Weis Markets, Inc. – Value Analysis (NYSE:WMK) : April 27, 2017

Capitalcube gives Weis Markets, Inc. a score of 72.

Our analysis is based on comparing Weis Markets, Inc. with the following peers – Whole Foods Market, Inc., Ingles Markets, Incorporated Class A, Kroger Co., SUPERVALU INC., Village Super Market, Inc. Class A and SpartanNash Company (WFM-US, IMKTA-US, KR-US, SVU-US, VLGEA-US and SPTN-US).

Investment Outlook

Weis Markets, Inc. has a fundamental score of 72 and has a relative valuation of OVERVALUED.

Fundamental Score

Access our research and ratings on Weis Markets, Inc.

Company Overview

  • Compared to peers, relative underperformance last month is down from a median performance last year.
  • It’s current Price/Book of 1.69 is about median in its peer group.
  • The market expects WMK-US to grow at about the same rate as the peers and to maintain the median returns it currently generates.
  • WMK-US‘s relatively high profit margins are burdened by relative asset inefficiency.
  • The company’s year-on-year change in revenues and earnings are better than the median among its peer group.
  • Over the last five years, WMK-US‘s return on assets has improved from median to better than the median among its peers, suggesting the company has found relative operating advantages.
  • The company’s relatively high pre-tax margin suggests tight control on operating costs versus peers.
  • WMK-US‘s revenue growth in recent years and current P/E ratio are both around their respective peer medians suggesting that historical performance and long-term growth expectations for the company are largely in sync.
  • The company is likely overinvesting in a business with only median returns.
  • WMK-US has the financial and operating capacity to borrow quickly.

Access our research and ratings on Weis Markets, Inc.

Leverage & Liquidity

WMK-US has the financial and operating capacity to borrow quickly.

  • With debt at a relatively low 3.64% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 22.80%), and a well-cushioned interest coverage level of 408.31x, WMK-US can probably borrow quickly. We classify the company as Quick & Able in terms of its capacity to raise additional debt.
  • All 6 peers for the company have an outstanding debt balance.

WMK-US has maintained its Quick & Able profile from the prior year-end.

  • WMK-US‘s interest coverage is its lowest over the last four years and compares to a high of 999x in 2015.
  • While its interest coverage decreased to 408.31x from 999x (in 2015), its peer median increased during this period to 7.75x from 6.91x.
  • Interest coverage fell 591.53 points relative to peers.
  • WMK-US‘s debt-EV is its highest over the last four years and compares to a low of 0% in 2015.
  • While its debt-EV increased to 3.64% from 0% (in 2015), its peer median decreased during this period to 22.80% from 24.96%.
  • Relative to peers, debt-EV rose 5.81 percentage points.

Access the detailed analysis for Weis Markets, Inc.

Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
Whole Foods Market, Inc. 10.54 1.53 16.88 108.85
Ingles Markets, Incorporated Class A 48.54 1.87 2.83 18.58
Kroger Co. 32.23 0.8 6.37 36.32
SUPERVALU INC. 67.03 1.25 1.31 17.4
Village Super Market, Inc. Class A 12.71 1.92 9.56 116.71
SpartanNash Company 22.8 1.77 7.75 39.42
Weis Markets, Inc. 3.64 1.75 408.31 457.4
Peer Median 22.8 1.75 7.75 39.42
Best In Class 3.64 1.92 408.31 457.4

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Company Profile

Weis Markets, Inc. engages in the ownership and operation of retail food stores. Its retail stores offer groceries, dairy products, frozen foods, meats, seafood, fresh produce, floral, pharmacy services, deli products, prepared foods, bakery products, beer and wine, fuel, and general merchandise items, such as health and beauty care and household products. The company was founded by Harry Weis and Sigmund Weis in 1912 and is headquartered in Sunbury, PA.

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