Performance Food Group Company (PFGC): what the price assumes

In the published model solve dated 2026-Q2, anchored at $100.85, Performance Food Group Company (PFGC) is priced for +18.2% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-27.

Generated: 2026-08-30 · Exported: 2026-08-31 · Source: https://boothcheck.com/report/PFGC

Headline

FieldValue
TickerPFGC
CompanyPerformance Food Group Company
Current price$100.85/sh
CompositionFoodservice 54% / Convenience 38% / Specialty 7% / Corporate & All Other 0%

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Operating margin (value-band context)1.1%
Operating margin today1.3%
Margin compression (value-band)-0.2pp
Implied growth18.2%
Multiple paid27x operating income

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 8.3% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range (limited comparison data)

ReferenceValue
vs own history-0.17σ
cohort percentile (of 69 peers)71

Valuation X-Ray

Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).

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.

FamilyMedian price/FVModelsReads
Asset4.62x5expensive
Earnings3.39x5expensive
Relative4.13x2expensive
Growth0.84x3justifies

Families that justify the price: Growth 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 7.1%); the inversion above states its own rate.

Per-Model Detail (n=15)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$203.230.50xyesFCF base $1.1B, growth 7% (input: historical growth), terminal g 4.0%, WACC 7.1%, 6yr projection
DCF Exit MultipleGrowth$120.030.84xyesExit EV/EBITDA: 10.8x / 12.8x / 14.8x (bear / base = today's held flat / bull), 6yr
Relative ValuationRelative——noP/E 28.67x (blended: static sector reference 22x + trailing (TTM) 44x), scenarios: 23.9x / 28.7x / 33.5x (bear / base = reference held flat / bull), EV/EBITDA 14x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$24.664.09xyesBV/sh $31.10, ROE (TTM) 7.3%, ke 9.3%
Two-Stage Excess ReturnAsset$21.854.62xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$79.221.27xyesRev $67.8B, growth 7% (input: historical growth; tapered), Terminal P/S: 0.2x / 0.2x / 0.3x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative$27.483.67xyesEPS $2.29, growth 6% (input: historical EPS growth), PEG=6.92 (Overvalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$9.9410.15xyesNormalized EBIT (5y avg op income, one-time charges added back) $0.72B × (1−27%) / WACC 7.1% → EPV (no growth)
Residual IncomeAsset$21.434.71xyesBV $31.10 + 5yr PV of (ROE (TTM) 7.3% − Kₑ 9.3%) × BV; BV grows 4.8%/yr
Graham NumberAsset$40.032.52xyes√(22.5 × EPS $2.29 × BVPS $31.10) — Graham's conservative floor
EV/EBITDA RelativeRelative——noEBITDA $1.70B × sector EV/EBITDA 14.0x
FCF YieldEarnings$33.283.03xyesFCF $1029.6M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings$29.753.39xyesSBC-adj FCF $0.98B (FCF $1.03B − SBC $0.05B) capitalized at Kₑ
Ben Graham FormulaEarnings$40.832.47xyesEPS $2.29 × (8.5 + 2×6.4%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset$9.6810.42xyesBV $31.10 × (ROIC 2.2% / WACC 7.1%)
P/Sales SectorRelative——noRevenue $67.84B × sector P/S 2.0x
PEG Fair ValueRelative$21.944.60xyesEPS $2.29 × (PEG 1.5 × growth 6.4% (input: historical EPS growth)) → PE 9.6x
Earnings YieldEarnings$24.764.07xyesEPS $2.29 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

UnitRoleValuation basisRevenueReported profitValue evidenceStatus
Foodserviceoperatingenterprise$36.5b—withheldunresolved no unit value
Convenienceoperatingenterprise$26.0b—withheldunresolved no unit value
Specialtyoperatingenterprise$5.1b—withheldunresolved no unit value

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

FieldValue
Net debt$6.7b
Net debt / NOPAT (after-tax)10.34x
Net debt / operating income (pre-tax)7.57x
Interest coverage2.1x
Share count CAGR (dilution)0.3%
Burning cashno

Bullet Takeaways

Bull Case

The counterintuitive thing about Performance Food Group is that a business earning barely a penny of operating profit on each dollar of sales is genuinely improving its economics, and you have to look past the headline margin to see it. The lever is mix. The trucks carry everything from cigarettes to canned groceries to fresh center-of-the-plate proteins, but the profit comes disproportionately from independent restaurants, which buy higher-margin products and value service over price. In the most recent quarter independent-restaurant case volume grew about 7.3%, and Foodservice independent case growth accelerated to around 6.5%, ahead of the company's own benchmark. Each point of independent case growth shifts the revenue mix toward the profitable end, which is why adjusted EBITDA can grow faster than sales even when the top line is held back by deflation.

The scale itself is the moat. Food distribution is a logistics business where the largest networks have a structural cost advantage: more distribution centers closer to customers, denser delivery routes, and the buying power that comes from moving the most volume. Performance Food Group sits among the three national broadliners, and it has been consolidating, acquiring Cheney Brothers, which adds roughly $3.2 billion of revenue and five distribution centers in the Southeast, with about $50 million of expected run-rate cost synergies. In a fragmented industry, a national player buying strong regional operators compounds the route density that drives the cost advantage.

The segment results show the model working across all three legs. Convenience adjusted EBITDA grew about 34% in the recent quarter on the onboarding of large chain customers like Love's and RaceTrac, and the company raised its full-year fiscal 2026 adjusted EBITDA guidance toward $1.9 billion to $1.93 billion. The valuation reflects an earnings-growth story rather than an asset story: the relative-multiple and growth-DCF methods reach the price, crediting the mid-single-digit-and-better EBITDA growth. For a distributor gaining share in its highest-margin channel while integrating an accretive acquisition, the bull case is operating leverage on a volume machine.

Bear Case

The structural truth a holder has to sit with is that this is a 1%-margin business carrying eight turns of leverage, and that combination leaves almost no room for error. Net debt of about $6.8 billion sits against trailing operating income, roughly eight times, with interest coverage near two times. When a business earns about a penny of operating profit per dollar of sales, a small move in input costs, freight, or labor swings the bottom line hard, because there is no margin cushion to absorb it. Distribution is a pass-through business in good times and a vise in bad ones: the company buys product, marks it up by a thin spread, and ships it, and that spread is exposed to deflation, which compresses dollar margins, and to wage and fuel inflation, which raises the cost of moving the boxes. The company has already flagged category deflation and elevated facility expenses as pressures on profitability.

The valuation does not price in that fragility. At today's price the asset-based and earnings-power methods read deeply expensive. The stock trades at a large multiple of its book value of about $30.07 per share, and capitalizing the company's normalized operating earnings at the cost of capital lands far below the price, because the actual earnings power, a 7% return on equity and EPS of about $2.11, is modest. The price requires the EBITDA growth and the margin-mix improvement to keep compounding, and it embeds an operating-income growth assumption around 24% that is well above what a low-margin distributor typically sustains. If the independent case growth slows, or if deflation persists and squeezes the spread, there is no static valuation method that frames the stock as anything but rich.

Integration is the near-term execution risk on top of the structural one. The Cheney Brothers acquisition has brought higher-than-expected integration costs that have pressured profit, and integrating a $3.2 billion regional distributor across distribution centers, systems, and customer relationships is exactly the kind of operationally intensive work that can leak margin in a business that has none to spare. The bear case is not that Performance Food Group is a bad operator; it is that a thinly-margined, heavily-levered distributor priced for sustained high EBITDA growth has very little buffer if deflation, freight costs, or integration friction interrupts the compounding the price assumes.

Valuation

The price is betting on operating leverage in a low-margin machine: that Performance Food Group keeps growing adjusted EBITDA in the mid-single digits and better by shifting its mix toward higher-margin independent-restaurant volume, even though its headline operating margin sits near 1%. The inversion frames the bet as roughly 24% operating-income growth, which sounds aggressive until you remember that on a 1% margin base, modest mix improvement and synergy capture can produce large percentage swings in operating profit. The bet is real but it is a bet on the mix and the synergies, not on the revenue line, which grows slowly.

The methods split the way they do for a thin-margin grower. The relative-multiple lens reaches the price, valuing the business at a distributor-sector enterprise-to-EBITDA multiple on about $1.63 billion of EBITDA, landing close to the current price. The growth-DCF methods also reach it by crediting the EBITDA growth forward. Where the methods say expensive is everything anchored on current earnings or assets: the book-value methods, with the stock at a large premium to its roughly $30 book value, and the earnings-power lens, which capitalizes the modest current profit far below the price. That divergence is the signature of a business valued on what its EBITDA becomes, not on what its net income is today. The earnings-based methods are not wrong; they are measuring a profit stream the market is looking past.

Solvency is the binding constraint and the reason the valuation matters. Net debt of about $6.8 billion at roughly eight times operating income, with interest coverage near two times, is a heavily-levered structure for a business with no margin cushion. The share count has been essentially flat, so there is no buyback supporting per-share value, and free cash flow, while positive at about $1 billion, services the debt before anything reaches holders. What the buyer is underwriting is execution: the independent case-mix improvement and the Cheney synergies have to keep lifting EBITDA, and deflation and freight costs have to stay contained, because the leverage amplifies any disappointment. The downside here is not asset value, which is thin, but the EBITDA holding its trajectory against a fixed and sizable debt load.

Catalysts

Performance Food Group's Q3 fiscal 2026 print beat on earnings and raised the profit outlook. Net sales were about $16.29 billion with adjusted EBITDA of $410.6 million, up about 6.6% year over year, and management raised and narrowed full-year fiscal 2026 adjusted EBITDA guidance to roughly $1.9 billion to $1.93 billion. Full-year net sales guidance was set near $67.25 billion to $68.25 billion. The standout was the channel mix: independent-restaurant case volume grew about 7.3%, and Convenience adjusted EBITDA jumped about 34% on the onboarding of large chain customers including Love's and RaceTrac. The next quarterly print is the read on whether independent case growth holds above the company's benchmark, which is the metric that drives margin mix.

The integration of Cheney Brothers is the swing factor. The acquisition adds roughly $3.2 billion of revenue and is expected to deliver about $50 million of run-rate cost synergies, but higher-than-expected integration costs have pressured near-term profit, alongside category deflation and elevated facility expenses. The developments to watch are the pace of synergy capture against integration spend, and whether deflation eases, since a thin-margin distributor's profit dollars move with the spread between what it buys and what it sells. Those two, synergy realization and the deflation backdrop, are the catalysts that determine whether the raised EBITDA guidance proves conservative or stretched.

Peer Cohorts (Per Segment, With Filing Citations)

Foodservice (reported)

Convenience (reported)

Specialty (reported)

Methodology Note

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

PFGC Q3 FY2026 results, 2026 · PFGC company disclosure, 2024-2026 · PFGC FY2026 guidance, 2026 · PFGC company disclosures, 2024-2026

View the full interactive PFGC report on boothcheck