The Kroger Co.
The Kroger Co. Fundamental Analysis
The Kroger Co. (KR) shows weak financial fundamentals with a PE ratio of 56.47, profit margin of 0.54%, and ROE of 9.41%. The company generates $149.0B in annual revenue with weak year-over-year growth of -1.94%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 17.4/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze KR's fundamental strength across five key dimensions:
Efficiency Score
WeakKR struggles to generate sufficient returns from assets.
Valuation Score
ModerateKR shows balanced valuation metrics.
Growth Score
ModerateKR shows steady but slowing expansion.
Financial Health Score
WeakKR carries high financial risk with limited liquidity.
Profitability Score
WeakKR struggles to sustain strong margins.
Key Financial Metrics
Is KR Expensive or Cheap?
P/E Ratio
KR trades at 56.47 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, KR's PEG of -0.78 indicates potential undervaluation.
Price to Book
The market values The Kroger Co. at 6.33 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 4.50 times EBITDA. This is generally considered low.
How Well Does KR Make Money?
Net Profit Margin
For every $100 in sales, The Kroger Co. keeps $0.54 as profit after all expenses.
Operating Margin
Core operations generate 1.06 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $9.41 in profit for every $100 of shareholder equity.
ROA
The Kroger Co. generates $1.53 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
The Kroger Co. generates limited operating cash flow of $6.11B, signaling weaker underlying cash strength.
Free Cash Flow
The Kroger Co. generates weak or negative free cash flow of $2.27B, restricting financial flexibility.
FCF Per Share
Each share generates $3.43 in free cash annually.
FCF Yield
KR converts 4.97% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
56.47
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-0.78
vs 25 benchmark
P/B Ratio
Price to book value ratio
6.33
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.31
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
3.58
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.88
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.09
vs 25 benchmark
ROA
Return on assets percentage
0.02
vs 25 benchmark
ROCE
Return on capital employed
0.05
vs 25 benchmark
How KR Stacks Against Its Sector Peers
| Metric | KR Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 56.47 | 23.01 | Worse (Expensive) |
| ROE | 9.41% | 1228.00% | Weak |
| Net Margin | 0.54% | -4010.00% (disorted) | Weak |
| Debt/Equity | 3.58 | 0.78 | Weak (High Leverage) |
| Current Ratio | 0.88 | 2.35 | Weak Liquidity |
| ROA | 1.53% | -157546.00% (disorted) | Weak |
KR outperforms its industry in 0 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews The Kroger Co.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
34.44%
Industry Style: Defensive, Dividend, Low Volatility
High GrowthEPS CAGR
79.51%
Industry Style: Defensive, Dividend, Low Volatility
High GrowthFCF CAGR
38.82%
Industry Style: Defensive, Dividend, Low Volatility
High Growth