BJ's Wholesale Club Holdings Inc. Common Stock (BJ)

FairStock Score: 52/100 — MIXED

Key Financials

Strengths

• Generates $198 million in annual free cash flow (1.6% yield on market cap)
• High return on equity of 28.6% demonstrating efficient capital deployment
• Established organization with 35,000 employees providing operational scale

Concerns

• Trades significantly above Graham Number ($41) with negative 134% margin of safety—limited downside protection

AI Analysis

BJ's Wholesale Club Holdings Inc. Common Stock is a mid-cap consumer defensive company valued at $12.4 billion. The business generates $21.5 billion in annual revenue with a 0.6% net margin and $198 million in free cash flow. From a quality standpoint, BJ's shows Altman Z-Score of 2.3 in the grey zone and strong 29% ROE. On valuation, the stock is reasonably priced at 22.1x earnings, with trades far above its Graham Number ($41) with no margin of safety. Growth dynamics show revenue growing at 5.6% and profit growth of 2.6%. Our composite FairStock Score of 52/100 reflects mixed fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $198 million in annual free cash flow (1.6% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the consumer defensive space. 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