Fundamentals snapshot
BJ · NYQ · Consumer Defensive · Discount Stores
Current price
$91.61
52-week range
$83.65 - $115.43
Market cap
$11.70B
One-glance verdict
Fair-value range $34.07 – $65.19 (cautious → optimistic — tap the ? for the math)
Wall Street consensus: $101.10 (157.1% higher than our fair-value estimate)
Buy below $31.45 for a 20% safety cushion
Balance sheet
Net debt $2.83B. Interest coverage shows how many times profit covers the interest bill.
What stands out
Quick scan of the biggest positives and negatives from the detailed checklist below.
What this company does
BJ's Wholesale Club operates large, members-only stores on the East Coast where shoppers can buy groceries, electronics, and gasoline in bulk. The company makes money from both the products it sells and the annual membership fees customers pay to access its stores, which provides a steady, predictable stream of cash. This business model relies on attracting a large number of loyal members who consistently return to stock up on everyday items at low prices.
BJ's Wholesale Club was started in 1984 in Massachusetts as part of a larger discount store chain. After a series of corporate changes, including being spun off as its own company in 1997, it was purchased by private equity firms (investment companies that buy and manage businesses) in 2011. This allowed the company to restructure itself away from the public eye before it began selling shares of stock to the public again in 2018. Historically focused on the U.S. East Coast, BJ's has since been expanding its footprint into the Southeast and Midwest.
BJ's is a membership-only warehouse club, which means shoppers must pay an annual fee to have access to its stores. The company sells a wide variety of items, often in bulk, at prices typically lower than traditional supermarkets. You can find everything from fresh groceries, meat, and baked goods to electronics, furniture, and household essentials. Customers can shop in their large, warehouse-style physical stores, on the BJs.com website, or through a mobile app.
This is the company's largest business, making up the vast majority of its total revenue (the total money collected from sales). It includes all the physical and digital products BJ's sells, from groceries that make up most of the sales, to general items like clothing and TVs. A key part of this business is the company's own private-label brands, Wellsley Farms and Berkley Jensen, which are exclusive to BJ's. These in-house brands are important because they generally have better margins (the percentage of the sale price that is actual profit).
While membership fees only account for a tiny slice of the company's total revenue, they are a very important source of its actual profit. This is the money that customers pay every year for the right to shop at the clubs. Because there are very few costs associated with this income, it is highly profitable and predictable for the company. The high renewal rate, where a large majority of members sign up again each year, provides a stable and recurring stream of cash for the business.
Many BJ's locations have their own gas stations, which sell a significant amount of fuel and act as a major driver to bring members to the clubs more often. The company also offers other services at its locations, such as optical centers, tire sales, and travel deals. While not the main business, these offerings provide additional revenue streams and make the membership more valuable to customers, encouraging them to visit and spend more.
The company's leadership is focused on several key areas for growth. They are physically expanding by steadily opening new club locations in states across the Midwest and Southeast. Management is also investing heavily in digital convenience, improving its website and app and expanding options like curbside pickup and same-day delivery. Another priority is growing its own private-label brands, which helps improve profitability. Finally, BJ's is focused on attracting new members and encouraging them to upgrade to higher-tier memberships, which builds loyalty and leads to more spending over time.
Price history
Earnings history
Click any quarter to read the call summary and what the numbers say.
Is it cheap or expensive?
Wall Street consensus is the average analyst price target: $101.10 (157.1% higher than our fair-value estimate).
Buy below $31.45 for a 20% safety cushion. That means buying at least 20% below our fair value, as a buffer in case our estimate turns out too rosy.
Our most-likely fair value is $39.32 a share — about 57.1% below today's price of $91.61, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Net debt $2.8B. Interest coverage 20.4x.
BJ's Wholesale Club Holdings, Inc.'s profit covers its interest bill about 20.4 times over. which is stronger than every peer shown here.
Total debt $2.86B Interest coverage 20.40x This is the baseline the peer rows are being compared against.
Total debt $75.55B Interest coverage 10.66x -48% vs BJ Carries about 1.9x less debt cushion than BJ.
Total debt $19.27B Interest coverage 11.50x -44% vs BJ Carries about 1.8x less debt cushion than BJ.
Total debt $15.80B Interest coverage 9.56x -53% vs BJ Carries about 2.1x less debt cushion than BJ.
What you should know
The numbers
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Valuation
Profitability
Health
Growth
Cash flow
Dividend
Metric explainer
Debt comparison
What you should know