Fact based stock research
BJ's Wholesale Club Holdings (NYSE:BJ)

US05550J1016

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Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

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BJ's Wholesale Club Holdings stock research in summary

bjs.com

ANALYSIS: With an Obermatt Combined Rank of 9 (worse than 91% compared with investment alternatives), BJ's Wholesale Club Holdings (Hypermarkets, Super Centers, USA) shares have lower financial characteristics compared with similar stocks. Shares of BJ's Wholesale Club Holdings are low in value (priced high) with a consolidated Value Rank of 17 (worse than 83% of alternatives), and are riskily financed (Safety Rank of 45, which means above-average debt burdens) but show above-average growth (Growth Rank of 53). ...read more

RECOMMENDATION: A Combined Rank of 9, is a sell recommendation based on BJ's Wholesale Club Holdings's financial characteristics. As the company BJ's Wholesale Club Holdings shows low value with an Obermatt Value Rank of 17 (83% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 53% of comparable companies (Obermatt Growth Rank is 53). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 45 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for BJ's Wholesale Club Holdings, even a low-value company (in terms of its key financial indicators) can be a good investment. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	17
Growth Rank	53
Safety Rank	45
Combined Rank	9

Country	USA
Industry	Hypermarkets, Super Centers
Index	S&P US Food & Beverage, S&P MIDCAP
Size class	XX-Large

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: BJ's Wholesale Club Holdings

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	25	25	28	17
GROWTH
GROWTH	79	43	25	53
SAFETY
SAFETY	42	11	41	45
SENTIMENT
SENTIMENT	n/a	63	61	^new
360° VIEW
360° VIEW	n/a	15	21	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 2-Nov-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better BJ's Wholesale Club Holdings is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	25	25	28	17
GROWTH
GROWTH	79	43	25	53
SAFETY
SAFETY	42	11	41	45
COMBINED
COMBINED	45	1	6	9

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of BJ's Wholesale Club Holdings the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 17 (worse than 83% compared with alternatives), BJ's Wholesale Club Holdings shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for BJ's Wholesale Club Holdings. Price-to-Sales is 47 which means that the stock price compared with what market professionals expect for future profits is higher than 53% of comparable companies, indicating a low value concerning BJ's Wholesale Club Holdings's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 20, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of BJ's Wholesale Club Holdings. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 34 and Dividend Yield, which is lower than 99% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 17, is a sell recommendation based on BJ's Wholesale Club Holdings's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for BJ's Wholesale Club Holdings? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as BJ's Wholesale Club Holdings? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. BJ's Wholesale Club Holdings may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	76	70	62	47
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	60	45	58	34
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	4	11	22	20
DIVIDEND YIELD
DIVIDEND YIELD	1	1	1	1
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	25	25	28	17

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of BJ's Wholesale Club Holdings; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 53 (better than 53% compared with alternatives), BJ's Wholesale Club Holdings shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for BJ's Wholesale Club Holdings. Sales Growth has a rank of 68 which means that currently professionals expect the company to grow more than 68% of its competitors. Stock Returns are also above average with a rank of 77. But Capital Growth has only a rank of 26, which means that currently professionals expect the company to grow its invested capital less than 74% of its competitors. Profit Growth is also low, with a rank of only 47, which means that, currently, professionals expect the company to grow its profits below average. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 53, is a buy recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 77% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	65	57	32	68
PROFIT GROWTH
PROFIT GROWTH	n/a	29	34	47
CAPITAL GROWTH
CAPITAL GROWTH	n/a	16	36	26
STOCK RETURNS
STOCK RETURNS	90	83	51	77
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	79	43	25	53

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of BJ's Wholesale Club Holdings.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 45 (better than 45% compared with alternatives), the company BJ's Wholesale Club Holdings has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of BJ's Wholesale Club Holdings is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for BJ's Wholesale Club Holdings. Leverage is at a rank of 52, meaning the company has a below-average debt-to-equity ratio. It has less debt than 52% of its competitors. Liquidity is also good at a rank of 74, meaning the company generates more profit to service its debt than 74% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 13, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 87% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 45 (worse than 55% compared with alternatives), BJ's Wholesale Club Holdings has a financing structure that is riskier than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for BJ's Wholesale Club Holdings. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. Investors may have a short-term debt challenge with BJ's Wholesale Club Holdings and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	46	18	43	52
REFINANCING
REFINANCING	42	5	15	13
LIQUIDITY
LIQUIDITY	49	65	78	74
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	42	11	41	45

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of BJ's Wholesale Club Holdings and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	46	61	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	64	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	27	74	^new
MARKET PULSE
MARKET PULSE	n/a	78	46	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	63	61	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for BJ's Wholesale Club Holdings.
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