Value
6.6/10data confidence 83%| Component | Sub-score |
|---|---|
| P/S | 10.0 |
| EV/EBITDA | 3.0 |
| Fwd P/E | 6.8 |
| PEG | 10.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 18.7x
- ▸PEG: 0.14
GO · Why this verdict
Why Grocery Outlet Holding (GO) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score4.5/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Business quality is below the 4.0 floor at 1.9, with no competitive moat and cash burn of 1% of revenue, so margins are thin. Quality breakdown | Quality should rise toward 4.0 and free cash flow should turn positive over the next 12 months. | →Stable |
| CounterA Piotroski F-Score score of 5.6 and a current ratio score of 4.9 suggest the balance sheet is not distressed, and grocery demand is defensive. | ||
EPS beat estimates in 3 of the last 4 quarters, including $0.20 versus $0.12 in August, with an average surprise of +45.9%. Avg surprise pct | EPS should meet or beat the estimate at the 2026-11-03 report and stay above $0.15 per quarter. | ↓Deteriorating |
| CounterThe average surprise is inflated by tiny estimates (a $0.02 estimate in May), and the March quarter was a miss, so execution is uneven. | ||
The $13.30 price is 28.5% above the $9.50 analyst target, so the stock has run ahead of analyst valuations. Upside pct | Analysts should raise targets above $13.30 as earnings keep beating, or the price should converge down toward the target. | →Stable |
| CounterAnalyst targets lag a stock in a recovery, and rising on-balance volume with institutions accumulating suggests buyers believe in the turnaround. | ||
The stock is overbought (RSI 75) above its 200-day average, while short interest of 32% shows a large bearish bet. Momentum breakdown | Price should hold above the $12.37 stop level while RSI cools from overbought. | ↓Deteriorating |
| CounterA heavily shorted stock in an uptrend can squeeze higher, and the put/call ratio of 0.5 is not bearish. | ||
Insiders bought about $262,700 and sold about $16,000 over 90 days, a small but bullish net signal alongside institutional accumulation. Insider breakdown | Net insider activity should stay positive through the next two quarters. | →Stable |
| CounterA net purchase of $246,518 (0.019% of market cap) is too small to be meaningful as a conviction signal. | ||
Business quality is below the 4.0 floor at 1.9, with no competitive moat and cash burn of 1% of revenue, so margins are thin.
→StableQuality breakdown
- Expectation
- Quality should rise toward 4.0 and free cash flow should turn positive over the next 12 months.
CounterA Piotroski F-Score score of 5.6 and a current ratio score of 4.9 suggest the balance sheet is not distressed, and grocery demand is defensive.
EPS beat estimates in 3 of the last 4 quarters, including $0.20 versus $0.12 in August, with an average surprise of +45.9%.
↓DeterioratingAvg surprise pct
- Expectation
- EPS should meet or beat the estimate at the 2026-11-03 report and stay above $0.15 per quarter.
CounterThe average surprise is inflated by tiny estimates (a $0.02 estimate in May), and the March quarter was a miss, so execution is uneven.
The $13.30 price is 28.5% above the $9.50 analyst target, so the stock has run ahead of analyst valuations.
→StableUpside pct
- Expectation
- Analysts should raise targets above $13.30 as earnings keep beating, or the price should converge down toward the target.
CounterAnalyst targets lag a stock in a recovery, and rising on-balance volume with institutions accumulating suggests buyers believe in the turnaround.
The stock is overbought (RSI 75) above its 200-day average, while short interest of 32% shows a large bearish bet.
↓DeterioratingMomentum breakdown
- Expectation
- Price should hold above the $12.37 stop level while RSI cools from overbought.
CounterA heavily shorted stock in an uptrend can squeeze higher, and the put/call ratio of 0.5 is not bearish.
Insiders bought about $262,700 and sold about $16,000 over 90 days, a small but bullish net signal alongside institutional accumulation.
→StableInsider breakdown
- Expectation
- Net insider activity should stay positive through the next two quarters.
CounterA net purchase of $246,518 (0.019% of market cap) is too small to be meaningful as a conviction signal.
Per-dimension breakdown
Quality
1.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.9 |
| Gross margin | 2.0 |
| Op margin | 0.7 |
| Net margin | 0.0 |
| Current ratio | 4.9 |
| FCF quality | 0.0 |
| Moat | 3.1 |
| Piotroski F | 5.6 |
- ▸Cash-burning: FCF -1% of revenue
- ▸No competitive moat
- ▸Quality concerns
Growth
3.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.8 |
| EPS growth | 4.7 |
Momentum
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 3.8 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 4.4 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.0 |
| Analyst rating | 5.0 |
| Price target | 3.3 |
- ▸Below analyst target
Insider
7.5/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.5 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Insider buying (low materiality) — $246,518 (0.020% of mkt cap)
- ▸Institutions accumulating
Peer rank
2.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.0 |
| quality rank | 0.0 |
| growth rank | 2.0 |
Technical
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.7 |
| support resistance | 4.9 |
| 52w position | 4.8 |
| gap | 6.0 |
Risk (lower is worse)
2.8/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 0.4 |
| days to cover | 0.8 |
| volatility | 2.8 |
| put call | 3.7 |
| implied vol | 0.0 |
| beta | 9.0 |
| debt equity | 2.7 |
- ▸High short interest justified: 31%
- ▸High IV: 82%
Catalyst
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 6.5 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| news activity | 5.0 |
- ▸Strong earnings: 3B/1M
- ▸Earnings in 12 days
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (4)
- MOMENTUM:4.7>=4.5
- INSIDER:OK
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-2.0=NEGATIVE
Warning (3)
- MOMENTUM:4.7<5.5 (soft — BUY_NOW allowed but watch)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
- EARNINGS_PROXIMITY:12d<=14d (soft)
Reward-to-Risk
-2.02
Upside
-23.3%
Downside
11.5%
Sizing output
AVOID
SetupRange Bound — RSI 58 mid-range, Bollinger mid-band
EdgeCatalyst-Driven — Earnings in 12d with 3/4 beat streak
SuitabilityAggressive — MCap $1.2B<$5B
Investment implication
The SELL_IF_HOLDING verdict reflects the ASYMMETRY gate's -2.0=NEGATIVE outcome against Insider at 7.5 and asymmetric R:R of -2.02.
The strongest dimensions are Insider at 7.5, Value at 6.6, and Catalyst at 6.6; the weakest are Quality at 1.9, Peer rank at 2.3, and Risk (lower is worse) at 2.8. The V9 engine flagged 1 failed gate with 3 warnings, producing an asymmetric reward-to-risk of -2.02 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Earnings Beat Momentum
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P2Weak Quality No Moat
Trip ifFree cash flow margin falls below -3% of revenue from the current -1%.
- P3Price Above Analyst Target
Trip ifAnalyst target rises above $13.30, the current price, closing the 28.5% gap.
- P4Overbought Uptrend With High Short Interest
Trip ifPrice falls below $12.37, the stop level, from the current $13.30.
- P5Insider Buying Support
Trip ifInsider sales are more than $1M over 90 days with no purchases.