset backing and low credit risk.

Bear case

  • Operating cash flow of 1.26B barely covers its investment activities of (1.83B), with a coverage ratio of -0.69, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 1.26B provides thin coverage of dividend payments of (77.99M) with a -16.13 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 492.02M provide limited coverage of acquisition spending of (1.28B), which is -0.38x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating earnings of 896.73M show weak coverage of depreciation charges of 433.02M, with a 2.07 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 713.58M represents just -2.74x of debt issuance (260.04M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Peer comparison

Companies in the Specialty Retail
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ULTA Ulta Beauty, Inc. 32.20 Bn 27.06 2.69 2.57 Bn
2 WSM Williams Sonoma Inc 29.62 Bn 25.19 3.40 1.47 Bn
3 TSCO Tractor Supply Co /De/ 28.42 Bn 25.23 1.93 5.72 Bn
4 DKS Dick'S Sporting Goods, Inc. 24.98 Bn 88.10 4.64 7.70 Bn
5 CASY Caseys General Stores Inc 24.65 Bn 59.49 1.65 2.92 Bn
6 BBY Best Buy Co Inc 17.85 Bn 11.66 0.41 4.09 Bn
7 MUSA Murphy USA Inc. 15.91 Bn 61.33 1.35 2.75 Bn
8 FIVE Five Below, Inc 11.68 Bn 37.94 2.64 2.01 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 3.03 2.23
EV to Cash from Ops. EV/CFO 31.74 14.70
EV to Debt EV to Debt 8.91 79.39
EV to EBIT EV/EBIT 43.62 -40.16
EV to EBITDA EV/EBITDA 28.77 11.51
EV to Free Cash Flow [EV/FCF] EV/FCF 52.28 -286.14
EV to Market Cap EV to Market Cap 1.06 6.33
EV to Revenue EV/Rev 1.74 2.39
Price to Book Value [P/B] P/B 9.81 32.78
Price to Earnings [P/E] P/E 59.49 -36.32
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 7.78 -4.05
Dividend Payout Ratio % Div Payout % (Qtr) 16.10 14.19
Dividend per Basic Share Div per Share (Qtr) 2.14 0.71
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 11.14 18.58
Interest Coverage Int. cover (Qtr) 8.24 4.43
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -3.33 13.87
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -67.46 33.75
Dividend Growth (1y) % Div 1y % (Qtr) 15.05 0.00
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 19.74 -272.99
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 17.54 588.45
EBIT Growth (1y) % EBIT 1y % (Qtr) 18.14 29.27
EBT Growth (1y) % EBT 1y % (Qtr) 11.95 -92.23
EPS Growth (1y) % EPS 1y % (Qtr) 13.31 -121.86
FCF Growth (1y) % FCF 1y % (Qtr) 63.64 71.80
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 16.42 2.50
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.98 1.24
Cash Payout Ratio Cash Payout (Qtr) 0.04 0.04
Cash Ratio Cash Ratio (Qtr) 0.43 0.74
Current Ratio Curr Ratio (Qtr) 1.05 3.56
Debt to Equity Ratio Debt/Equity (Qtr) 0.77 25.92
Interest Cover Ratio Int Coverage (Qtr) 8.24 4.43
Times Interest Earned Times Interest Earned (Qtr) 8.24 4.43
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 7.80 -42.64
EBIT Margin % EBIT Margin % (Qtr) 5.28 -131.12
EBT Margin % EBT Margin % (Qtr) 4.64 -64.70
Gross Margin % Gross Margin % (Qtr) 24.00 30.93
Net Profit Margin % Net Margin % (Qtr) 3.60 -65.71