Whole Foods Market Inc

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WFM : NASDAQ : Services
$33.72 | %
Today's Range: 33.11 - 33.79
Avg. Daily Volume: 6,013,700
07/22/16 - 4:00 PM ET

Financial Analysis


WHOLE FOODS MARKET INC's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased, representing a decrease to the bottom line. WHOLE FOODS MARKET INC has weak liquidity. Currently, the Quick Ratio is 0.91 which shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

During the same period, stockholders' equity ("net worth") has decreased by 18.52% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)3695.03648.0
EBITDA ($mil)353.0355.0
EBIT ($mil)241.0255.0
Net Income ($mil)142.0159.0


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)973.0903.0
Total Assets ($mil)6362.06052.0
Total Debt ($mil)1052.063.0
Equity ($mil)3285.04032.0


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin37.9438.68
EBITDA Margin9.559.73
Operating Margin6.526.99
Sales Turnover2.452.47
Return on Assets8.09.99
Return on Equity15.4915.0
Debt Q2 FY16 Q2 FY15
Current Ratio1.571.4
Debt/Capital0.240.02
Interest Expense11.00.0
Interest Coverage21.910.0


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)324.8360.3
Div / share0.140.13
EPS0.440.44
Book value / share10.1111.19
Institutional Own % n/a n/a
Avg Daily Volume6007552.05557267.0

Valuation


HOLD. This stock's P/E ratio indicates a discount compared to an average of 22.61 for the Food & Staples Retailing industry and a discount compared to the S&P 500 average of 25.05. To use another comparison, its price-to-book ratio of 3.28 indicates a premium versus the S&P 500 average of 2.81 and a discount versus the industry average of 3.83. The current price-to-sales ratio is well below the S&P 500 average, but above the industry average. Upon assessment of these and other key valuation criteria, WHOLE FOODS MARKET INC proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
WFM 22.26 Peers 22.61   WFM 10.92 Peers 10.98

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

WFM is trading at a valuation on par with its peers.

 

Average. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

WFM is trading at a valuation on par to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
WFM 21.06 Peers 19.78   WFM 8.24 Peers 2.43

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

WFM is trading at a premium to its peers.

 

Premium. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

WFM trades at a significant premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
WFM 3.28 Peers 3.83   WFM -10.25 Peers -2.76

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

WFM is trading at a discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, WFM is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
WFM 0.69 Peers 0.56   WFM 4.29 Peers 6.26

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

WFM is trading at a premium to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

WFM significantly trails its peers on the basis of sales growth

 

 

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