PFGC Short Thesis – Trades at 109 times pre-tax earnings via /r/RobinHood

PFGC Short Thesis – Trades at 109 times pre-tax earnings

Trades at 109 times pre-tax earnings

Since 2018

Shares outstanding up 29.5%

Revenue is up 91%

Market cap up 202% from $3.34 billion to $6.76 billion while:

  • Operating margins down 57%
  • Pre-Tax margins down 84%
  • Pre-Tax income down 68%
  • Net income down 76.8%
  • Gross margins have shrunk from 13% to 11.4%
  • Net Margins have went from 1.13% to .14%

I don’t see how this company isn’t getting crushed by the supply chain issues and inflation.

Their razor thin margins give them little padding in terms of protection from cost increases.

Their delivery drivers are paid terribly and have been walking out in large numbers mid shift. They’ve had to raise minimum order size because of it.

Talking to restaurant owners I heard two things

1). Delivery has been spotty

2). They aren’t known as much for their quality as they are known for having the cheapest options (among restaurant owners).

I heard from several restaurant owners that over the summer they received two week old food from them

Submitted February 07, 2022 at 10:34PM by pjthejvbroker
via reddit