INGLES MARKETS INC (IMKTA) Stock Analysis
INGLES MARKETS INC (IMKTA) Stock Analysis
Overall Grade: F (Concerning)
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INGLES MARKETS INC faces challenges in financial performance that warrant careful analysis.
Key Metrics:
| Metric | Value | Context |
|---|---|---|
| ROIC | 5.7% | Below expectations |
| FCF Margin | 2.3% | Cash flow pressure |
| Debt/Equity | 0.3x | Conservative leverage |
Investment Thesis: Financial metrics indicate concerning business quality with areas requiring attention.
What is INGLES MARKETS INC's Profitability and ROIC?
INGLES MARKETS INC's return on invested capital of 5.7% is below the typical cost of capital. Gross margin of 24.1% with operating margin at 2.5% reflects the company's moderate market position.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 5.7% | Warning | Below cost of capital |
| Return on Equity (ROE) | 6.0% | Warning | Moderate equity returns |
| Gross Margin | 24.1% | Adequate | Competitive pricing environment |
| Operating Margin | 2.5% | Warning | Moderate operational efficiency |
How Strong is INGLES MARKETS INC's Cash Flow Quality?
INGLES MARKETS INC generated $123.1M in free cash flow over the trailing twelve months, representing a 2.3% margin. Cash earnings quality is strong, with operating cash flow exceeding net income by 2.5x.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Free Cash Flow Margin | 2.3% | Warning | Thin cash margins |
| Free Cash Flow (TTM) | $123.1M | Good | Positive cash generation |
| OCF/Net Income | 2.5x | Excellent | High earnings quality |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
What is INGLES MARKETS INC's Financial Health?
INGLES MARKETS INC's debt-to-equity ratio of 0.3x indicates conservative leverage.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Debt to Equity | 0.3x | Good | Conservative capital structure |
| Net Cash Position | $-149.8M | Adequate | Net debt position |
Is INGLES MARKETS INC Stock Overvalued or Undervalued?
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| EV/Sales | 0.0x | Excellent | Attractive revenue multiple |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 5.7% | Bottom 50% | 0.6x below |
| Free Cash Flow Margin | 2.3% | Bottom 50% | 0.7x below |
| Gross Margin | 24.1% | Bottom 25% | 0.6x below |
| Operating Margin | 2.5% | Bottom 50% | 0.5x below |
| Return on Equity (ROE) | 6.0% | Bottom 50% | 0.5x below |
Rating Thresholds
Return on Invested Capital (ROIC)
Measures how efficiently a company uses its debt and equity capital to generate profits. ROIC above 15% typically indicates a competitive moat.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 20% | Exceptional capital efficiency, strong competitive moat |
| Good | 12% - 20% | Above-average returns, sustainable competitive position |
| Adequate | 8% - 12% | Around cost of capital, moderate competitive position |
| Warning | 4% - 8% | Below cost of capital, value may be eroding |
| Red flag | < 4% | Significant capital destruction, fundamental issues |
Current: 5.7% (Warning - Bottom 50% of sector (median: 9.8%))
Free Cash Flow Margin
The percentage of revenue converted to free cash flow. Higher margins indicate stronger cash generation and business quality.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 20% | Strong cash generation, high-quality business |
| Good | 10% - 20% | Healthy cash conversion |
| Adequate | 5% - 10% | Moderate cash generation |
| Warning | 0% - 5% | Thin cash margins, capital intensive |
| Red flag | < 0% | Cash burn, potential liquidity concerns |
Current: 2.3% (Warning - Bottom 50% of sector (median: 3.2%))
Gross Margin
Revenue minus cost of goods sold as a percentage. Higher gross margins indicate pricing power and competitive advantage.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 50% | Strong pricing power and competitive moat |
| Good | 30% - 50% | Healthy margins, differentiated product |
| Adequate | 20% - 30% | Moderate margins, competitive industry |
| Warning | 10% - 20% | Thin margins, commodity-like business |
| Red flag | < 10% | Very thin margins, structural challenges |
Current: 24.1% (Adequate - Bottom 25% of sector (median: 40.9%))
Debt to Equity Ratio
Total debt divided by shareholders' equity. Lower ratios indicate more conservative financing and reduced financial risk.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | < 0.3x | Conservative leverage, strong balance sheet |
| Good | 0.3x - 0.7x | Moderate leverage, healthy financial position |
| Adequate | 0.7x - 1.5x | Elevated leverage, monitor closely |
| Warning | 1.5x - 3.0x | High leverage, increased financial risk |
| Red flag | > 3.0x | Excessive leverage, potential distress risk |
Current: 31.2% (Good)
Frequently Asked Questions
Q: What is INGLES MARKETS INC's Return on Invested Capital (ROIC)?
INGLES MARKETS INC (IMKTA) has a trailing twelve-month Return on Invested Capital (ROIC) of 5.7%. This compares below the sector median of 9.8%. An ROIC below 8% suggests the company may be destroying shareholder value.
Q: What is INGLES MARKETS INC's Free Cash Flow Margin?
INGLES MARKETS INC (IMKTA) has a free cash flow margin of 2.3%, generating $123.1 million in free cash flow over the trailing twelve months. A thin FCF margin may indicate heavy reinvestment or operational challenges.
Q: Is INGLES MARKETS INC stock overvalued or undervalued?
INGLES MARKETS INC (IMKTA) The EV/Sales multiple is 0.0x.
Q: What is INGLES MARKETS INC's revenue and earnings growth?
INGLES MARKETS INC (IMKTA) declined revenue by 0.5% year-over-year. Net income grew by 20.8% year-over-year. Revenue decline may indicate market challenges or industry headwinds.
Q: How does INGLES MARKETS INC compare to competitors in Consumer Discretionary?
Compared to other companies in Consumer Discretionary, INGLES MARKETS INC (IMKTA) shows: ROIC of 5.7% is below the sector median of 9.8% (Bottom 34%). FCF margin of 2.3% trails the sector median of 3.2% (Bottom 42% of sector). Gross margin at 24.1% is 16.7 percentage points lower than sector peers. These rankings are based on MetricDuck's analysis of all Consumer Discretionary companies with available SEC filings.
Q: What warning signs should I watch for with INGLES MARKETS INC?
Investors in INGLES MARKETS INC (IMKTA) should monitor these potential warning signs: 1) FCF margin is thin at 2.3%, leaving limited buffer for economic downturns. Regular monitoring of SEC filings and quarterly trends is recommended.
Data Source: Data sourced from 10-K filed 2025-11-26. TTM metrics as of Q4 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
This analysis is for informational purposes only and does not constitute investment advice.