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TSCO — Tractor Supply

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2. Company Fundamentals

2.1 Competitiveness

Metric Value
Operating Margins 6.5%
Profit Margins 6.91%
Return on Equity 45.5%
Return on Assets 8.23%
Free Float 0.52B
Dividend Yield 3.08%
Short Int % Utilisation 5.18%

2.2 Growth

Metric Value
Revenue Growth 3.6%
Free Cash Flow 0.35B
EBITDA 11.43 (Ratio)
Enterprise Value 22.32B
EV/Revenue 1.43
EV/EBITDA 11.43

Revenue growth of 3.6% suggests mature or challenged top-line momentum.

2.3 Management

Role Metric
Consensus Rating N/A

2.4 Return

Metric Value
Expected Return (Ann.)* -36.66%
Risk / Std Dev (Ann.)* 32.14%
1-Year Price Return* -39.53%

Latest Market Data (as of 2026-08-14, US Eastern time):

Metric Value
Last Price $35.83
52-Week Range $28.36 – $62.89
Observation Count 250 trading days

The return and risk statistics use daily adjusted closes from the retrieved one-year series and annualise daily moments using 252 trading days. The last price is the latest regular-market price reported for the stated date. Source: Yahoo Finance market data.

DuPont Model Analysis

The DuPont model decomposes return on equity (ROE) into three operating and capital-structure drivers:

ROE = Net Margin × Asset Turnover × Equity Multiplier

The comparison uses the latest two comparable annual periods available for the issuer, with reported statement amounts shown in US$. Revenue and net income are income-statement flows; total assets and shareholders’ equity are year-end balance-sheet figures. This is a simplified year-end-balance DuPont comparison rather than an average-balance ROE calculation.

DuPont component Calculation FY2025 FY2024
Revenue Reported revenue $15.52B $14.88B
Net income Reported net income $1.10B $1.10B
Total assets Year-end reported balance $10.93B $9.81B
Shareholders’ equity Year-end reported balance $2.58B $2.27B
Net margin Net income ÷ revenue 7.06% 7.40%
Asset turnover Revenue ÷ total assets 1.4198x 1.5178x
Equity multiplier Total assets ÷ shareholders’ equity 4.2357x 4.3190x
ROE Net margin × asset turnover × equity multiplier 42.46% 48.51%

Source: Yahoo Finance annual statements. Values are based on the two latest comparable annual periods returned by the source; fiscal period labels use the statement period-end year.

2.5 FCFF DCF Valuation

Valuation basis: This research model follows a five-year, unlevered FCFF DCF. It starts from reported annual operating inputs, forecasts revenue and operating cash conversion under an explicit mechanical policy, discounts FCFF at WACC, applies a Gordon-growth terminal value, and bridges enterprise value to an indicative common-equity value per share. It is an analytical estimate rather than a recommendation or personalised target price.

Step 1 — Forecast Operating Profit and NOPAT

Reported operating input Value
Revenue $15.52B
Prior annual revenue $14.88B
EBIT $1.47B
Tax rate 21.61%
NOPAT = EBIT × (1 − tax rate) $1.15B
Forecast start-growth basis 4.31%
Forecast policy latest reported annual revenue growth, bounded to -10.00% / 15.00%

Step 2 — Calculate FCFF

Current FCFF building block Value
NOPAT $1.15B
Add: depreciation & amortisation $494.01M
Less: capital expenditure -$894.77M
Less/(add): working-capital cash-flow movement $19.89M
Current unlevered FCFF $769.42M

Explicit FCFF forecast

Forecast year Revenue growth NOPAT D&A Capex Change in NWC FCFF Present value
1 4.31% $1.20B $515.28M -$933.30M $20.75M $802.55M $780.71M
2 3.85% $1.25B $535.14M -$860.74M $21.54M $942.01M $867.19M
3 3.40% $1.29B $553.35M -$777.80M $22.28M $1.09B $946.33M
4 2.95% $1.33B $569.68M -$685.22M $22.94M $1.23B $1.02B
5 2.50% $1.36B $583.92M -$583.92M $23.51M $1.38B $1.08B

Step 3 — Determine the Discount Rate (WACC)

WACC input Value
Risk-free rate 4.71%
Equity risk premium assumption 5.50%
Beta 0.45
Cost of equity 7.20%
Pre-tax cost of debt 1.22%
WACC 5.67%
WACC validation requires assumption review

Step 4 — Estimate Terminal Value

Terminal-value input Value
Perpetuity growth rate 2.50%
Terminal value $44.69B
Implied terminal EV / EBITDA 19.28x
Terminal value as % of enterprise value 87.85%

Step 5 — Discount Cash Flows to Enterprise Value

Enterprise-value component Value
Present value of explicit FCFF $4.69B
Present value of terminal value $33.92B
Indicated enterprise value $38.61B
Discounting convention mid-year for explicit FCFF; terminal value discounted at year-end five

Step 6 — Convert Enterprise Value to Equity Value

Equity bridge Value
Indicated enterprise value $38.61B
Less: gross interest-bearing debt $5.94B
Add: cash and equivalents $194.11M
Add: affiliate investments $0.00
Less: minority interests $0.00
Indicated common equity value $32.86B

Step 7 — Calculate Indicative Value Per Share

Per-share output Value
Shares used 532,178,000.00
Share-count basis reported diluted weighted-average shares
Current market price $35.28
DCF indicative value per share $61.74
Indicative value vs. market price 75.04%

Model Integrity Checks

Check Result
Perpetuity growth is below the risk-free rate pass
Perpetuity growth is below WACC pass
WACC is within the configured operating-company range review required
Terminal-year FCFF is positive pass
Terminal capex converges to D&A pass
Terminal-value concentration within review band
Implied price differs from spot by more than 30% review required

2.6 Investor-Style Research Screen

Educational screen Result
Buffett-inspired cash-quality checks 4/4 evidenced checks
Lynch-inspired balance-and-growth checks 4/4 evidenced checks

Data lineage: Yahoo Finance public market and reported-statement data; retrieval timestamp: 2026-08-18 17:51:32.927140 UTC; latest reported fiscal period: 2025-12-31 00:00:00. Default assumptions: five-year forecast, mid-year discounting for explicit FCFF, a maximum 2.50% perpetuity-growth rate below both WACC and the risk-free rate, historical operating-ratio persistence, and capex convergence to D&A by year five. No sell-side consensus or management guidance is substituted for reported inputs. This is research and analysis only, not personalized financial advice.

2.7 Quantitative Factor Diagnostics

Model basis: Daily issuer USD excess returns are regressed in-sample using ordinary least squares on matching regional Fama–French factors. FF3 estimates market, size, and value loadings; FF5 adds profitability and investment. Coefficients are descriptive historical exposures, not predictions.

Estimation input Value
Regional factor set US
Factor-return currency USD
Issuer-return basis USD adjusted total return
Estimation window 2025-08-19 to 2026-06-30
Aligned daily observations 217
Minimum observation requirement 120
Currency conversion for HK listings not required

Fama–French Three-Factor and Five-Factor Results

Diagnostic FF3 FF5
Annualised alpha -58.58% -50.15%
Adjusted R² 0.08 0.16
Annualised residual volatility 30.10% 28.52%
Factor loading (t-statistic) FF3 FF5
Market excess return (Mkt-RF) 0.37 (2.08) 0.79 (4.07)
Size (SMB) 0.73 (3.03) 0.57 (2.34)
Value (HML) 0.16 (0.78) -0.46 (-1.92)
Profitability (RMW) NM 0.50 (2.47)
Investment (CMA) NM 1.27 (3.59)

Definitions: Mkt-RF is the market return less the risk-free rate; SMB is small minus big; HML is high minus low book-to-market; RMW is robust minus weak profitability; CMA is conservative minus aggressive investment. Factor returns are sourced from the Kenneth R. French Data Library; issuer adjusted-return history is sourced from Yahoo Finance. For Hong Kong listings, adjusted HKD prices are converted into USD with daily USD/HKD closes before return calculation to match the USD regional factor basis. This is an in-sample historical regression; coefficients and t-statistics do not establish causation or predict future returns. This is research and analysis only, not personalized financial advice.

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