Key insights
- The author presents a bullish case for Tractor Supply (TSCO), arguing that its recent stock decline due to earnings miss and DEI-related backlash presents a buying opportunity. They highlight the company's strong fundamentals, growth potential, attractive valuation (15.9x earnings, ~3% dividend yield), and expansion opportunities, particularly in states like California. The author suggests a long-term investment horizon.
TSCO took an initial beating by the anti-DEI crowd in 2024-2025, and it has now been beat down even more because its earnings report didn’t meet estimates, even though the business is still very much profitable and growing, and the business is still very fundamentally sound.
According to the 2025 annual report, 50% of TSCO’s revenue comes from animal feed and animal companion products despite sentiment that it’s a “hobby store”. First hand, as someone who lives in the midwest, and road trips often, as you will find there are many Tractor Supply stores opening, and operating filled with shoppers.
Currently TSCO is selling at 15.9X earnings with a nearly 3% dividend yield. They’re down roughly 50% from their August 2025 peak of approx $62 a shade.
The business has acceptable credit and a clear trajectory to meet its growth goal by 2030. The business has a lot of room to expand in many states, such as California where it has fewer stores than many smaller midwestern states.
Why not go substantially in as a 10+ year compounded at these prices?