CASEY'S GENERAL STORES, INC. (CASY): what the price requires
At today's price, CASEY'S GENERAL STORES, INC. (CASY) is priced for today's economics sustained for ~5.9 years. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/CASY
Headline
| Field | Value |
|---|---|
| Ticker | CASY |
| Company | CASEY'S GENERAL STORES, INC. |
| Current price | $854.84/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 4.5% |
| Operating margin today | 4.9% |
| Margin compression implied | -0.4pp |
| Must persist for | 5.9y |
| Multiple paid | 41x operating income |
The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 8% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~2 years.
Reconcile: at the x-ray's 9.3% required return this reads ~8.4 years; the models below use their own rates.
How unusual the bet is: high
| Reference | Value |
|---|---|
| vs own history | +2.35σ |
| cohort percentile (of 210 peers) | 90 |
| sustained it ~5.9 years at this level | 26% |
| implied end-window share | 0% |
Valuation X-Ray
The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 3.50x | 4 | expensive |
| Earnings | 5.00x | 4 | expensive |
| Relative | 1.24x | 4 | expensive |
| Growth | 1.13x | 3 | expensive |
Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.5%); the inversion above states its own rate.
Per-Model Detail (n=15)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $473.74 | 1.80x | yes | FCF base $0.8B, growth 10% (input: historical growth), terminal g 4.0%, WACC 8.5%, 6yr projection |
| DCF Exit Multiple | Growth | $877.32 | 0.97x | yes | Exit EV/EBITDA: 312.0x / 314.0x / 316.0x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $302.10 | 2.83x | yes | P/E 27.37x (blended: static sector reference 20x + trailing (TTM) 45x), scenarios: 22.7x / 27.4x / 32.1x (bear / base = reference held flat / bull), EV/EBITDA 30.8x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $207.40 | 4.12x | yes | BV/sh $106.11, ROE (TTM) 18.1%, ke 9.3% |
| Two-Stage Excess Return | Asset | $286.30 | 2.99x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $753.66 | 1.13x | yes | Rev $17.6B, growth 10% (input: historical growth; tapered), Terminal P/S: 1.5x / 1.8x / 2.1x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $670.60 | 1.27x | yes | EPS $19.16, growth 35% (input: historical EPS growth), PEG=1.27 (Fair) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | — | — | no | — |
| Residual Income | Asset | $284.25 | 3.01x | yes | BV $106.11 + 5yr PV of (ROE (TTM) 18.1% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $213.88 | 4.00x | yes | √(22.5 × EPS $19.16 × BVPS $106.11) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $0.01 | 85484.00x | yes | EBITDA $0.11B × sector EV/EBITDA 14.0x (excluded from median) |
| FCF Yield | Earnings | $145.52 | 5.87x | yes | FCF $721.6M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $127.11 | 6.73x | yes | SBC-adj FCF $0.66B (FCF $0.72B − SBC $0.06B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $618.23 | 1.38x | yes | EPS $19.16 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | — | — | no | — |
| P/Sales Sector | Relative | $707.33 | 1.21x | yes | Revenue $17.56B × sector P/S 1.5x |
| PEG Fair Value | Relative | $718.50 | 1.19x | yes | EPS $19.16 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $207.14 | 4.13x | yes | EPS $19.16 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $1.9b |
| Net debt / NOPAT (after-tax) | 2.91x |
| Net debt / operating income (pre-tax) | 2.29x |
| Interest coverage | 8.0x |
| Share count CAGR (buyback) | -0.1% |
| Burning cash | no |
Bullet Takeaways
- Casey's runs a convenience-store chain where the kitchen, not the fuel pump, carries the profit: prepared food and grocery are roughly 34% of revenue but generate about 63% of gross profit, per the FY2025 10-K, which is why the market treats it as a food business with a fuel attachment rather than a gas-station operator.
- The bet in the price is demanding: today's level pays around 40 times operating income, a multiple that requires the company to compound at close to its self-funding ceiling for roughly six years, a pace that runs ahead of what it has actually delivered.
- The next milestones are the store-build cadence and the digestion of the Fikes acquisition; the company has laid out a target of 400-plus new stores and 8 to 10% EBITDA growth a year through FY2029.
Bull Case
Convenience retail is usually a thin-margin, fuel-dependent business, and the market prices most of the sector that way. Casey's earns its separate treatment because it solved the part of the model that is hardest to copy: the prepared-food kitchen inside the store. The FY2025 10-K is precise about the economics, noting that prepared food and dispensed beverage together with grocery and general merchandise "have generated about 34% of our total revenue, but they have resulted in approximately 63% of our revenue less cost of goods sold". A third of the sales producing nearly two-thirds of the gross profit is the signature of a food company, not a gas station, and food traffic is what brings the customer to the pump rather than the other way around.
The second structural advantage is geography. Casey's built its base in small towns where, as the filing describes, its stores "compete principally with other local grocery and convenience stores" rather than a dense cluster of national chains. In a town that can support one good store, being that store is a durable position, and it is one a competitor cannot easily replicate by opening across the street. That is the moat the static valuation methods cannot see: the asset-value and earnings-power lenses read the stock as richly valued precisely because they price the existing store base, not the compounding from filling in a fragmented map of underserved towns.
Capital allocation supports the growth rather than fighting it. The company funds new stores and acquisitions from its own cash flow and has been explicit that it will "continue pursuing acquisition opportunities" that broaden its geographic reach, the Fikes purchase being the largest recent example. Share count has been essentially flat, so the per-share growth comes from the operating engine, not financial engineering. The most recent fiscal year showed the model working at scale: revenue of $17.56 billion and diluted earnings per share up 30.9% to $19.16, with EBITDA up 23.6%. That is the kind of durable, self-funded compounding the price is paying for, and the year delivered it.
Bear Case
The bear case is that the very moat the bulls celebrate is quietly under pressure. Casey's edge in small towns rests on being the differentiated destination, but the 10-K concedes the goods it sells are "generally available from various competitors in the communities served by Casey's and by certain online retailers". Dollar stores have pushed aggressively into the same small markets with cheaper grocery and packaged food, quick-service chains compete for the prepared-food occasion, and online grocery delivery now reaches towns that were once captive. None of these erodes the position overnight, but each chips at the assumption that Casey's is the only good option in town, and that assumption is what justifies the premium.
The numbers make the demand explicit. At today's price the market pays roughly 40 times operating income, a multiple that sits at the very top of the relevant peer distribution and well beyond the upper quartile. To support it, the business has to grow near its self-funding ceiling for about six years, a pace that runs well above what the company has historically delivered, and the record shows only about a quarter of comparable fast-growers sustained that rate for even six years. If the compounding decelerates toward something more ordinary, the multiple is what gives, and the descent from 40 times is long.
The fuel business is the other vulnerability the headline growth obscures. Retail fuel is, in the company's own words, "an important part of our revenue and earnings", and per-gallon margins have been unusually strong, which flattered recent results. Fuel margin is set by wholesale cost swings the company does not control, so a normalization toward leaner cents-per-gallon would pull down a meaningful slice of profit even if gallons hold. Layer on the integration risk the filing flags around acquisitions, which "involve risks that could cause our actual growth or operating results to differ materially from our expectations", and a stretch of soft fuel margins arriving while the company is still absorbing a large acquisition is the scenario the price is least prepared for.
Valuation
Start with what the price is paying for, because it is unusual for a convenience retailer. At today's level Casey's trades around 40 times operating income, and inverting that multiple, the price requires company-wide operating growth held near the self-funding ceiling for roughly six years. The business has been earning an operating margin near 4.9%, and the priced-in assumption asks it to keep compounding at a rate it has rarely matched. This is a demanding bet on continued execution, not a value setup.
The valuation methods agree on the demand. The asset-value lenses, which start from book value of about $103 per share and add the returns earned above the cost of equity, land far below the price; the earnings-power methods that capitalize current free cash flow land lower still. The peer-multiple frame, even blended generously, reaches only a fraction of today's level. Only the growth-and-cash-flow framing reaches the price, and it gets there by crediting years of forward compounding the static methods structurally cannot price. The pattern is clean: this is a durability premium. The market is paying for the small-town store machine to keep growing, and every method that ignores that growth says the stock is expensive.
Solvency is comfortable but not pristine, and it bears on how much room the growth has to disappoint. The company carries net debt near $1.9 billion against trailing operating income, putting leverage around 2.3 times operating income with interest covered roughly eight times over. That is investment-grade territory and leaves capacity to keep funding new stores, but it is not the debt-free balance sheet that would let the company shrug off a fuel-margin downturn. The cohort comparison is where this name's bet looks most stretched: its multiple sits at the very top of its peer set, so the same growth shortfall that would trim a cheaper operator's stock takes more off a stock priced for the growth to continue.
Catalysts
The most recent fiscal year set a high bar for what the price is underwriting. Casey's reported revenue of $17.56 billion and net income of $714.4 million, with diluted earnings per share up 30.9% to $19.16 and EBITDA up 23.6% to $1.48 billion. Inside sales did the work the model depends on, with prepared-food same-store growth of 5.2% and grocery up 3.9%, while fuel volume reached about 3.52 billion gallons at higher per-gallon margins. The Fikes acquisition, which added 198 CEFCO stores when it closed in November 2024, contributed to the EBITDA gain and brought the chain to 2,944 stores across 19 states.
The forward catalysts are the store program and the durability of fuel margins. Management has framed a target of 8 to 10% EBITDA growth a year and more than 400 new stores by FY2029, funded by food innovation and digital ordering. The two variables to watch are whether prepared-food same-store growth holds as dollar stores and quick-service chains press into the same towns, and whether the elevated fuel margins that lifted recent results normalize. Both feed directly into the compounding rate the price requires, so each quarterly print is a check on whether the demanding bet is being earned.
Peer Cohorts (Per Segment, With Filing Citations)
Convenience store retail (single reportable segment) (reported)
- MUSA (MURPHY USA INC.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
company FY2026 results and three-year plan · company FY2026 annual results · company FY2026 results · company three-year plan