One-glance verdict
Undervalued
$144.75 our estimate vs market $34.57
Wall Street consensus: $46.25 (-68.0% lower than our fair-value estimate)
76% below our estimate, below the bear case
Fundamentals snapshot
Central Garden & Pet Company
CENTA · NMS · Consumer Defensive · Packaged Foods
Current price
$34.57
52-week range
$25.97 - $40.80
Market cap
$2.16B
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 12.8x P/E vs peer median 22.5x (43.1% cheaper).
What this company does
Central Garden & Pet Company
Central Garden & Pet makes and sells a wide variety of popular products for pet care and lawn and garden upkeep, including brands like Nylabone dog chews and Pennington grass seed. It earns money by selling these items to a broad range of retailers, from big-box stores like Walmart to independent garden centers. Because people tend to consistently spend money on their pets and homes, the company can benefit from a steady demand for its products.
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 series of acquisitions (buying other companies) to grow. It officially became Central Garden & Pet in 1992 and went public (selling shares of the company to the public for the first time) on the NASDAQ stock exchange in 1993. Through the years, it has grown by purchasing well-known brands in both the pet and garden industries, shifting its focus from just distributing products to manufacturing and marketing its own brands.
What it actually does
Central Garden & Pet makes and sells a wide variety of products for pet care and gardening that you would likely recognize from major retail stores. For your pets, they offer everything from Nylabone dog chews and Kaytee bird seed to Aqueon aquariums and Comfort Zone calming products. For your yard, they produce Pennington grass seed, Ferry-Morse flower and vegetable seeds, and insect control products under brands like Amdro and Sevin. The company sells these items to large retailers like Walmart and Costco, as well as to e-commerce sites like Amazon, grocery stores, and local nurseries.
Pet
This is the larger of the company's two main business areas, making up more than half of its sales. This segment provides a huge range of supplies for dogs, cats, birds, small animals, reptiles, and even horses. Customers, who are pet owners, buy items like dog treats and toys, pet beds, grooming tools, aquariums, and food for smaller animals. Some of their most popular brands include Cadet, Nylabone, Kaytee, and Aqueon.
Garden
This part of the business focuses on products to help people care for their lawns and gardens. It sells things that everyday homeowners and gardening enthusiasts buy, such as grass seed, fertilizers, and products to control weeds and insects. This segment also includes wild bird feed, bird houses, and live plants. Well-known brands from this division include Pennington, Ferry-Morse, and Amdro.
What management is betting on now
The company's current strategy, called the "Central to Home" strategy, focuses on growing the brands that consumers love and strengthening partnerships with major retailers. They are also focused on improving their margins (the profit made on each dollar of sales) by making their supply chain (the entire process of making and selling their goods) more efficient and reducing costs. A key part of their plan is to continue making strategic acquisitions (buying other companies) to add new products and capabilities, particularly in high-growth areas and e-commerce (selling goods online).
Price history
How the share price has moved
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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 $144.75 vs current price $34.57
Wall Street consensus is the average analyst price target: $46.25 (-68.0% lower than our fair-value estimate).
Our most-likely fair value is $144.75 a share — about 318.7% above today's price of $34.57, 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
CENTA
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 $748.20M Interest coverage 4.98x +15% vs CENTA Has roughly the same debt cushion as CENTA.
Total debt $2.49B Interest coverage 3.28x -24% vs CENTA Carries about 1.3x less debt cushion than CENTA.
Total debt $493.66M Interest coverage 5.36x +24% vs CENTA Carries about 1.2x more debt cushion than CENTA.
Total debt $1.13B Interest coverage 6.80x +57% vs CENTA Carries about 1.6x more debt cushion than CENTA.
What you should know
The case for and against CENTA
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 12.8x P/E vs peer median 22.5x (43.1% 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)
12.80x
Forward P/E
11.31x
P/B
1.24x
P/S
0.70x
EV/EBITDA
7.61x
PEG ratio
1.87x
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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