Albertsons Companies Inc. Class A Common Stock (ACI)

FairStock Score: 22/100 — RISKY

Key Financials

Strengths

• Generates $1.5 billion in annual free cash flow (16.9% yield on market cap)
• Strong Piotroski F-Score of 8/9 indicating robust financial health across profitability, leverage, and efficiency metrics
• Attractive 4.0% dividend yield providing steady income returns

Concerns

• Trades significantly above Graham Number ($7) with negative 157% margin of safety—limited downside protection
• High leverage at 8.33x debt-to-equity increases financial risk and interest expense burden
• Currently unprofitable—sustained losses could lead to dilutive capital raises or balance sheet deterioration
• Altman Z-Score of 1.0 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Albertsons Companies Inc. Class A Common Stock is a small-cap consumer defensive company valued at $8.6 billion. Revenue stands at $83.2 billion, though the company is currently unprofitable. From a quality standpoint, Albertsons shows near-perfect Piotroski F-Score of 8/9 indicating exceptional financial health and distressed Altman Z-Score of 1.0 warrants caution. On valuation, the stock is commanding a steep 42.1x multiple, with trades far above its Graham Number ($7) with no margin of safety. Growth dynamics show revenue growing at 1.9% and profit growth of -26.8%. The 4.0% dividend yield adds an income component for patient holders. Our composite FairStock Score of 22/100 reflects below-average fundamentals overall. Without profitability, this remains speculative—suitable only for those with high risk tolerance and a long time horizon.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $1.5 billion in annual free cash flow (16.9% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 42x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer