CHEFS’ WAREHOUSE, INC. (CHEF): what the price requires
At today's price, CHEFS’ WAREHOUSE, INC. (CHEF) is priced for today's economics sustained for ~6.4 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: 2026-07-19 · Source: https://boothcheck.com/report/CHEF
Headline
| Field | Value |
|---|---|
| Ticker | CHEF |
| Company | CHEFS’ WAREHOUSE, INC. |
| Current price | $97.65/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 | 1.3% |
| Operating margin today | 3.3% |
| Margin compression implied | -2.0pp |
| Must persist for | 6.4y |
| Multiple paid | 37x operating income |
The operating-margin requirement is derived from the framework's value band at year 7, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 8.7% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~2 years.
How unusual the bet is: high
| Reference | Value |
|---|---|
| vs own history | +0.48σ |
| cohort percentile (of 69 peers) | 88 |
| sustained it ~6.4 years at this level | 24% |
| implied end-window share | 0% |
Valuation X-Ray
Every valuation family lands below the price. The price therefore requires assumptions beyond what those standard frames encode.
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 | 4.38x | 4 | expensive |
| Earnings | 3.30x | 2 | expensive |
| Relative | 1.71x | 5 | expensive |
| Growth | 1.49x | 3 | expensive |
Families that call it expensive: Asset, Earnings, Relative
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.7%); the inversion above states its own rate.
Per-Model Detail (n=14)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $30.83 | 3.17x | yes | FCF base $0.1B, growth 10% (input: historical growth), terminal g 4.0%, WACC 7.7%, 6yr projection |
| DCF Exit Multiple | Growth | $77.00 | 1.27x | yes | Exit EV/EBITDA: 29.4x / 31.4x / 33.4x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $57.02 | 1.71x | yes | P/E 32.39x (blended: static sector reference 22x + trailing (TTM) 57x), scenarios: 26.8x / 32.4x / 38.0x (bear / base = reference held flat / bull), EV/EBITDA 19.23x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $18.64 | 5.24x | yes | BV/sh $13.21, ROE (TTM) 13.1%, ke 9.3% |
| Two-Stage Excess Return | Asset | $21.95 | 4.45x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $65.63 | 1.49x | yes | Rev $4.3B, growth 10% (input: historical growth; tapered), Terminal P/S: 0.9x / 1.1x / 1.2x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $50.84 | 1.92x | yes | EPS $1.83, growth 28% (input: historical EPS growth), PEG=2.04 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $2.98 | 32.77x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.10B × (1−24%) / WACC 7.7% → EPV (no growth) (excluded from median) |
| Residual Income | Asset | $22.66 | 4.31x | yes | BV $13.21 + 5yr PV of (ROE (TTM) 13.1% − Kₑ 9.3%) × BV; BV grows 8.5%/yr |
| Graham Number | Asset | $23.32 | 4.19x | yes | √(22.5 × EPS $1.83 × BVPS $13.21) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $33.17 | 2.94x | yes | EBITDA $0.17B × sector EV/EBITDA 14.0x |
| FCF Yield | Earnings | $0.47 | 207.77x | yes | FCF $81.1M / Kₑ 9.3% — zero-growth perpetuity (excluded from median) |
| SBC-Adj FCF Yield | Earnings | $0.01 | 9765.00x | yes | SBC-adj FCF $0.06B (FCF $0.08B − SBC $0.02B) capitalized at Kₑ (excluded from median) |
| Ben Graham Formula | Earnings | $59.05 | 1.65x | yes | EPS $1.83 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $2.95 | 33.10x | yes | BV $13.21 × (ROIC 1.7% / WACC 7.7%) (excluded from median) |
| P/Sales Sector | Relative | $184.80 | 0.53x | yes | Revenue $4.26B × sector P/S 2.0x |
| PEG Fair Value | Relative | $68.63 | 1.42x | yes | EPS $1.83 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $19.78 | 4.94x | yes | EPS $1.83 / 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 | $736.2m |
| Net debt / NOPAT (after-tax) | 7.14x |
| Net debt / operating income (pre-tax) | 5.45x |
| Interest coverage | 3.2x |
| Share count CAGR (dilution) | 5.4% |
| Burning cash | no |
Bullet Takeaways
- The earnings line is the story: Q1 2026 revenue rose 11.4% to $1.06B, adjusted EBITDA jumped to $60.1M from $47.5M, and adjusted EPS of $0.40 beat the $0.26 consensus. Management raised full-year revenue guidance to $4.35B to $4.45B.
- The price at $95.45 already embeds that momentum and then some. Every valuation family lands below it: asset-based methods near $19 to $23, earnings-power near $3, peer multiples in the $33 to $56 range, and even the friendliest forward-growth method at $76.
- This is a leveraged, thin-margin distributor. Net debt is $736M, about 4.7x trailing operating income, and the operating margin runs near 3.7%. The bull case needs the volume and margin gains to keep compounding faster than the interest bill.
Bull Case
Look at the direction first, because at Chefs' Warehouse the trajectory is doing the heavy lifting. First-quarter 2026 revenue rose 11.4% to $1.06 billion, gross profit climbed 13.9% to $257.4 million with margin up roughly 53 basis points to 24.3%, and adjusted EBITDA surged to $60.1 million from $47.5 million a year earlier. Adjusted EPS of $0.40 beat the $0.26 consensus by a wide margin. That is not a company drifting sideways; it is one expanding both the top line and the margin at the same time, and management responded by setting full-year revenue guidance of $4.35 to $4.45 billion with adjusted EBITDA of $276 to $286 million.
The business model explains why the operating leverage is real. Chefs' Warehouse is a specialty distributor selling center-of-the-plate proteins and high-end ingredients into restaurants and food-service kitchens, and its strategy is explicitly to sell more to existing customers by widening product breadth and improving the efficiency of its sales force (FY2025 10-K, accession 0001517175-26-000005). Customer concentration is low, with the top ten accounts representing only about 6% of net sales for fiscal 2025 (FY2025 10-K, accession 0001517175-26-000005), so growth comes from thousands of independent kitchens rather than a handful of fragile relationships. As volume scales over a largely fixed distribution network, incremental gross profit drops toward EBITDA, which is exactly the pattern the latest quarter showed.
For valuation, the forward-growth lens is the only one that gets within sight of the price, and it does so for a reason. The DCF exit-multiple method lands at $75.57 and the discounted future market-cap method at $64.15, both built on continued double-digit revenue growth. The reverse-DCF reads the price as a duration bet rather than a margin or growth outlier, with the implied assumption sitting near the upper edge of the company's own history rather than off the chart. If Chefs' Warehouse keeps compounding revenue at a low-double-digit pace while EBITDA margin grinds higher, the gap between today's price and the growth-method values narrows from the top down rather than the price falling to meet the asset methods.
Bear Case
The price is leaning almost entirely on assumptions about the future, and the most fragile of them is margin durability. Strip the forward story out and the standing economics are thin. The operating margin is roughly 3.7%, the earnings power value lands at just $3.04 against a $95.45 (June 27, 2026) quote, and the zero-growth FCF-yield read is effectively a rounding error. What the market is paying for is the bet that a low-margin distributor keeps expanding both volume and margin for years. That bet is sensitive to two things outside management's control. The filing notes that weak consumer discretionary spending could adversely impact sales, and that profit can be squeezed during periods of product cost deflation even when gross margin percentage holds (FY2025 10-K, accession 0001517175-26-000005). Restaurant demand and food-cost direction are exactly the variables a recession or a deflationary swing would hit.
The balance sheet raises the stakes on that fragility. Net debt is $736 million, about 4.7 times trailing operating income, and interest coverage sits near 3.7x, which is comfortable in good times and tight in bad ones. The company has been adding to its term debt, amending the term-loan credit agreement up to a $300 million aggregate principal and extending maturity to 2029 (FY2025 10-K, accession 0001517175-26-000005), and it funds acquisitions on top of that. Leverage is the multiplier here: if the volume-and-margin march stalls, the fixed interest bill does not, and the equity absorbs the difference.
The asset and earnings frames make the disconnect concrete. The simple excess-return value is $18.64, residual income $22.66, and the Graham number $23.32, all roughly a fifth of the price. Share count has been growing at about 5.4% a year, so dilution is quietly working against the per-share math even as the business grows. A 35.97x blended multiple on a distributor with single-digit operating margins assumes the recent acceleration is the new baseline. The bear case is simply that distribution is a cyclical, low-margin business where the last few quarters of margin expansion are the part of the price most likely to reverse.
Valuation
The valuation X-ray on Chefs' Warehouse is lopsided: not one family of methods reaches the $95.45 price, and the spread between them is enormous. Asset-based approaches sit lowest, with the simple excess-return model at $18.64, residual income at $22.66, and the Graham number at $23.32. Earnings-power frames are lower still in places, with earnings power value at $3.04 because the normalized operating margin is so thin. Peer multiples land in the middle, relative valuation at $56.35 and EV/EBITDA relative at $33.17. The forward-growth family is the only one that climbs toward the price, the DCF exit-multiple method at $75.57 and the discounted future market-cap at $64.15.
That shape tells you the price is a forward bet, not a statement about current economics. The reverse-DCF characterizes the implied assumption as elevated, a duration call where the market is paying for the recent growth-and-margin combination to persist well into the future. The one method that exceeds the price, P/Sales-sector at $184.80, does so only because a distributor's revenue base is enormous relative to its profit, which is precisely why sales multiples flatter low-margin businesses and why the profit-based methods matter more here.
The wide low reflects how quickly the value compresses if the margin expansion proves cyclical rather than structural. At $95.45 the buyer is paying near the top of the base-to-high range, which leaves little room for the growth thesis to disappoint. The honest read is a good business with genuine momentum, priced as if that momentum is permanent, on a balance sheet that magnifies whatever happens next.
Catalysts
The first-quarter 2026 print on May was the most recent catalyst and a strong one: revenue up 11.4% to $1.06 billion, adjusted EBITDA up roughly 27% to $60.1 million, and adjusted EPS of $0.40 versus a $0.26 consensus, alongside raised full-year guidance to $4.35 to $4.45 billion in revenue and $276 to $286 million in adjusted EBITDA. The next quarterly report is the live test of whether the margin expansion holds at scale.
The forward watch items are concrete. First, restaurant and food-away-from-home demand, since the model is geared to discretionary dining and the company itself flags consumer-spending sensitivity. Second, food-cost direction, because the filing notes profit can be pressured during cost deflation even when gross margin percentage holds. Third, the leverage and acquisition cadence: the company funds bolt-on deals partly with term debt, so the pace of M&A and the trajectory of net debt to EBITDA will shape how much of the EBITDA growth reaches equity holders. Analyst sentiment is currently constructive, with a consensus skewed to buy ratings, which raises the bar for the next print to keep clearing expectations.
Peer Cohorts (Per Segment, With Filing Citations)
Foodservice distribution (reported)
- SYY (Sysco Corporation)
- FY2025 10-K: …regional and multi-regional distributors can create purchasing cooperatives and marketing groups to enhance their competitive abilities by expanding their product mix, improving purchasing power and extending their geographic capabilities. Our customers are accustomed to purchasing from multiple suppliers and…
- FY2025 10-K: …Exchange Commission on August 28, 2024. Overview Sysco distributes food and related products to restaurants, healthcare and educational facilities, lodging establishments and other foodservice customers. Our primary operations are in North America and Europe. Under the accounting provisions related to disclosures…
- USFD (US FOODS HOLDING CORP.)
- FY2025 10-K: …service to our customers. Our relationship with our customers is further strengthened by our industry-leading MOXē ® digital platform that makes it easy for our customers to manage their orders and inventories, while also providing valuable support for their business. Our extensive network of over 70 distribution…
- FY2025 10-K: …we experience competition from cash-and-carry operations, commercial wholesale outlets, warehouse clubs and grocery stores that serve the commercial foodservice marketplace. We also experience competition from online direct food wholesalers and other retailers, and competitors that are utilizing technology, including…
- PFGC (Performance Food Group Company)
- FY2025 10-K: …including banking and finance. 19 Item 2. P roperties As of June 28, 2025, we operated 155 distribution centers across our three reportable segments. Of our 155 facilities, we owned 72 facilities and leased the remaining 83 facilities. Our Foodservice segment operated 89 distribution centers, our Convenience segment…
- FY2025 10-K: …gallons we expect to use over the 12 months following June 28, 2025. Competition The foodservice distribution industry is highly competitive, with numerous national, regional, local, and specialty distributors. Certain of our competitors may have greater scale and financial and other resources than we do in certain…
- UNFI (UNITED NATURAL FOODS, INC.)
- FY2025 10-K: …to provide direct access to the markets we serve, and we configure them to optimize service and operating costs. The configuration of our distribution network allows us to provide breadth of assortment, competitive service levels and cost efficiency. We believe that we incur lower inbound freight expense than our…
- FY2025 10-K: …with UNFI customers. Through this virtual marketplace, suppliers gain expedited access to UNFI's digital infrastructure to promote and sell their products to UNFI's broad customer base while UNFI customers gain access to an even broader assortment of unique and local items with flexible order sizes and the…
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.