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What this page is: Delvantic's full research page for Tractor Supply Company (TSCO) — AI-driven forensic equity research: mechanical valuation models (DCF, EPV, anchored-PE, scenario) plus three independent AI lenses (Quality / Value / Sentiment). Everything below is rendered server-side; you are not missing content that requires JavaScript. All scores are predictions and research opinions, not financial advice.
Our current read (analysis of 2026-08-09): Designation Watch · Cairn score -3 (−100…+100 Quality+Value blend) · Quality 49 · Value -46 · Sentiment -52 (timing only, not weighted) · Composite fair value $28.84 vs $30.77 at analysis
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Tractor Supply Company is a specialty retail company focused on the rural lifestyle market in the United States. The company operates a large network of Tractor Supply stores and Petsense by Tractor Supply locations, serving recreational farmers, ranchers, pet owners, homeowners, and landowners primarily in rural and semi-rural communities. Its product assortment spans livestock, equine and agricultural supplies, companion animal food and care, seasonal and recreational merchandise, hardware, tools, workwear, and home and garden products. Tractor Supply Company positions itself as a one-stop destination for lifestyle needs related to land, animals, and outdoor living, emphasizing convenient store formats, extensive assortments, and knowledge-based customer service. Headquartered in Brentwood, Tennessee, it plays a significant role in the U.S. consumer cyclical and specialty retail sectors by catering to a customer base that is less served by traditional urban-focused retailers and by addressing everyday needs of rural households, small farms, and hobby operations.
Earnings Schedule
Checked daily · calendar updated Aug 9| Print date | EPS est. | EPS actual | Revenue est. | Revenue actual |
|---|---|---|---|---|
| Jul 23, 2026 | $0.82 | $0.69 -15.9% | — | — |
| Jun 26, 2026 | $-0.12 | $0.05 +141.7% | — | — |
| Apr 16, 2026 | $1.15 | $1.15 +0.0% | — | — |
Green = beat the estimate, red = missed. An earnings print is the fastest way a thesis changes — our designations should be re-read after each one.
Recent SEC Filings
| Filed | Form | Document |
|---|---|---|
| Aug 7, 2026 | 4 | View |
| Aug 7, 2026 | 4 | View |
| Aug 7, 2026 | 3 | View |
| Aug 7, 2026 | 4 | View |
| Aug 7, 2026 | 4 | View |
| Aug 7, 2026 | 8-K | View |
| Aug 6, 2026 | 10-Q | View |
| Aug 6, 2026 | 8-K | View |
| Aug 5, 2026 | 144 | View |
| Aug 5, 2026 | 4 | View |
| Aug 5, 2026 | 4 | View |
| Aug 4, 2026 | 4 | View |
Filings link to the SEC’s EDGAR system. Annual/quarterly reports (10-K, 10-Q, 20-F) carry the full story; 8-K/6-K current reports are the fastest signal that something material happened.
Price Overview
Price History (1 Year)
Revenue & Net Income Trend
| Period | Revenue | Net Income | Net Margin | YoY/QoQ |
|---|
Key Metrics
EPS (Diluted): 2.06
Total Equity: $2.58B
Shares: 532,178,000
Total Debt: $1.76B
Cash: $194.11M
EBITDA: $1.96B
Total Debt: $1.76B
Cash: $194.11M
Revenue: $15.52B
Revenue: $15.52B
Revenue: $15.52B
Total Equity: $2.58B
Tax Rate: 21.6%
Equity: $2.58B
Total Debt: $1.76B
Cash: $194.11M
Current Liabilities: $2.61B
Long-Term Debt: $1.76B
Total Debt: $1.76B
Total Equity: $2.58B
Shares: 532,178,000
Shares: 532,178,000
CapEx: -$894.77M
Shares: 532,178,000
Stock Price: $30.77
Net Income: $1.10B
Industry Benchmarks
Income Statement (Annual)
Last updated: Aug 2, 2026 2:07pm (6d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $12.7B | $14.2B | $14.6B | $14.9B | $15.5B |
| Cost of Revenue | $8.3B | $9.2B | $9.3B | $9.5B | $9.9B |
| Gross Profit | $4.5B | $5.0B | $5.2B | $5.4B | $5.7B |
| Operating Expenses | $2.9B | $3.2B | $3.4B | $3.5B | $3.7B |
| Operating Income | $1.3B | $1.4B | $1.5B | $1.5B | $1.5B |
| Net Income | $997.1M | $1.1B | $1.1B | $1.1B | $1.1B |
| EBITDA | $1.6B | $1.8B | $1.9B | $1.9B | $2.0B |
| EPS | $8.69 | $9.78 | $10.15 | $2.05 | $2.07 |
| EPS (Diluted) | $8.61 | $9.71 | $10.09 | $2.04 | $2.06 |
Balance Sheet (Annual)
Last updated: Aug 2, 2026 1:41pm (6d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Cash & Equivalents | $878.0M | $202.5M | $397.1M | $251.5M | $194.1M |
| Total Current Assets | $3.3B | $3.2B | $3.3B | $3.3B | $3.5B |
| Total Assets | $7.8B | $8.5B | $9.2B | $9.8B | $10.9B |
| Current Liabilities | $2.1B | $2.4B | $2.2B | $2.3B | $2.6B |
| Long-Term Debt | $986.4M | $1.2B | $1.7B | $1.8B | $1.8B |
| Total Liabilities | $5.8B | $6.4B | $7.0B | $7.5B | $8.4B |
| Total Equity | $2.0B | $2.0B | $2.1B | $2.3B | $2.6B |
| Retained Earnings | $4.9B | $5.6B | $6.3B | $6.9B | $7.5B |
Cash Flow (Annual)
Last updated: Aug 2, 2026 2:07pm (6d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Operating Cash Flow | $1.1B | $1.4B | $1.3B | $1.4B | $1.6B |
| Capital Expenditure | -$628.4M | -$773.4M | -$753.9M | -$784.0M | -$894.8M |
| Free Cash Flow | $510.3M | $583.6M | $580.2M | $636.8M | $740.5M |
| Acquisitions (net) | $0 | -$390.8M | $0 | $0 | -$139.9M |
| Net Debt Issued / (Repaid) | — | — | — | — | — |
| Dividends Paid | -$239.0M | -$409.6M | -$449.6M | -$472.5M | -$487.7M |
| Stock Buybacks | -$798.9M | -$700.1M | -$594.4M | -$560.6M | -$361.3M |
| Net Change in Cash | -$463.7M | -$675.5M | $194.6M | -$145.6M | -$57.4M |
Growth Trends (YoY %)
Last updated: Aug 2, 2026 2:07pm (6d ago)| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue Growth | +11.6% | +2.5% | +2.2% | +4.3% |
| Gross Profit Growth | +11.1% | +5.1% | +3.2% | +4.8% |
| Operating Income Growth | +9.8% | +3.1% | -0.8% | 0.0% |
| Net Income Growth | +9.2% | +1.7% | -0.5% | -0.5% |
| EBITDA Growth | +12.8% | +5.3% | +2.3% | +2.4% |
Dividend History (Last 20)
Last updated: Aug 2, 2026 1:41pm (6d ago)| Date | Dividend | Declaration | Record | Payment |
|---|---|---|---|---|
| 2026-05-27 | $0.24 | — | — | — |
| 2026-02-24 | $0.24 | — | — | — |
| 2025-11-24 | $0.23 | — | — | — |
| 2025-08-25 | $0.23 | — | — | — |
| 2025-05-28 | $0.23 | — | — | — |
| 2025-02-26 | $0.23 | — | — | — |
| 2024-11-25 | $0.22 | — | — | — |
| 2024-08-26 | $0.22 | — | — | — |
| 2024-05-24 | $0.22 | — | — | — |
| 2024-02-23 | $0.22 | — | — | — |
| 2023-11-24 | $0.21 | — | — | — |
| 2023-08-25 | $0.21 | — | — | — |
| 2023-05-26 | $0.21 | — | — | — |
| 2023-02-24 | $0.21 | — | — | — |
| 2022-11-18 | $0.18 | — | — | — |
| 2022-08-19 | $0.18 | — | — | — |
| 2022-05-24 | $0.18 | — | — | — |
| 2022-02-17 | $0.18 | — | — | — |
| 2021-11-19 | $0.10 | — | — | — |
| 2021-08-20 | $0.10 | — | — | — |
Insider Trading (Recent)
Last updated: Aug 2, 2026 1:55pm (6d ago)All SEC Form 4 codes
- P Purchase
- Open-market or private purchase of shares.
- S Sale
- Open-market or private sale of shares.
- A Award / grant
- Grant or award of securities (RSUs, options, etc.) under Rule 16b-3.
- D Return to issuer
- Securities disposed back to the company under Rule 16b-3.
- F In-kind (tax)
- Shares withheld or delivered to pay the option-exercise price or tax — not an open-market sale.
- I Discretionary
- Discretionary transaction under an employee plan — Rule 16b-3(f).
- M Option exercise
- Exercise or conversion of a derivative (option/RSU) into shares — exempt.
- C Conversion
- Conversion of a derivative security into the underlying shares.
- E Short expiration
- Expiration of a short derivative position.
- H Long expiration
- Expiration or cancellation of a long derivative position with value received.
- O OTM exercise
- Exercise of an out-of-the-money derivative.
- X ITM exercise
- Exercise of an in-the-money or at-the-money derivative.
- G Gift
- Bona fide gift of securities.
- L Small acquisition
- Small acquisition under Rule 16a-6.
- W Inheritance
- Acquisition or disposition by will or the laws of descent.
- Z Voting trust
- Deposit into or withdrawal from a voting trust.
- J Other
- Other acquisition or disposition (explained in a Form 4 footnote).
- K Equity swap
- Transaction in an equity swap or similar instrument.
- U Tender / buyout
- Disposition via tender of shares in a change-of-control transaction.
Compensation-plan codes (A, D, F, M) are routine and rarely directional. Open-market P (buy) and S (sale) carry the most signal.
| Date | Insider | Type | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-08-03 | Hawaux Andre J | P-Purchase | 3,150.00 | $31.83 | $100,265 |
| 2026-07-01 | Krishnan Ramkumar | A-Award | 830.43 | $0.00 | $0 |
| 2026-07-01 | Ham Margaret M | A-Award | 415.22 | $0.00 | $0 |
| 2026-06-08 | Ham Margaret M | L-SmallAcquisition | 97.84 | $30.17 | $2,952 |
| 2026-05-14 | Jackson Denise L | A-Award | 5,712.00 | $0.00 | $0 |
| 2026-05-14 | MORRIS EDNA | A-Award | 9,174.00 | $0.00 | $0 |
| 2026-05-14 | Syngal Sonia | A-Award | 5,712.00 | $0.00 | $0 |
| 2026-05-14 | Krishnan Ramkumar | A-Award | 5,712.00 | $0.00 | $0 |
| 2026-05-14 | Hawaux Andre J | A-Award | 5,712.00 | $0.00 | $0 |
| 2026-05-14 | Ham Margaret M | A-Award | 5,712.00 | $0.00 | $0 |
| 2026-05-14 | Cardenas Ricardo | A-Award | 5,712.00 | $0.00 | $0 |
| 2026-05-14 | Weikel Mark J | A-Award | 5,712.00 | $0.00 | $0 |
| 2026-05-14 | Brown Joy | A-Award | 5,712.00 | $0.00 | $0 |
| 2026-04-01 | Krishnan Ramkumar | A-Award | 579.47 | $45.30 | $26,250 |
| 2026-04-01 | Ham Margaret M | A-Award | 289.74 | $45.30 | $13,125 |
| 2026-02-13 | Yankee Colin | M-OptionExercise | 5,475.00 | $0.00 | $0 |
| 2026-02-13 | Yankee Colin | M-OptionExercise | 5,695.00 | $0.00 | $0 |
| 2026-02-13 | Yankee Colin | S-Sale | 4,694.00 | $55.37 | $259,907 |
| 2026-02-13 | Yankee Colin | S-Sale | 781.00 | $55.38 | $43,252 |
| 2026-02-13 | Yankee Colin | S-Sale | 5,695.00 | $55.33 | $315,104 |
Deep Analysis
Pre-flight intelligence scans the company first, then routes to the right analytical methods.
Narrative Economics
market-narrative step).
Claude Reading
The raw quarterly tape is more troubling than the "fair value" synthesis lets on. Q1 2026 revenue of $3.59B is up just 3.5% YoY from $3.47B, but net income of $164.5M collapsed 8.3% from $179.4M — margin fell to 4.6% from 5.2%. Even more damaging: Q3 2025 net income of $259.3M was down 6.7% YoY on 7.2% higher revenue, and Q4 2025 NI of $227.4M was down 3.8% on 3.4% revenue growth. This is a five-quarter sequence of operating deleverage — comps growing modestly while net margin compresses at every seasonal comparison. The 2025 full year printed $15.52B revenue and $1.10B NI, essentially flat with 2023's $14.56B/$1.11B — meaning two full years of zero earnings growth on 6.6% cumulative revenue growth. That's not a "steady compounder," that's a business absorbing cost inflation it cannot pass through.
The balance sheet and returns dress this up nicely and I think that's what's fooling the models. ROE of 42% and ROIC of 27.7% look elite, but only $2.58B of equity against $1.76B debt and aggressive buybacks are doing the heavy lifting — this is financially engineered ROE, not operational excellence. FCF of $740M against $894M capex tells you they're still spending to grow a footprint that isn't producing incremental earnings. The 13% FCF CAGR flagged in momentum is suspect given capex is running near operating cash flow; a single working capital swing explains most of that. Meanwhile the dividend costs ~$490M/year (44% payout) and buybacks eat the rest — there's no margin for a bad year, and Q1 2026's margin trajectory suggests a bad year is starting.
Where I part ways with the prior models: the synthesis says "fair value $28.95 vs $30.77" and Market Forces calls it a value trap but neutral. Both are too generous. On trailing $1.10B NI the P/E is 14.7x, but on annualized run-rate using the last four quarters ($164.5+$227.4+$259.3+$430.0 = $1.08B) it's 14.9x — and if Q1 2026's 4.6% margin persists through 2026, NI drops toward $950M-$1.0B, pushing forward P/E to 16-17x for a business with declining earnings and negative operating leverage. That is not "fair" for a mature retailer in a "macro headwinds" environment. The narrative layer is correctly identifying that there's no story premium, but it's missing that there's arguably a structural discount coming. A contrarian bull would say: 51% drawdown from $62.89 already prices this in, rural real estate/remote-work tailwind is real, and any margin normalization to 7% net (mid-cycle) throws off $1.3B NI and a $40+ stock. That's the only clean bull case and it requires believing Q1 2026 is a trough, not a trend.
The insider data is useless — all A-Awards (grants), no open-market buys or sells, and the dates read "2026-07-01" which is either stale timestamping or forward-dated comp grants; either way, no signal. I'd flag the anomaly that Q2 numbers ($4.44B/$430M) dwarf other quarters — this is heavy seasonal skew toward spring lawn/garden, which means the full-year 2026 print hinges disproportionately on Q2 2026 which we don't have. That's the pivotal data point, not Q1. My verdict: I dissent modestly from "fair value" toward mildly overvalued. Composite DCF at $28.84 is probably right on trailing numbers but doesn't reflect the earnings trajectory; fair value on forward margin compression is closer to $25-27. However, the drawdown is severe enough and the franchise durable enough that I won't call this a short — it's a pass, revisit after Q2 2026 to see if the margin bleed continues or if lawn/garden season stabilizes the trend. If Q2 2026 NI comes in below $400M (vs. $430M and $425M prior two years), the thesis breaks and $25 is the next stop.
GPT Reading
What stands out is how little economic progress Tractor Supply has made despite continuing to add revenue. Sales rose from $14.88 billion in 2024 to $15.52 billion in 2025, up 4.3%, but operating income was flat at $1.47 billion and net income was essentially unchanged at $1.10 billion. Stretch that further back and the picture is even clearer: revenue is up 22% since 2021, while net income has gone from $997 million to just $1.10 billion, about 10% growth over four years. That is not a broken business, but it is a mature one whose incremental sales are coming at sharply lower incremental margins. Gross margin improved to 36.4% in 2025 from 35.2% in 2021, so the problem is not merchandise economics; it is cost absorption. SG&A and growth spending are eating the benefit. The quarterly cadence reinforces that this is a seasonal retailer with a real earnings engine in the June quarter, but even there, the engine is not revving higher: Q2 net income was $430 million in 2025 versus $425 million in 2024 on revenue of $4.44 billion versus $4.25 billion. More sales, same profit.
That matters because the stock is not priced like a melting-ice-cube retailer. At 14.9x earnings, 9.0x EV/EBITDA, and 1.05x sales, TSCO sits in the zone of “respectable, durable, low-growth compounder.” For that to work, I want either visible earnings growth or obvious free-cash-flow support. Earnings growth is absent. Free cash flow at $740.5 million is decent, but it comes after a very heavy $894.8 million of capex against $1.64 billion of operating cash flow. On the current market cap, that is roughly a 4.6% FCF yield, acceptable but not compelling for a retailer whose earnings have been flat for three straight years. The balance sheet is fine rather than pristine: $1.76 billion of debt against just $194 million of cash and $2.58 billion of equity. ROE of 42.5% looks spectacular, but with a high multiple on book value at 6.3x and a retailer capital structure, that figure flatters the story more than it informs it. ROIC at 27.7% is the better number and does confirm this is a high-quality operator; the issue is that quality is already recognized.
The raw quarterly data also argue against the harsher “deteriorating retailer” framing. Revenue is still growing each quarter year over year: $3.59 billion versus $3.47 billion in the latest March quarter, $3.90 billion versus $3.77 billion in the December quarter, $3.72 billion versus $3.47 billion in September, and $4.44 billion versus $4.25 billion in June. Net margin has compressed in some quarters, but not catastrophically: 2025 margins by quarter were 5.2%, 9.7%, 7.0%, and 5.8% versus 2024’s 5.2%, 10.0%, 7.0%, and 6.3%. This is a business giving back maybe 50 basis points of annual net margin, not imploding. That is why I do not see a deep-value setup despite the 51% drawdown from the high. The business has not worsened enough to deserve panic, but it also has not improved enough to justify paying up simply because the chart is down. A fairer framing is that the stock has moved from expensive to roughly fair for a high-return retailer with a slowing earnings algorithm.
The best argument against my cautious read is straightforward: a 14.9x P/E for a company producing $1.64 billion of operating cash flow, 36% gross margins, 27.7% ROIC, and consistent positive same-direction revenue growth is not demanding. If margins merely stabilize around current levels, even modest store growth and buybacks could restart EPS growth, and then $30.77 would look cheap in hindsight. The dividend yield of 3.0% with a 44.5% payout ratio gives investors paid patience, and the valuation is nowhere near the premium usually attached to high-quality specialty retail. I take that seriously. But my pushback is that this argument relies on stabilization after several years in which revenue gains have not translated into profit gains. When a retailer is spending nearly $900 million a year on capex yet producing no real earnings lift, the burden of proof shifts to management. Cheap on quality is not enough if the earnings base is static.
What would change my mind is evidence that the company can convert low-single-digit sales growth back into mid-single-digit earnings growth. Concretely, I would want to see annual operating income break above the $1.47-$1.48 billion ceiling, ideally to at least $1.55 billion, while free cash flow moves back above $900 million without cutting growth investment. On a quarterly basis, I would watch whether the high-profit June quarter can get meaningfully above $430 million of net income and whether the December quarter can recover margin toward 6.3% from 5.8%. If that happens, the current multiple is too low. If instead 2026 delivers another year of roughly $15.8-$16.0 billion in revenue with net income stuck near $1.1 billion, then even $30.77 is a full price for stagnation.
Grok Reading
The numbers tell a story of a high-return franchise that has stopped compounding earnings. Tractor Supply grew revenue from $12.73B in 2021 to $15.52B in 2025, a 3.3% CAGR that has decelerated into the low-single digits, yet net income has gone nowhere—$997M to $1.10B to $1.11B to $1.10B to $1.10B. Operating income is literally stuck at $1.47–1.48B for three straight years. The latest quarter (March 2026) is worse on the margin line: revenue $3.59B versus $3.47B a year earlier, but net income $164.5M versus $179.4M and margin compressed from 5.2% to 4.6%. Gross margin holds near 36%, so the leakage is in opex and mix. What the market has correctly punished is the death of operating leverage; what it may have over-punished is the durability of the cash engine underneath. Free cash flow still printed $740.5M on $1.64B of operating cash flow after $895M of capex, FCF CAGR is a respectable 13%, ROIC sits at 27.7%, and ROE at 42.5%. Those are elite capital-return metrics for a specialty retailer, not a broken one. At $30.77 the stock trades 14.9x earnings, 9.0x EV/EBITDA, 1.05x sales, and yields 3.05% with a 44% payout—valuation that already embeds the low-growth reality after a 51% drawdown from the $62.89 peak.
The prior models call this fair value near $29 and flag value-trap risk. I weigh the data differently. A business that still converts mid-single-digit top-line growth into mid-teens FCF growth while earning nearly 28% ROIC is not “deteriorating” in the classic retail sense; it is mature and absorbing wage, freight, and store-build inflation without losing its unit economics. Debt of $1.76B against $194M cash and $2.58B equity (D/E 0.68) is manageable given the cash generation, and the current ratio of 1.34 is adequate. Insider activity is pure awards—no signal either way. The market thesis that store expansion is saturating and e-commerce is eroding the rural moat is plausible but not yet visible in the revenue line, which is still growing 4%+ annually. The composite fair-value print of $28.95 sits only 6% below the current price; that is noise, not a verdict, especially when methods disagree.
The strongest case against my read is straightforward and quantitative: earnings power has been flat for four years while the company continues to spend nearly $900M a year on capex that is no longer producing incremental operating profit. If that pattern persists—revenue +3–4%, NI stuck at $1.1B—then 15x earnings and 9x EBITDA are not cheap, they are exactly right for a no-growth retailer, and any multiple expansion requires a re-acceleration that management has not delivered. Same-store sales weakness and sequential margin compression in the most recent quarter support the bear narrative that discretionary rural spend is softer than the “essential infrastructure” story claims. A smart opponent would also note that P/B of 6.3x is rich if ROE mean-reverts from 42% as leverage and buybacks slow. I discount this because the FCF yield near 4.6%, the dividend coverage, and the still-expanding store economics give a tangible floor the bears underweight; the stock already corrected for the growth miss.
What flips me is simple: two more quarters of sub-3% revenue growth paired with operating margin below 9%, or a cut in the dividend/payout trajectory, would confirm structural erosion and push me firmly to overvalued. Conversely, a return to mid-single-digit comps with operating income breaking above $1.55B would re-rate the multiple and make the current price a clear entry.
Big-3 Panel — where each AI stands
Advanced Analysis Forensic deep-dive · three lenses
Tractor Supply is a mature specialty retailer executing consistently: revenue grew from $12.73B (2021) to $15.52B (2025), a ~5% CAGR, with gross margin expanding steadily from 35.2% to 36.4%. FCF stepped up to $740.5M in 2025 (from $510M in 2021), OCF/NI of 1.28x and accruals of -3.1% of assets confirm earnings are backed by cash. Altman Z of 4.08 puts it firmly in the safe zone, and no mechanical earnings-quality flags trip. Capital return is disciplined: diluted shares shrank from 579.1M to 532.2M (-2.1% CAGR), buybacks are 1142% of SBC, and SBC is a trivial 0.4% of revenue - genuine per-share concentration, not optical shrinkage. The blemish is operating margin: 10.3% (2021) to 9.5% (2025), and net income has been flat at ~$1.10B for three straight years despite $960M of revenue growth. That is real operating deleverage - cost growth is outpacing the top line, and it is the single thing separating this from a top-tier quality read. Balance sheet carries net debt of $1.57B against just $194M cash, so liquidity is a constraint rather than a cushion, though $740M annual FCF services it comfortably. Insider tape is entirely awards and tax withholding - no open-market buys or sales, so no directional signal.
Verify before trusting this (5)
- Root cause of the 80bps operating margin decline - is it wage/freight inflation, mix, or new-store drag?
- Debt maturity ladder and covenant terms behind the $1.57B net debt position
- Same-store sales vs new-store contribution to the 5% revenue growth
- Whether the flat net income reflects reinvestment (Project Fusion, Petsense) or genuine competitive pressure
- Lease obligation profile given specialty retail footprint
The three valuation methods converge in a tight band: DCF at $24.33, EPV floor at $27.39, and an anchored PE at $39.30, blending to $28.84 (signal-adjusted $28.95). Price of $30.77 sits about 6% above the composite and 26% above the EPV floor, so the market is already paying for the steady-compounder narrative and then some. There is no visible margin of safety here. The anchored PE is the only method pointing to upside, and it depends on TSCO earning back a premium multiple despite three years of flat net income and quietly eroding operating margin - that is a stretch, not a layup. Strip it out and the DCF/EPV pair say deserved value is more like $25-27. Quality is real (score 49, clean cash conversion, disciplined buybacks), which justifies pricing near composite fair value rather than at the EPV floor - but quality alone does not make a stock cheap, and the price is already reflecting it. This is the textbook case of a good business the market understands. Fairly valued, leaning slightly rich.
Verify before trusting this (4)
- Operating margin trajectory in next quarter - stabilization vs continued erosion changes the DCF materially
- Same-store sales cadence and mix between consumable/usable/edible vs discretionary
- Guidance on capex and new store productivity - EPV assumes maintenance mode
- Buyback pace at current price - management signaling on whether $30+ is attractive to them
TSCO walks into a neutral tape with a freshly damaged narrative. Q2 missed on revenue and profit, management flagged pronounced weakness in discretionary and big-ticket, and Zacks explicitly named it Bear of the Day with a Rank 5 Strong Sell after earnings estimates were cut again. For a low-intensity, steady-compounder story with no cult following, an analyst downgrade cycle IS the pressure - there is no true-believer base to absorb it, so estimate cuts flow straight into de-rating risk.
Verify before trusting this (4)
- Whether sell-side estimate revisions stabilize over the next 4-6 weeks or keep drifting lower
- Any upgrade or removal of the Zacks Rank 5 tag
- Same-store sales commentary at peer specialty retailers to test if the weakness is company- or category-specific
- Signs of rotation back into defensive consumer names if the tape turns risk-off
Character & Durability Scorecard
Survivability 8/10
Fortress financial profile with continuous positive FCF generation through recent economic shocks and a very safe Altman Z-score, though net debt position creates some constraint.
- Altman Z-score 4.08 (safe zone, low bankruptcy risk)
- Generated positive FCF through 2020-2025 period including pandemic, with steady $510M-$740M range
Adaptability 7/10
Demonstrated ability to broaden customer base beyond core agricultural customers and adapt distribution model, though not a radical business-model reinvention.
- Successfully expanded from pure farm/ranch to lifestyle/hobby customer base over past decade
- Built out omnichannel capabilities and loyalty program (Neighbor's Club) to complement rural store network
Moat Trajectory 7/10
Stable to modestly widening moat from specialized rural positioning and expanding margins, though not immune to e-commerce pressure or big-box encroachment.
- Gross margin expanded from 35.0% to 36.4% over 2021-2025, indicating some pricing power gains
- Unique rural store footprint with limited direct competition in small markets creates locational advantages
Capital Allocation 8/10
Excellent capital discipline with aggressive net share reduction and restrained equity compensation, though M&A track record not evident in recent data.
- Share count reduced from 579M to 532M (8% reduction) over 2021-2025 period
- Buyback/SBC ratio of 1142% shows disciplined return of capital, spending 11x more on buybacks than dilution
Pricing Power 7/10
Demonstrated pricing power with margin expansion through recent inflation, though operating margin compression from 10.1% to 9.5% shows some cost pressure.
- Gross margin expanded from 35.0% in 2022 to 36.4% in 2025 despite inflationary period
- Revenue grew from $14.20B to $15.52B (9%) while margins held or expanded
Management Alignment 6/10
Disciplined compensation structure evident but lack of insider transaction data prevents assessment of ownership alignment and conviction.
- SBC only 0.4% of revenue shows restrained equity compensation
- No insider transaction data available to assess ownership levels or buying/selling patterns
Demand Durability 7/10
Moderate secular tailwind from rural lifestyle trends and resilient animal care spending, though some exposure to agricultural commodity cycles and discretionary spending.
- Rural lifestyle and hobby farming trends show long-term growth as urbanites seek country living
- Pet care, livestock, and outdoor recreation markets have durable, non-cyclical components
Growth Consistency 7/10
Solid, steady revenue and FCF growth trajectory over four years with low volatility and no declines, demonstrating reliable compounding execution.
- Revenue grew every year from $12.73B to $15.52B (22% cumulative) with no down years
- FCF grew from $510M to $740M with only minor dip in 2023, showing steady cash generation
Optionality / Runway 6/10
Moderate runway from store expansion in rural markets and ancillary services, but overall TAM is bounded by rural population size and share-of-wallet limits.
- Whitespace opportunity in underserved rural markets for new store expansion remains
- Private label and services (vet clinics, pet wash) offer margin expansion and differentiation levers
Concentration / Key-Person Risk 8/10
Well-diversified across products, store locations, and customer base with professional management team, though some regional/rural demographic concentration exists.
- Highly diversified product mix across livestock, pet, lawn/garden, tools, seasonal categories
- No single customer concentration risk given retail model with fragmented customer base across 2000+ stores