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Category: Stock Market and BJ's Wholesale Club
Date: 23 August 2020 BJ Wholesale Stock Price: $46.08 We take a look at the 2nd quarter earnings release of their 2020 fiscal year of BJ's Wholesale Club the discount grocery store retailer. The group's revenue surged as people stocked up their pantries due to stay at home orders and lockdowns across the United States.
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Our top priority remains the health and safety of our members and team members during this challenging time and I am deeply thankful for the contributions of our dedicated team members this past quarter said Lee Delaney, President and Chief Executive Officer"
About BJ's Wholesale Club
BJ’s Wholesale Club is a leading warehouse club operator on the East Coast of the United States. We deliver significant value to our members, consistently offering 25% or more savings on a representative basket of manufacturer-branded groceries compared to traditional supermarket competitors. We provide a curated assortment focused on perishable products, continuously refreshed general merchandise, gas and other ancillary services to deliver a differentiated shopping experience that is further enhanced by our omnichannel capabilities.
Overview of BJ's Wholesale Club's 2nd quarter 2020 earnings report
The numbers we are interested in (for the quarter):
- Total revenue: $3.797 billion (up from $3.143 billion from the same quarter of the previous year)
- Revenues increased by 20.8% over the last 12 months
- Cost of Sales: $3.060 billion (down from $2.568 billion for the same quarter of the previous year)
- Cost of revenues increased by 19.1% over the last 12 months
- Some margin gain for BJ's wholesale as the surge in revenues outpaced the growth in their cost of sales.
- Net income: $55.092 million (up from $54.431 million loss for the same quarter of the previous year)
- Diluted earnings per share: $0.69 (up from $0.25 for the same quarter of the previous year)
- Diluted weighted-average shares outstanding: 138.428 million (down from 140.463 million for the same quarter of the previous year)
- Cash and cash equivalents: $132.915 million
- Cash and cash equivalents per share: $0.96
- Cash and cash equivalents makes up 0.9% of BJ's Wholesale Club's market capital
- Cash and cash equivalents makes up 2.49% of BJ's Wholesale Club's total assets
- Receivables: $193.884 million
- Receivables makes up 3.6% of BJ's Wholesale Club's total assets
- Inventories: $1.024 billion
- Inventories makes up 19.2% of BJ's Wholesale Club's total assets
- Cash generated from operations for 3 months: $469.902 million
- Cash generated from operations per share for 3 months: $3.39
BJ's Wholesale Club's management commentary on their 2nd quarter 2020 earnings
BJ's Wholesale Club (NYSE:BJ) stock price history
The image below, obtained from Google shows the stock price history of BJ's Wholesale Club (NYSE: BJ) since its listing in June 2018. At its listing/IPO it was trading at around $22.00 a stock and its currently trading at $35.25 about 2 years later. That's a 46.5% return provided by BJ's Wholesale Club since its listing date. The stock is also trading at a lot closer to its 52 week high of $35.45 than it is to its 52 week low of $18.84which to us is an indication that short term sentiment and momentum of BJ's Wholesale Club stock is very positive right now
BJ's Wholesale (NYSE: BJ) stock price history since its listing
BJ's Wholesale Club (BJ) stock vs Costco Wholesale Corp (COST) stock
The image below shows the stock price performance of BJ's Wholesale (BJ) and Costco Wholesale (Cost) since the listing of BJ's wholesale in middle of 2018. As the image shows the trends and levels of the stocks performance has been very different over the period in question, and for the most part Costco outperformed that of BJ's wholesale, however the almost 10% surge in the stock of BJ's wholesale on the 21 May 2020 has pushed the returns provided by BJ's over the period looked at past that of Costco.
BJ's Wholesale Club (NYSE: BJ) stock vs Costco Wholesale Corp (NASDAQ: COST) stock
Recent coverage BJ's Wholesale Club
The extract below touched on BJ's Wholesale the day it released its latest earnings results, as obtained from FFool.com
Read the full article here
Read the full article here
BJ's Wholesale Club (NYSE: BJ) latest stock valuation
So based on the earnings report of BJ's Wholesale Club (NYSE: BJ) and what do we value BJ's Wholesale Club (BJ) stock at? Based on the earnings reported and the fiscal guidance provided by the group our valuation model provides a target (full value) price for BJ's Wholesale Club at $32.50 a stock (up significantly from our 3rd quarter 2019 earnings report valuation of BJs).
We therefore believe the stock of BJ's Wholesale Club is slightly overvalued.
We usually recommend long term fundamental or value investors buy into a stock at least 10% below our target (full value) price which in this case is $32.50. A good entry point into BJ's would therefore be at $29.30 or below. We expect the stock of BJ's to pull back after its strong run to levels closer to our target price in coming weeks and months.
We therefore believe the stock of BJ's Wholesale Club is slightly overvalued.
We usually recommend long term fundamental or value investors buy into a stock at least 10% below our target (full value) price which in this case is $32.50. A good entry point into BJ's would therefore be at $29.30 or below. We expect the stock of BJ's to pull back after its strong run to levels closer to our target price in coming weeks and months.
Next earnings release of BJ's Wholesale Club
It is expected that BJ's Wholesale Club will release its 3rd quarter 2020 earnings towards the end of November 2020