WMK

We rate WEIS MARKETS INC (WMK) as a Hold with a composite score of 54.4/100 at a current price of $72.71. 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 (88th percentile) and momentum (57th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (32th percentile) and quality (50th percentile) tempers our overall conviction. We assign a No Moat rating (39/100), Low uncertainty, and Standard capital allocation.

Key items to watch: quarterly earnings execution and sector-level competitive dynamics. 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.

WEIS MARKETS INC holds a top-quartile position (#0 of 50) within the Retail Trade sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 54.4/100 places it at rank #1347 in our full 7,333-stock universe. At $1.8B in market capitalization, WEIS MARKETS INC is a small-cap player in the Retail Trade space, which limits certain scale advantages but may allow for more agile strategic execution.

Revenue is growing at 5%, though momentum at the 57th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.

The margin cascade tells an important story: gross margins of 25% (-11.3pp vs sector) narrow to operating margins of 2% (-1.7pp vs sector) and net margins of 1.9%, yielding a gross-to-net conversion rate of 8%. The significant margin erosion from gross to net suggests elevated operating expenses, high interest costs, or other structural drags that warrant monitoring.

At a current price of $72.71, WEIS MARKETS INC is trading near fair value based on current fundamentals. Our value factor score of 52/100 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 20.2x (roughly in line with the sector median of 21.4x), EV/EBITDA of 17.2x (at a premium), P/B of 1.4x, P/S of 0.4x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.

We assign a Low uncertainty rating to WEIS MARKETS INC. The company exhibits strong financial stability with a beta of 0.19, and a stability factor in the 88th percentile. The predictable nature of the business model and solid financial position reduce the range of potential outcomes, giving us confidence in our fair value estimate.

Specific risk factors that inform our assessment include: low beta of 0.19 — while defensive, this may indicate limited upside participation in bull markets. 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 88th percentile and quality factor at the 50th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: above-average stability (88th 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 WEIS MARKETS INC's capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 6.8%, and the balance sheet is managed within acceptable parameters (D/E: 50%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; WEIS MARKETS INC falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. The 1.87% dividend yield provides some income return, but the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.

In summary, WEIS MARKETS INC receives a Hold rating with a composite score of 54.4/100 (rank #1347 of 7,333). Our quantitative framework assigns a No Moat (39/100, trend: stable), Low uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 56/100.

Our analysis supports a neutral stance on WEIS MARKETS 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.