Investors are selling the stock thanks to the somewhat lower-than-expected guidance, TheStreet's Jim Cramer, co-manager of the Action Alerts PLUS portfolio, said on CNBC's "Stop Trading" segment.
It doesn't help that Rite Aid's management doesn't communicate with the Street as well as its competitors do. However, Cramer remains bullish on the stock, saying it will go higher along with CVS Health (CVS) and Walgreens Boots Alliance (WBA).
Trading around $30 per share, the stock trades at 31 times its trailing earnings, Cramer said. However, because it's growing so fast, its forward looking PE ratio isn't as high. The company is profitable, so Cramer said investors can buy the stock until it climbs between $35 to $38.