Whole Foods Market Inc

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WFM : NASDAQ : Services
$41.71 | %
Today's Range: 41.67 - 41.82
Avg. Daily Volume: 8272100.0
07/21/17 - 4:00 PM ET

Financial Analysis


WHOLE FOODS MARKET INC's gross profit margin for the second quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased. WHOLE FOODS MARKET INC has weak liquidity. Currently, the Quick Ratio is 0.95 which shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year.

At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by 2.25% 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 FY17 Q2 FY16
Net Sales ($mil)3738.03695.0
EBITDA ($mil)288.0353.0
EBIT ($mil)172.0241.0
Net Income ($mil)99.0142.0


Balance Sheet Q2 FY17 Q2 FY16
Cash & Equiv. ($mil)1012.0973.0
Total Assets ($mil)6513.06362.0
Total Debt ($mil)1049.01052.0
Equity ($mil)3359.03285.0


Profitability Q2 FY17 Q2 FY16
Gross Profit Margin37.1937.94
EBITDA Margin7.79.55
Operating Margin4.66.52
Sales Turnover2.432.45
Return on Assets6.178.0
Return on Equity11.9615.49
Debt Q2 FY17 Q2 FY16
Current Ratio1.581.57
Debt/Capital0.240.24
Interest Expense11.011.0
Interest Coverage15.6421.91


Share Data Q2 FY17 Q2 FY16
Shares outstanding (mil)318.8324.8
Div / share0.140.14
EPS0.310.44
Book value / share10.5410.11
Institutional Own % n/a n/a
Avg Daily Volume7882930.05702661.0

Valuation


BUY. The current P/E ratio indicates a significant premium compared to an average of 21.29 for the Food & Staples Retailing industry and a premium compared to the S&P 500 average of 24.41. For additional comparison, its price-to-book ratio of 3.98 indicates a premium versus the S&P 500 average of 3.04 and a premium versus the industry average of 3.81. 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 premium 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 33.30 Peers 21.29   WFM 11.36 Peers 9.25

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

WFM is trading at a significant premium to its peers.

 

Premium. 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 premium 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 30.85 Peers 18.21   WFM NM Peers 2.19

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 significant premium to its peers.

 

Neutral. 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's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
WFM 3.98 Peers 3.81   WFM -15.44 Peers 12.80

Average. 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 valuation on par with 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 0.84 Peers 0.51   WFM 1.68 Peers 7.08

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 significant premium to its industry.

 

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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