Tractor Supply Co (TSCO, Financial) has recently garnered significant attention from investors and financial analysts, thanks to its strong financial performance and promising growth prospects. With a current share price of $283.42, Tractor Supply Co has experienced a slight daily decrease of 0.22%, yet it boasts an impressive three-month gain of 21.07%. A detailed analysis, supported by the GF Score, positions Tractor Supply Co for substantial future growth.
What Is the GF Score?
The GF Score is a proprietary stock performance ranking system developed by GuruFocus. It evaluates stocks based on five key aspects of valuation, which have shown a strong correlation with long-term stock performance from 2006 to 2021. Stocks with higher GF Scores typically yield higher returns. The GF Score ranges from 0 to 100, with 100 indicating the highest potential for outperformance. Tractor Supply Co boasts a GF Score of 96, signaling strong future performance potential.
- Financial strength rank: 6/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 5/10
- Momentum rank: 9/10
Understanding Tractor Supply Co's Business
Tractor Supply Co, with a market cap of $30.56 billion and annual sales of $14.65 billion, is the largest operator of retail farm and ranch stores in the United States. The company primarily serves recreational farmers and ranchers, with minimal exposure to commercial and industrial farm operations. It operates 2,233 stores under the Tractor Supply banner across 49 states, including 81 Orscheln Farm and Home stores (rebranded as Tractor Supply), and 202 Petsense by Tractor Supply stores. The company's revenue streams are diversified across livestock, equine & agriculture (27%), companion animal (25%), and seasonal & recreation (22%).
Financial Strength Breakdown
Tractor Supply Co's financial strength is evident in its robust balance sheet and prudent capital management. The company's Interest Coverage ratio stands at an impressive 32.75, indicating a strong ability to cover interest expenses. Furthermore, with an Altman Z-Score of 5.58, Tractor Supply Co is well-protected against financial distress. The company's strategic debt management is reflected in its favorable Debt-to-Revenue ratio of 0.35.
Profitability and Growth Metrics
Tractor Supply Co's profitability is highlighted by its high Profitability Rank and increasing operating margins over the past five years, reaching 10.16% in 2023. The company's Gross Margin has also improved, standing at 35.92% in 2023. These figures demonstrate Tractor Supply Co's efficiency in converting revenue into profit.
On the growth front, Tractor Supply Co has a Growth Rank of 10/10, with a 3-Year Revenue Growth Rate of 13.6%, outperforming 71.1% of its peers in the Retail - Cyclical industry. The company's EBITDA has also seen significant growth, further underscoring its expanding operations.
Conclusion
Considering Tractor Supply Co's robust financial strength, impressive profitability, and consistent growth metrics, the GF Score highlights the company's strong position for potential market outperformance. Investors looking for similar opportunities can explore more companies with strong GF Scores using the GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
