Is Grocery Outlet Holding (GO) Pricing Reflect A Reset After Multi‑Year Share Price Slump

Simply Wall St

Wed, February 11, 2026 at 5:16 PM GMT+9 5 min read

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GO

-2.83%

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If you are wondering whether Grocery Outlet Holding's share price around US$9.94 reflects a bargain or a value trap, this article will walk through what the current valuation actually suggests.

The stock has recently shown mixed performance, with a 5.6% gain over the last 7 days and 4.1% over the past month, set against a 2.3% year to date decline and a 41.2% fall over the last year, and a 66.1% and 76.4% decline over the past 3 and 5 years respectively.

Recent coverage around Grocery Outlet has focused on its position in discount grocery retail and how investors are reacting to that story, which helps frame the recent share price moves. This context is important when you are weighing whether the long term share price record reflects changing expectations or a reset in how the market views the business.

Right now, Grocery Outlet Holding scores 3 out of 6 on our valuation checks, suggesting some metrics point to undervaluation while others do not. Next we will compare different valuation approaches before finishing with a way to assess value that goes beyond the usual ratios.

Find out why Grocery Outlet Holding’s -41.2% return over the last year is lagging behind its peers.

Approach 1: Grocery Outlet Holding Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model takes projected future cash flows and discounts them back to today, aiming to estimate what the entire stream of cash is worth in present dollar terms.

For Grocery Outlet Holding, the model used is a 2 Stage Free Cash Flow to Equity approach, based on cash flow projections in US$. The latest twelve month free cash flow is a loss of about $34.0 million. Analysts provide initial estimates, then Simply Wall St extends these to a 10 year path, with projected free cash flow in 2026 of $5.9 million and further annual figures through to 2035, each discounted back to present value.

Putting those discounted cash flows together, the DCF model arrives at an estimated fair value of about $4.49 per share. Compared with the recent share price around $9.94, this implies the stock is considered 121.4% overvalued by this method, suggesting a wide gap between the model’s intrinsic value and what the market is currently paying.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Grocery Outlet Holding may be overvalued by 121.4%. Discover 51 high quality undervalued stocks or create your own screener to find better value opportunities.

GO Discounted Cash Flow as at Feb 2026

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Grocery Outlet Holding.

Story continues  

Approach 2: Grocery Outlet Holding Price vs Sales

For companies where earnings are limited or volatile, the P/S ratio is often a useful yardstick because it focuses on revenue, which tends to be more stable than profits. Investors usually accept a higher or lower P/S ratio depending on what they expect for future growth and how risky they think the business is, so there is no single “right” number.

Grocery Outlet Holding currently trades on a P/S ratio of 0.21x. That compares with a Consumer Retailing industry average of 0.42x and a peer average of 0.28x, so the stock is priced below both of those benchmarks on sales.

Simply Wall St’s Fair Ratio for Grocery Outlet Holding is 0.25x. This is a proprietary estimate of what the P/S ratio might be given factors such as the company’s earnings growth profile, industry, profit margins, market cap and risk characteristics. It is therefore more tailored than a simple comparison with peers or the broad industry, which treat very different businesses as if they should trade on the same multiple. Compared with this Fair Ratio, the current 0.21x P/S suggests the shares look undervalued on this measure.

Result: UNDERVALUED

NasdaqGS:GO P/S Ratio as at Feb 2026

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Upgrade Your Decision Making: Choose your Grocery Outlet Holding Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which are simply your story about a company linked directly to your assumptions for future revenue, earnings, margins and fair value.

On Simply Wall St, Narratives sit on the Community page and let you connect the story you believe about Grocery Outlet Holding to a full forecast and a fair value estimate, then compare that fair value with the current share price to help you decide how you view the stock.

Because Narratives update automatically when new earnings, guidance or news arrives, you do not need to rebuild your model every time something changes. You can review how the new information affects the story and the valuation.

For example, one Grocery Outlet Holding Narrative might be closer to the higher fair value estimate of about US$19.77 based on stronger growth and margin assumptions. Another could sit near the lower fair value of about US$11.00 with more cautious expectations. Seeing where your own view fits on that spectrum can clarify how you want to act.

Do you think there’s more to the story for Grocery Outlet Holding? Head over to our Community to see what others are saying!

NasdaqGS:GO 1-Year Stock Price Chart

_ This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned._

Companies discussed in this article include GO.

Have feedback on this article? Concerned about the content? Get in touch with us directly._ Alternatively, email editorial-team@simplywallst.com_

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