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ZYBERNO

Stock Report

Updated Sep 1, 2026

Grocery Outlet Holding Corp. (GO)

Consumer Staples • NASDAQ

$12.17

Professional Investment Analysis

ZYBERNO SCORE →

Is it a great business? Is it getting better?

29.0/100

POOR BUSINESS

Grocery Outlet Holding Corp. (GO) scores 29/100 — concerning metrics indicating significant structural or financial risks.

📊 How is the Zyberno Score calculated? +

The Zyberno Score answers one question: "Is this a quality business worth owning?" It's a 0-100 investment grade that evaluates business fundamentals across four critical dimensions, based on principles from Warren Buffett, Benjamin Graham, Peter Lynch, and Charlie Munger.

The 4 Core Categories (25 points each):

1. PROFITABILITY (25 pts)

Metrics: ROE, ROIC, Net Margin, Operating Margin
Thresholds: ROE >20% excellent • ROIC >20% excellent • Net Margin >20% excellent • Operating Margin >25% excellent

2. FINANCIAL STRENGTH (25 pts)

Metrics: Debt-to-Equity, Current Ratio, Interest Coverage, Altman Z-Score
Thresholds: D/E <0.3 excellent • Current Ratio >2.5 excellent • Interest Coverage >10x excellent • Altman Z >3.0 safe

3. CASH FLOW QUALITY (25 pts)

Metrics: Free Cash Flow, OCF vs Net Income, FCF Margin
Thresholds: Positive & growing FCF excellent • OCF/NI >1.2x excellent (cash earnings exceed accounting)

4. GROWTH & CONSISTENCY (25 pts)

Metrics: Revenue Growth, Net Income Growth, FCF Growth, Piotroski F-Score
Thresholds: Growth via log-linear regression • Piotroski 8-9 excellent, 6-7 good

Score Interpretation:

75-100

GREAT BUSINESS

65-74

GOOD BUSINESS

50-64

AVERAGE BUSINESS

30-49

WEAK BUSINESS

0-29

POOR BUSINESS

→ View full GO quality analysis & detailed breakdown

VALUATION SIGNAL

MARGIN OF SAFETY

Is this stock cheap or expensive relative to what the business has historically generated for owners?

-53.9%

Overvalued

Growth gap unavailable — insufficient data for reverse DCF calculation.

⚠ Significant divergence between Owner Earnings and Free Cash Flow (2.90×). Intrinsic Value and Brina Gap are likely overstated — acquisition-related D&A is inflating Owner Earnings. Verify earnings quality before acting.

🎯 Expected Annual Return →

-15.9%

Margin of Safety convergence — your return if the market re-prices to intrinsic value (5-yr annualised)

13.4%

Yield + growth — what the business alone earns you, even if the market never re-rates

💰 How is Margin of Safety calculated? +

Margin of Safety measures how much discount or premium you're paying relative to a stock's intrinsic value. It's Benjamin Graham's core principle: the larger the margin, the lower your downside risk.

Formula: (Intrinsic Value − Current Price) ÷ Intrinsic Value × 100%

How We Calculate Intrinsic Value (DCF Method):

Step 1: Calculate current Owner Earnings (OCF − Maintenance CapEx)

Step 2: Calculate company-specific growth rate using log-linear regression on 16 quarters of Owner Earnings

Step 3: Project 10 years forward using the calculated growth rate

Step 4: Discount each year's cash flow to present value using 10% discount rate

Step 5: Calculate terminal value using 3% perpetual growth rate

Step 6: Sum all discounted cash flows = Intrinsic Value

What The Percentages Mean:

+50% or more

EXCELLENT — Very undervalued

+25% to +50%

GOOD — Attractive discount

0% to +25%

FAIR — Reasonable value

0% to -25%

CAUTION — Slight premium

-25% or worse

POOR — Overvalued

"Price is what you pay, value is what you get." — Warren Buffett

→ View full GO valuation analysis · → View full GO Brina Gap analysis

📈 How is Brina Gap calculated? +

Brina Gap measures the difference between the growth a business can fundamentally sustain and the growth the market is already pricing in.

Formula: Fundamental Growth Rate − Market-Implied Growth Rate

The Two Components:

Fundamental Growth Rate = ROIC × Reinvestment Rate

What the business can sustainably grow at based on how much it reinvests and what return it earns on that capital. Grounded in historical financials.

Market-Implied Growth Rate = Reverse DCF

The growth rate the current Enterprise Value implicitly assumes. Calculated by back-solving a 10-year DCF model (10% WACC, 3% terminal growth) until the present value of projected cash flows equals EV.

What The Gap Means:

Gap > +5% Market Underestimates — potential upside

+2% to +5% Slight Underestimate

-2% to +2% Fairly Priced — market consensus matches fundamentals

-5% to -2% Slight Overestimate

Gap < -5% Market Overestimates — price embeds optimism fundamentals don't support

A positive gap (market underestimates) combined with a positive Margin of Safety is the strongest combined signal — the business is both cheap historically and forward economics are stronger than the price suggests.

Critical Financial Health Indicators

Return on Equity (Profitability):CRITICAL (-40.1%)

Debt-to-Equity (Solvency Risk):POOR (1.76x)

Operating Margin (Operational Efficiency):CRITICAL (-7.9%)

Return on Capital (Capital Efficiency):CRITICAL (-13.3%)

📊 Valuation Trilogy

Three interconnected metrics for complete valuation analysis

Click any metric for full methodology and detailed analysis

Zyberno's Verdict

Grocery Outlet Holding Corp. (GO) stock report — Zyberno Score 29/100 (POOR BUSINESS), Margin of Safety -53.9%, -16% expected annual return. Full financial analysis on Zyberno.

According to Zyberno's DCF model, Grocery Outlet Holding Corp. (GO) trades at $12.17 against an estimated intrinsic value per share of $7.91 — a -53.9% Margin of Safety based on Owner Earnings of $97.90M TTM, projected at -8.4% growth for 10 years with a 2.5% terminal growth rate. Zyberno's model translates this into a 5-year expected return of -15.9% annually.

Over the trailing twelve months, GO generated $97.90M in Owner Earnings. Capital was deployed as follows: $6.00K paid as dividends, $190.63M invested in capital expenditures. Reinvestment rate: -39.6%. Owner Earnings have declined at 8.4% annually over the trailing five years using log-linear regression.

DIVISION I: EXECUTIVE SUMMARY

A. Market Valuation

Market Price & Capitalization (2)

Current Price:12.17

Market Cap:$1.21B

Valuation Multiples (3)

P/B Ratio:1.48x

P/S Ratio:0.25x

Peg Ratio:-999.00x

Enterprise Metrics (2)

Enterprise Value:$2.11B

Pfcf Ratio:47.97x

Price Action & Momentum (3)

12-1 Momentum:

-32.8% (22th pctile)

📈 Click to view full GO Momentum analysis →

Momentum Percentile:22 / 100

% of 52-Week High:64.8%

B. Profitability Assessment

Return Metrics (5)

ROE:

-40.1%

📊 Click to view full GO ROE analysis →

ROA:-12.3%

Roic:

-13.3%

📊 Click to view full GO ROIC analysis →

Reinvestment Rate:-39.6%

Fundamental Growth Rate (g):5.3%

Margin Analysis (3)

Operating Margin Ttm:-7.9%

Net Margin Ttm:-8.0%

Ebitda Margin:-3.9%

TTM Performance (3)

Gross Margin Ttm:30.0%

Operating Margin Ttm:-7.9%

Net Margin Ttm:-8.0%

Yield Metrics (3)

Earnings Yield:-$31.88

Owner Earnings Yield:$8.12

Dividend Yield:0.0%

C. Log-Linear Regression Growth Trends

Earnings Surprise (SUE) (3)

Earnings Surprise (SUE):

+0.45

📊 Click to view full GO Earnings Surprise analysis →

EPS Surprise vs Expected:126.3%

Latest Earnings Filed:2026-08-12

Revenue Growth (Linear) (1)

Revenue Growth Rate (Linear):7.7%

Earnings Growth (Linear) (1)

Net Income Growth Rate (Linear):-31.3%

Cash Flow Growth (Linear) (2)

Free Cash Flow Growth Rate (Linear):7.6%

Operating Cash Flow Growth Rate (Linear):-7.3%

Operating Growth (Linear) (1)

Operating Income Growth Rate (Linear):-15.2%

D. Financial Stability

Liquidity Ratios (3)

Current Ratio:1.29x

Quick Ratio:1.29x

Cash Ratio:0.19x

Leverage Analysis (3)

Debt To Equity Ttm:1.76x

Debt-to-Equity Ratio:1.76x

Debt To Ebitda:-999.00x

Coverage Ratios (1)

Times Interest Earned:-999.00

Capital Structure (4)

Working Capital:116,072,000.00

Cash And Cash Equivalents:74,199,000.00

Long Term Debt:$490.60M

Net Debt:$900.15M

DIVISION II: FINANCIAL STATEMENTS ANALYSIS

A. Income Statement Analysis

Revenue Components (2)

Revenue TTM: $4.74B

Linear Growth: 7.7%

📊 Click to view full GO Revenue analysis & methodology →

Cost Of Revenue Ttm:$3.32B

Profitability Breakdown (2)

Gross profit TTM: $1.42B

Linear Growth: 6.7%

📊 Click to view full GO Gross Profit analysis & methodology →

Operating income TTM: -$374.22M

Linear Growth: -15.2%

📊 Click to view full GO Operating Income analysis & methodology →

Bottom Line Performance (3)

Net income TTM: -$381.25M

Linear Growth: -31.3%

📊 Click to view full GO Net Income analysis & methodology →

Income Before Tax:-$401.57M

Ebitda Ttm:-186,085,000.00

Operating Expenses (5)

Operating Expenses:0.00

R And D Expense:0.00

Sga Expense:1,350,992,000.00

Income Tax Expense:-$20.32M

Interest Expense:0.00

Expense Ratios (3)

R And D To Revenue Percentage:0.0%

Sga To Revenue Percentage:113.3%

Ebitda Margin:-3.9%

B. Balance Sheet Analysis

Asset Composition (5)

Total Assets:$2.99B

Current Assets:$514.54M

Ppe Net:773,386,000.00

Goodwill:475,835,000.00

Intangible Assets:$71.62M

Liability Structure (4)

Total Liabilities:2,177,872,000.00

Current Liabilities:398,470,000.00

Long Term Debt:$490.60M

Short Term Debt:$483.75M

Equity & Capital (3)

Equity:$816.59M

Retained Earnings:-$18.18M

Common Stock:500,000,000.00

Working Capital Items (3)

Accounts Receivable:11,865,000.00

Inventory:0.00

Accounts Payable:0.00

Special Items (2)

Contract Liabilities:3,500,000.00

Stock Based Compensation:3,768,000.00

C. Cash Flow Analysis

Operating Activities (2)

Operating cash flow TTM: $215.75M

Linear Growth: -7.3%

Free cash flow TTM: $25.12M

Linear Growth: 7.6%

📊 Click to view full GO Free Cash Flow analysis & methodology →

Investment Activities (2)

Investing Cash Flow:-$59.07M

Capital Expenditures Ttm:190,632,000.00

Financing Activities (3)

Financing Cash Flow:-$4.09M

Dividends Paid Ttm:6,000.00

Stock Repurchase:0.00

Capital Transactions (3)

Common Stock Issuance:0.00

Long Term Debt Issuance:$0.00

Long Term Debt Repayments:$0.00

Non-Cash Items (1)

Depreciation Amortization Ttm:188,132,000.00

DIVISION III: OPERATIONAL METRICS

A. Per Share Analysis

Earnings Per Share (3)

EPS (Basic TTM):-3.88

Eps diluted TTM: -$3.88

Linear Growth: -29.5%

📊 Click to view full GO EPS analysis & methodology →

Earnings Per Share Ttm:-$3.85

Revenue & Cash Per Share (3)

Sales Per Share Ttm:47.90

Operating Cash Flow Per Share:$2.24

Fcf Per Share Ttm:0.25

Book Value & Capital (2)

Book Value Per Share:$8.25

Cash Per Share:0.75

Dividend Policy (1)

Dividend Payout Ratio:-999.00x

B. Operational Efficiency

Asset Utilization (2)

Asset Turnover Ttm:1.53x

Working Capital Turnover Ttm:40.86x

Receivables Management (2)

Receivables Turnover Ttm:399.71x

Days Sales Outstanding Ttm:0.91

Inventory Management (2)

Inventory Turnover Ttm:-999.00x

Days Inventory Outstanding Ttm:-999.00

Payables & Cash Cycle (2)

Days Payable Outstanding:-999.00

Cash Conversion Cycle:0.91

C. Quality & Risk Metrics

Financial Quality Scores (2)

Financial Strength Score:40.00

Quality Score:35.00

Market Metrics (2)

Beta:0.00x

Volatility Category:unknown

DIVISION IV: INVESTMENT ANALYSIS

A. Value Investment Framework

Owner Earnings Analysis (3)

Owner earnings TTM: $97.90M

Linear Growth: -8.4%

📊 Click to view full GO Owner Earnings analysis & methodology →

Owner Earnings Per Share:$0.99

Owner Earnings Yield:$8.12

Growth Assessment (1)

Owner Earnings Growth Rate:-$8.38

Damodaran Growth Analysis (2)

Reinvestment Rate:-39.6%

Fundamental Growth Rate (g):5.3%

Intrinsic Value Models (1)

Intrinsic Value:

$783.09M

📊 Click to view full GO DCF valuation →

Margin of Safety (1)

Margin Of Safety:

-53.9%

📊 Click to view full GO valuation analysis →

Return Scenarios (2)

Theoretical 5-Year Return:

-15.9%

📊 Click to view full GO expected return analysis →

Forward Expected Return (Yield + Growth):

13.4%

📊 Click to view full GO expected return analysis →

Investment Assessment (1)

Buffett Assessment:Overvalued

B. Log-Linear Regression Growth Analysis

Growth Rates (Log-Linear Regression) (3)

Revenue Growth Rate (Linear):7.7%

Net Income Growth Rate (Linear):-31.3%

Operating Income Growth Rate (Linear):-15.2%

Cash Flow Growth Rates (2)

Free Cash Flow Growth Rate (Linear):7.6%

Operating Cash Flow Growth Rate (Linear):-7.3%

Other Growth Rates (3)

Gross Profit Growth Rate (Linear):6.7%

Book Value Growth Rate (Linear):-3.3%

Owner Earnings Growth Rate:-$8.38

C. Company Profile & Context

Corporate Information (6)

Symbol:GO

Company Name:Grocery Outlet Holding Corp.

Sector:Consumer Staples

Industry:Food Retail

Exchange:NASDAQ

Country:United States

Market Classification (3)

Market Cap Category:N/A

Price Category:medium

Volume Category:N/A

Share Structure (3)

Shares Outstanding:99.01M

Shares Outstanding Basic:99.01M

Shares Outstanding Diluted:99.77M

Data Processing Info (3)

Processing Version:v3.0

Last Updated:2026-09-01 07:46:45 UTC

Data Timestamp:2026-09-01T07:46:45.617829