CASY

We rate CASEYS GENERAL STORES INC (CASY) as a Hold with a composite score of 61.6/100 at a current price of $681.55. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in stability (89th percentile) and momentum (84th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (25th percentile) and value (53th percentile) tempers our overall conviction. We assign a Narrow Moat rating (64/100), Medium uncertainty, and Poor capital allocation.

Key items to watch: balance sheet deleveraging progress; sustainability of the current growth rate. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

CASEYS GENERAL STORES INC holds a mid-tier position (#28 of 50) within the Retail Trade sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 61.6/100 places it at rank #545 in our full 7,333-stock universe. With a $19.1B market capitalization, CASEYS GENERAL STORES INC operates at meaningful scale within the Retail Trade sector, providing competitive advantages in distribution, procurement, and customer reach.

The near-term outlook is constructive, with revenue growing at 37% and momentum in the 84th percentile confirming positive market sentiment and institutional accumulation. The combination of strong top-line growth and favorable price dynamics suggests the company is executing well on its growth strategy. Investment factor at the 25th percentile indicates reinvestment patterns that investors should monitor for sustainability.

The margin cascade tells an important story: gross margins of 25% (-11.2pp vs sector) narrow to operating margins of 84% (+80.4pp vs sector) and net margins of 4.0%, yielding a gross-to-net conversion rate of 16%. This conversion rate is typical for the sector, suggesting a standard cost structure without notable efficiency advantages or disadvantages.

At a current price of $681.55, CASEYS GENERAL STORES INC is trading near fair value based on current fundamentals. Our value factor score of 53/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at a P/E of 37.3x (a 74% premium to the sector median of 21.4x), EV/EBITDA of 1.7x (discounted to peers), P/B of 6.8x, P/S of 1.5x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis finds only partially justified by current fundamentals.

We assign a Medium uncertainty rating to CASEYS GENERAL STORES INC. The stock presents a balanced risk profile: significant leverage (130% debt-to-equity) and low beta of 0.44 — while defensive, this may indicate limited upside participation in bull markets. While not risk-free, the core business fundamentals are adequate to withstand moderate economic stress, and the range of potential outcomes around our fair value estimate is manageable.

Specific risk factors that inform our assessment include: significant leverage (130% debt-to-equity); low beta of 0.44 — while defensive, this may indicate limited upside participation in bull markets; the combination of leverage (130% D/E) and thin margins (4.0% net) amplifies downside risk. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 89th percentile and quality factor at the 54th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: above-average stability (89th percentile) suggests predictable business dynamics. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate CASEYS GENERAL STORES INC's capital allocation as Poor. Key concerns include suboptimal returns on capital. Exemplary capital allocators generate ROE above 20% and maintain conservative leverage — CASEYS GENERAL STORES INC significantly underperforms these benchmarks, raising questions about management's ability to create shareholder value.

Investors should scrutinize management's reinvestment decisions and balance sheet trajectory before committing capital. Poor capital allocation often compounds over time: overlevered balance sheets limit strategic flexibility, while low returns on capital destroy shareholder value. We would need to see sustained improvement in profitability metrics and balance sheet discipline before considering an upgrade.

In summary, CASEYS GENERAL STORES INC receives a Hold rating with a composite score of 61.6/100 (rank #545 of 7,333). Our quantitative framework assigns a Narrow Moat (64/100, trend: stable), Medium uncertainty, and Poor capital allocation. The average factor score across quality, value, momentum, stability, and investment is 61/100.

Our analysis supports a neutral stance on CASEYS GENERAL STORES INC. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.