Casey's strategic acquisition

Casey's General Stores, Inc. continues to deliver top-line momentum, underpinned by strategic acquisitions, successful integration of new store formats, along with ongoing expansion into key growth markets. The company's deepening presence in underpenetrated regions, highlighted by its recent entrance into Michigan, demonstrates management's commitment to leveraging market opportunities.

Casey's is a convenience store chain founded in 1968 and headquartered in Ankeny, Iowa. The company operates over 2,895 stores throughout 20 Midwestern states, offering core products such as self-service gasoline, groceries, general merchandise, and freshly prepared food items including made-from-scratch pizza, donuts, and sandwiches. The company operates primarily in America through one segment.

Expanding Michigan presence

On September 28, 2025, Casey's announced the acquisition of eight convenience stores in Michigan from Maverik Inc., including seven former Kum & Go locations and one converted baked goods shop. These stores are in the Grand Rapids metro area. This acquisition strengthens the company’s presence in Michigan and enhances regional market share, supporting its long-term strategy in underserved Midwestern markets.

Steady growth trajectory

Casey's has demonstrated robust performance over FY 22-25, achieving a revenue CAGR of 7.2%, reaching $15.9bn in FY25, driven by strategic acquisitions, store network expansion, and grocery sales growth. EBITDA registered a CAGR of 14.6%, reaching USD 1.2bn. Consequently, margins improved by 117bp to 7.5%.

Over FY 22-25, FCF grew from $430.0m to $496.0m, supported by a rise in CFO from $798.0m to $1.1bn. This led to an increase in cash and cash equivalents, from $159.0m to $327.0m.

In comparison, Dollar General Corporation, a local peer, reported a revenue CAGR of 5.9% over FY 22-25, reaching $40.6bn in FY 25. EBITDA declined at a CAGR of -9.0% to $2.9bn, with margin contraction from 11.3% to 7.2%.

Over Q1 26, Casey's revenue experienced double-digit growth, driven by additional revenue from Fikes acquisition, including 198 additional convenience stores and wholesale fuel network. In addition, EBITDA margin expanded by 63bp to 9.1%.

Optimistic analyst view

Over the past year, the company delivered strong returns of 37.2%. In comparison, Dollar General delivered lower returns of 21.7% over the same period.

Casey's is currently trading at P/E of 31.9x, based on FY 26 estimated EPS of $16.4, which is higher than its 3-year historical average of 24.9x and Dollar General’s valuation of 16.3x. The company is currently trading at an EV/EBITDA multiple of 15.6x, based on FY 26 estimated EBITDA of $1.4bn, which is higher than its 3-year historical average of 12.9x and Dollar General (8.8x).

Casey's is monitored by 15 analysts, 11 of whom have ‘Buy’ ratings and four have ‘Hold’ rating for an average target price of $585.9, implying 12% upside potential over the current market price.

Analysts’ views are supported by an estimated revenue CAGR of 6.4%, reaching $19.2bn over FY 25-28. EBITDA is estimated to rise at a CAGR of 11.1% to $1.6bn with margin expansion of 103bp to 8.6% in FY 28. In addition, analysts estimate a net profit CAGR of 12.7% to $781.7m. Meanwhile, for Dollar General, analysts estimate an EBITDA CAGR of 6.5% and a net profit CAGR of 20.2% over FY 25-28.

Overall, Casey's has built a consistent track record of strong execution and resilient growth, supported by accretive acquisitions, effective operational expansion, and focus on core convenience offerings. However, the company faces risks like intense industry competition, regulatory changes, and economic downturns affecting consumer spending.