One-glance verdict
Undervalued
$658.48 our estimate vs market $40.10
Wall Street consensus: $53.00 (-92.0% lower than our fair-value estimate)
94% below our estimate, below the bear case
Fundamentals snapshot
Central Garden & Pet Company
CENT · NMS · Consumer Defensive · Packaged Foods
Current price
$40.10
52-week range
$28.77 - $46.97
Market cap
$2.51B
Balance sheet
Watch
4.33x Stretched
Net debt $411.88M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
0 Risks
3 rewards · 0 risks
- Reward Returns 10.0% on equity, ahead of 25% of its peers.
- Reward Free cash flow was positive in 9/10 years.
- Reward Trades at 14.9x P/E vs peer median 18.3x (19.0% cheaper).
What this company does
Central Garden & Pet Company
Central Garden & Pet sells popular products for pets and gardens, such as Nylabone dog toys and Pennington grass seed, primarily through big retail stores like Walmart and Home Depot. The company's success is tied to how much people are willing to spend on their pets and yards, which can change with the economy. A key factor for its profits is managing its supply chain (the entire process of getting products made and delivered to stores), as efficiently moving a wide variety of goods is essential to keeping costs low.
How the company got here
Central Garden & Pet started in 1955 as a small garden supply distributor in California. A major turning point came in 1980 when William E. Brown bought the company and began a period of significant growth. Through a series of acquisitions (buying other companies), it expanded from a regional distributor to a national supplier and eventually added pet supplies to its business, officially becoming Central Garden & Pet in 1992. Over the years, it has purchased many well-known brands like Pennington Seed, Nylabone, and Kaytee, shifting its focus from just distributing products to owning and marketing its own brands.
What it actually does
Central Garden & Pet makes and sells a wide variety of products for your pets and your yard. Think of them as a company that provides many of the items you'd find in a pet store or garden center. They sell these products under many different brand names to big-box retailers, grocery stores, and online sellers. So, while you might not see the name "Central Garden & Pet" on the bag of dog food or grass seed you buy, there's a good chance they made it.
Pet
This is the larger of the company's two main business areas, making up more than half of its sales. This segment provides almost everything a pet owner might need, from dog treats and toys under brands like Cadet and Nylabone to aquarium supplies from Aqueon and food for birds and small animals from Kaytee. They even sell live fish and small animals to pet stores. Essentially, this part of the business profits from selling a huge range of supplies that pet owners regularly purchase to care for their animals.
Garden
The Garden segment sells products to help people take care of their lawns and gardens. This includes well-known brands like Pennington for grass seed and wild bird feed, Ferry-Morse for vegetable and flower seeds, and Amdro and Sevin for insect and weed control. This business is more seasonal, with a large portion of its sales happening in the spring. Homeowners, gardeners, and bird-watching enthusiasts are the main customers who buy these products to beautify their yards and control pests.
What management is betting on now
The company's current strategy, called "Central to Home," focuses on growing its existing popular brands and acquiring new ones to build a stronger portfolio. They are also working on becoming more efficient to improve their margins (the profit made on each dollar of sales) and fuel further growth. A key part of their plan is to partner closely with major retailers and expand their online sales presence. Management is essentially betting that by owning strong brands and being a reliable partner to stores, they can continue to be a leader in the stable and growing pet and garden markets.
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q4
$193.05M
FY2025 Q1
$-74.93M
FY2025 Q2
$-57.52M
FY2025 Q3
$251.66M
FY2025 Q4
$171.89M
FY2026 Q1
$-81.03M
FY2026 Q2
$-60.09M
FY2026 Q3
$314.87M
Revenue
$882.36M
Net income
$89.86M
Diluted EPS
1.45
Operating cash flow
$327.46M
Free cash flow
$314.87M
Fetching…
Sources
Revenue
$906.15M
Net income
$79.42M
Diluted EPS
1.28
Operating cash flow
$-49.64M
Free cash flow
$-60.09M
Fetching…
Sources
Revenue
$617.37M
Net income
$6.84M
Diluted EPS
0.11
Operating cash flow
$-70.22M
Free cash flow
$-81.03M
Fetching…
Sources
Revenue
$678.18M
Net income
$-9.81M
Diluted EPS
-0.16
Operating cash flow
$182.73M
Free cash flow
$171.89M
Fetching…
Sources
Revenue
$960.91M
Net income
$95.01M
Diluted EPS
1.52
Operating cash flow
$265.48M
Free cash flow
$251.66M
Fetching…
Sources
Revenue
$833.54M
Net income
$63.63M
Diluted EPS
0.98
Operating cash flow
$-46.86M
Free cash flow
$-57.52M
Fetching…
Sources
Revenue
$656.44M
Net income
$14.01M
Diluted EPS
0.21
Operating cash flow
$-68.83M
Free cash flow
$-74.93M
Fetching…
Sources
Revenue
$669.49M
Net income
$-34.16M
Diluted EPS
-0.51
Operating cash flow
$203.09M
Free cash flow
$193.05M
Fetching…
Sources
Is it cheap or expensive?
Fair value $658.48 vs current price $40.10
Wall Street consensus is the average analyst price target: $53.00 (-92.0% lower than our fair-value estimate).
Our most-likely fair value is $658.48 a share — about 1,542.1% above today's price of $40.10, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Watch
Net debt $411.9M. Interest coverage 4.3x.
Net debt
$411.88M
Interest coverage
4.33x
Central Garden & Pet Company's profit covers its interest bill about 4.3 times over.
Watch
Worse cushion
Baseline
Better cushion
CENT
BASELINE
Central Garden & Pet Company
Total debt $1.41B Interest coverage 4.33x This is the baseline the peer rows are being compared against.
Total debt $2.49B Interest coverage 3.28x -24% vs CENT Carries about 1.3x less debt cushion than CENT.
Total debt $493.66M Interest coverage 5.36x +24% vs CENT Carries about 1.2x more debt cushion than CENT.
Total debt $748.20M Interest coverage 4.98x +15% vs CENT Has roughly the same debt cushion as CENT.
Total debt $6.54B Interest coverage 21.22x +390% vs CENT Carries about 4.9x more debt cushion than CENT.
What you should know
The case for and against CENT
3 Rewards
0 Risks
Rewards
-
Returns 10.0% on equity, ahead of 25% of its peers.
-
Free cash flow was positive in 9/10 years.
-
Trades at 14.9x P/E vs peer median 18.3x (19.0% cheaper).
Risks
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
14.85x
Forward P/E
13.12x
P/B
1.44x
P/S
0.81x
EV/EBITDA
8.64x
PEG ratio
2.01x
Profitability
How much profit each dollar creates
Gross margin
32.6%
Operating margin
14.3%
Net margin
5.4%
ROE
10.0%
ROA
4.3%
Health
Liquidity and balance-sheet strength
Debt / equity
0.81x
Current ratio
3.79x
Quick ratio
2.58x
Total debt
$1.41B
Total cash
$996.71M
Growth
How the business has been compounding
Revenue TTM
$3.08B
Revenue 5Y CAGR
-1.3%
EPS TTM
2.70
EPS 5Y CAGR
4.4%
Cash flow
How much cash the business throws off
Operating CF TTM
$390.32M
Free CF TTM
$291.09M
FCF margin
9.4%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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