On Monday night, retailer Tractor Supply
The company, which competes (depending on the market segment) with Wal-Mart
Investors following Tractor Supply's chart will notice that the shares are well off their 52-week highs (set back in January), not to mention recent levels around $40 per share set about a month ago. In fact, Tractor Supply has underperformed the S&P 500 over the last 12 months, though its longer-term trend is pretty darn impressive. Still, it's not difficult to see how all that fresh-cut grass smell might have gone to investors' heads.
Assume the company hits the high end of its latest full-year guidance and turns in full-year net income of $64.4 million, which would represent roughly 10% year-over-year net income growth. At $40 per share, the market was asking nearly 26 times next year's optimistic estimate for a share in the company -- certainly a rich valuation for a company that still needs to grow and improve operations in order to become a steady long-term cash flow provider.
Put simply, Tractor Supply -- even with its recent dip -- still has a way to fall before it looks like a value.
Fool contributor Dave Marino-Nachison doesn't own any of the companies in this story.