Natural Grocers by Vitamin Cottage (NGVC) store in Durango, Colorado. Image by Andriy Blokhin.
Investment Thesis
Natural Grocers by Vitamin Cottage offers a potential upside of 30-50% from the current stock price of $8.90. By incorporating operating leases as debt, my analysis shows that NGVC has better growth prospects, higher profitability and return on capital compared to its peers, justifying a higher valuation multiple.
The market significantly underprices the company’s future sales growth potential and ability to increase its margins. NGVC is priced as a small player incapable of dealing with competitive pressures, despite a