Luis Alvarez/DigitalVision via Getty Images Investment overview I wrote about Grocery Outlet Holding ( GO ) previously with a hold rating, as I wasn't sure about the earnings strength given signs of poor demand and weak legacy store performance. While I did not call for a sell rating, I believed staying on the sideline should be considered a "win" since the stock is down massively from ~$20 to $7 ...
Luis Alvarez/DigitalVision via Getty Images Investment overview I wrote about Grocery Outlet Holding ( GO ) previously with a hold rating, as I wasn't sure about the earnings strength given signs of poor demand and weak legacy store performance. While I did not call for a sell rating, I believed staying on the sideline should be considered a "win" since the stock is down massively from ~$20 to $7 as I write this update. I am now downgrading GO to sell because the story looks worse, not better. GO is no longer dealing with just tech debt. It is now facing a murkier value proposition and a store growth strategy that appears to have gone off track. The value proposition has slipped In my previous thesis, the main debate was whether GO could get past its systems disruption fast enough for the order guide, better buying tools, and improved operator stability to improve store productivity. While I was not bullish previously, I could still see a path where it could be done if GO executed well. Fast forward to today; that is no longer just the problem GO is facing. I believe GO's value proposition is getting murkier, and that directly threatens the reason for GO to trade at a premium multiple (traded at >30x forward PE at one point back in 2022). We can infer this from management's commentary in the Q4 2025 earnings call. Firstly, they noted consumer pressure got worse in Q4 and that weakness carried into Q1. Secondly, they also said customer research showed that while their base pricing remained competitive, value perception had weakened. Lastly, GO's effort to improve in-stocks and everyday assortment has squeezed the supply chain so much that it has reduced the flow of opportunistic product. That last point is important to note because it means GO has effectively weakened the part of the model that actually drives the shopping experience. Specifically, if you recall, the core value proposition of GO is not to win by looking like a normal discount grocer. GO's differentia...
5 popular Baby Boomer stocks are trading in discount territory, with MSFT down 23% YTD, RCL 25% off its highs, and VZ and KMB offering yields above 5%.
5 popular Baby Boomer stocks are trading in discount territory, with MSFT down 23% YTD, RCL 25% off its highs, and VZ and KMB offering yields above 5%.