Executive Summary

Casey’s General Stores, Inc. (Nasdaq: CASY) is a leading operator in the U.S. convenience store (C-store) sector, with a network of approximately 2,900 stores spanning 19 states, predominantly concentrated in the American Midwest.¹ Headquartered in Ankeny, Iowa, the company has successfully cultivated a defensible market position by strategically focusing on rural and small-town communities, where an estimated 71% of its locations serve populations of fewer than 20,000 people.² This geographic focus has allowed Casey’s to build a powerful brand and limit direct competition from larger, more urban-centric rivals.

The company’s business model is distinguished by a synergistic, three-pronged revenue structure comprising Fuel, Prepared Food & Dispensed Beverages (PF&DB), and Grocery & General Merchandise. While fuel sales constitute the largest portion of revenue, the high-margin PF&DB segment serves as the company’s primary profit engine and strategic differentiator. The renowned made-from-scratch pizza program is a cornerstone of this segment, elevating Casey’s to the status of the fifth-largest pizza chain in the United States by kitchen count and creating a destination appeal that drives significant in-store traffic independent of fuel needs.¹

Financially, Casey’s has demonstrated a consistent track record of robust performance. For the fiscal year ended April 30, 2025, the company achieved record net income of $546.5 million and record Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $1.2 billion.⁶ This financial strength is underpinned by resilient same-store sales growth, particularly within its higher-margin “inside” store categories, and exceptional discipline in managing operating expenses. Notably, the company has reduced same-store labor hours for twelve consecutive quarters, showcasing successful efficiency initiatives in a challenging inflationary environment.⁸

Casey’s is actively pursuing a multi-faceted growth strategy. This strategy is centered on disciplined unit expansion through a combination of organic new store builds and strategic acquisitions, exemplified by the recent landmark acquisition of the Fikes/CEFCO chain.⁶ Concurrently, the company is focused on continuous innovation within its high-margin food service offerings to maintain its competitive edge.⁶ A third pillar of its strategy is the enhancement of customer engagement and sales velocity through its rapidly expanding digital loyalty platform, Casey’s Rewards, which now counts over 9 million members.³

This analysis frames the central investment thesis for Casey’s as a balance of proven operational excellence against significant long-term structural headwinds. The company represents a best-in-class operator possessing a defensible geographic moat, a powerful and trusted brand, and a demonstrated ability to generate strong and consistent returns on invested capital. However, it confronts formidable long-term challenges, most notably the secular transition to electric vehicles (EVs) that threatens its core fuel business. It also navigates persistent macroeconomic pressures, including inflation’s impact on costs and consumer behavior, and operates within a highly competitive labor market. The company’s current premium valuation reflects its historical success and operational prowess, but its ability to sustain this performance will ultimately depend on its strategic execution in navigating these profound industry shifts.

Core Business and Operational Analysis

Business Model: The Modern General Store

Casey’s operates a highly effective and synergistic business model that positions its stores as essential hubs in the communities they serve, particularly in the American heartland.¹ The model is built upon three distinct but interconnected revenue segments, each playing a critical role in driving traffic and profitability.

• Fuel: This segment is the primary driver of total revenue but operates at the lowest gross margin. In fiscal 2025, fuel sales generated $9.8 billion in revenue, representing approximately 61% of the company’s total revenue. However, its gross profit contribution was $1.24 billion, or about 33% of the total gross profit.⁸ The strategic role of the fuel business extends beyond its direct profit contribution; competitively priced gasoline serves as a powerful customer acquisition tool, drawing a consistent flow of vehicle traffic to its locations, which can then be converted into higher-margin inside-store sales.¹
• Prepared Food & Dispensed Beverages (PF&DB): This segment is the company’s key strategic differentiator and its most significant profit engine on a margin basis. For fiscal 2025, the PF&DB segment generated $1.6 billion in revenue at a gross margin of 58.2%.⁸ The segment’s offerings, which include its famous made-from-scratch pizza, hot sandwiches, bakery items, and dispensed drinks, create a powerful destination appeal. This robust food service program allows Casey’s to compete effectively with Quick Service Restaurants (QSRs) and establishes a loyal customer base that visits for meals, independent of fuel needs.¹
• Grocery & General Merchandise: This segment provides the traditional convenience items expected by customers, including snacks, beverages, tobacco products, and household staples. In fiscal 2025, this segment accounted for $4.1 billion in revenue and operated at a healthy 35.0% gross margin.⁸ A key initiative within this category is the expansion of Casey’s private label offerings, which provides a value-oriented alternative for price-sensitive consumers and helps to enhance segment margins.⁵

The true strength of this model is found in the interplay between its parts. While fuel is a traffic driver, data indicates that approximately 75% of inside-store transactions do not include a fuel purchase, underscoring the food program’s power as a standalone draw.⁵ This creates a dual-attraction model that captures both the “fuel-first” customer on a routine travel path and the “food-first” customer seeking a meal. This diversified appeal provides a more resilient revenue base than that of a pure-play fuel retailer or a standalone QSR, offering a partial hedge against volatility in either sector.

Geographic Footprint & Real Estate Strategy

Casey’s strategic foundation is its deliberate focus on dominating smaller, rural markets where the competitive landscape is less intense.¹ Approximately 71% of its stores are located in towns with populations under 20,000, and a remarkable 50% are in communities with fewer than 5,000 residents.² This creates a formidable “geographic moat” that insulates it from the intense, direct competition faced by C-store chains concentrated in more saturated urban and suburban markets.

A critical and differentiating component of its strategy is its real estate ownership. The company owns the vast majority of its properties, including both the land and the buildings.³ This approach provides several distinct advantages. Financially, it offers significant flexibility and creates a substantial, often understated, real estate asset on its balance sheet. Operationally, it lowers the cost structure of its stores by eliminating rent expenses, a significant operating cost for many retail peers.¹² This ownership model becomes a strategic weapon in its M&A strategy. When evaluating the acquisition of smaller operators who often lease their locations, Casey’s can underwrite the transaction with a lower ongoing operating expense assumption, enabling it to offer a competitive price while still achieving its internal return hurdles. Furthermore, the extensive portfolio of owned real estate serves as a high-quality source of collateral, granting access to low-cost debt to fund its ambitious growth plans.⁵ This creates a self-reinforcing cycle where a superior operating model, enabled by real estate ownership, funds further growth.

Unit Economics and Store Performance

The health of a retail operation is best measured through its store-level performance metrics, where Casey’s has demonstrated consistent strength and operational discipline.

• Same-Store Sales (SSS): This metric, which measures sales growth at stores open for at least one year, is a critical indicator of underlying business health. In fiscal 2025, Casey’s delivered positive inside SSS growth of 2.6%, building upon a strong 4.4% growth in fiscal 2024, showcasing the business’s resilience in a challenging consumer environment.⁸ This growth was led by a 3.5% increase in the high-margin PF&DB category, highlighting the success of its food-centric strategy.⁸ In contrast, same-store fuel gallons sold have remained relatively flat, up just 0.1% in fiscal 2025, indicating that the company’s growth is being driven primarily by performance inside the store and the addition of new units.⁸
• Margin Profile: A key focus for management has been the expansion of the blended “inside margin,” which combines the PF&DB and Grocery segments. This metric has shown a clear positive trend, reaching 41.5% in fiscal 2025, an improvement from 41.0% in fiscal 2024.⁸ This expansion is a direct result of a favorable sales mix shift toward higher-margin prepared foods and effective cost-of-goods management. Fuel margins, while inherently volatile, have remained robust, averaging a healthy 38.7 cents per gallon in fiscal 2025.⁷
• Operational Efficiency: A standout characteristic of Casey’s performance is its exceptional ability to control operating expenses. Despite significant wage inflation across the retail sector, same-store operating expenses (excluding credit card fees) increased by a modest 1.7% in fiscal 2025.⁷ This impressive feat was achieved through a 2.4% reduction in same-store labor hours, pointing to the successful implementation of technology and process improvements designed to enhance productivity.⁷

The following table provides a detailed breakdown of Casey’s segment performance over the last three fiscal years, illustrating the dynamics between revenue contribution and profitability.

Table 1: Segment Performance Breakdown (FY 2023-2025)

Fiscal Year Ended April 30	2023	2024	2025
Revenue (in millions)
Fuel	$10,816	$9,402	$9,776
Prepared Food & Dispensed Beverage	$1,368	$1,462	$1,612
Grocery & General Merchandise	$3,400	$3,727	$4,144
Total Revenue	$15,860	$14,863	$15,941
Gross Profit (in millions)
Fuel	$945	$1,117	$1,237
Prepared Food & Dispensed Beverage	$774	$858	$937
Grocery & General Merchandise	$1,131	$1,271	$1,452
Total Gross Profit	$2,947	$3,348	$3,752
Gross Margin (%)
Fuel	8.7%	11.9%	12.7%
Prepared Food & Dispensed Beverage	56.6%	58.7%	58.2%
Grocery & General Merchandise	33.3%	34.1%	35.0%
Blended Inside Margin	39.9%	41.0%	41.5%
Total Gross Margin	18.6%	22.5%	23.5%
Note: Data compiled from company earnings releases for FY2024 and FY2025. FY2023 data derived from FY2024 release year-over-year comparisons. Totals may not sum perfectly due to rounding and “Other” revenue/profit categories not shown. 8

Industry Landscape and Competitive Positioning

U.S. Convenience Store Market Dynamics

The U.S. convenience store industry is a vast and dynamic sector of the retail economy. Globally, the market is valued at over $2 trillion and is projected to experience steady growth, with compound annual growth rate (CAGR) estimates in the range of 5% to 6%.¹³ This growth is propelled by several enduring trends, including persistent consumer demand for convenience, increasing urbanization, and a strategic industry-wide expansion of food service offerings.¹⁴

A defining characteristic of the industry is its fragmentation. Independent, single-store operators still account for the majority of establishments in the U.S..¹⁶ This structure presents a significant opportunity for well-capitalized, scaled operators like Casey’s. Smaller players are increasingly challenged by rising operating costs, persistent labor shortages, and the substantial capital investment required to compete in technology and fresh food programs.⁵ This pressure creates a favorable environment for consolidation, allowing companies like Casey’s to accelerate growth through strategic acquisitions.

The industry is also undergoing a fundamental strategic shift. Historically reliant on the sale of fuel and tobacco products, C-stores are actively pivoting toward higher-growth, higher-margin categories. The most important of these is prepared food, which is becoming the new anchor for driving traffic and profitability as demand for legacy categories faces long-term decline.⁵ Casey’s has been a clear leader at the forefront of this critical transformation.

Competitive Moat Analysis

Casey’s has successfully constructed a set of reinforcing competitive advantages, or “moats,” that protect its market position and profitability.

• Geographic Dominance: The company’s most distinct moat is its strategic focus on rural markets. An estimated 83% of Casey’s stores are located in rural areas, a concentration far exceeding that of its major competitors like Murphy USA (65%) and 7-Eleven (28%).¹⁷ This deliberate strategy limits direct, head-to-head competition with other large C-store chains, which tend to cluster in more densely populated urban and suburban corridors.
• The Pizza & Prepared Foods Differentiator: The company’s food service program is a powerful competitive weapon. Recognized as the 5th largest pizza chain in the U.S. by the number of kitchens, Casey’s functions as a Quick Service Restaurant (QSR) embedded within a convenience store.⁵ This is not merely a C-store selling incidental food items; it is a food destination in its own right. This program drives dedicated customer trips, commands exceptional brand loyalty (evidenced by 92% top-of-mind aided awareness in its core markets), and generates superior gross margins that are critical to the company’s overall profitability.⁵
• Vertical Integration & Scale: Casey’s operational infrastructure provides a significant cost and efficiency advantage. The company operates three of its own distribution centers, which supply approximately 70% of its in-store products, and maintains a private trucking fleet that delivers roughly 60% of its fuel.¹ This vertical integration gives Casey’s greater control over its supply chain, ensures product availability, and allows it to efficiently service its dispersed rural store base—a capability that smaller, independent competitors cannot replicate.⁵

These advantages do not exist in isolation but form a reinforcing system. The rural strategy reduces direct competition, which in turn allows the high-quality food program to become a dominant local QSR option. The substantial profits generated by this food business are then reinvested into technology (like the rewards program) and supply chain enhancements. These investments further widen the operational and competitive gap between Casey’s and the small, independent operators that constitute its primary local competition, creating a virtuous cycle of market share consolidation.

Peer Benchmarking

Casey’s competes against a diverse set of players, and the definition of its peer group is expanding.

• Direct C-Store Competitors: The most direct publicly-traded competitor is Murphy USA (MUSA). Several large, highly respected private chains, including Kwik Trip, QuikTrip, and Wawa, also represent significant regional competition.¹⁷

• Murphy USA: MUSA’s strategy presents a clear contrast to Casey’s. It is primarily a fuel-centric, value-driven operator, with most of its locations situated near Walmart stores to leverage shared customer traffic. MUSA has a more limited and less-developed food service offering and a geographic concentration in the Southern U.S..¹²
• Kwik Trip, QuikTrip, Wawa: These private companies are widely regarded as best-in-class operators, known for their strong corporate cultures, operational efficiency, and high-quality food programs.¹⁸ While their geographic footprints have historically had limited overlap with Casey’s core Iowa-centric markets, all are in expansion mode, which will inevitably increase competitive pressures in shared territories over time.²⁰ It is important to note that as private entities, detailed financial data for these competitors is not publicly available, limiting comparisons to qualitative and strategic observations.
• Indirect Competitors: The competitive threat is broadening beyond the C-store channel. Dollar stores, such as Dollar General, and large-format retailers, like Walmart, are aggressively expanding their grocery and convenience offerings, particularly in the rural markets that are Casey’s stronghold.²¹ Furthermore, the entire universe of
  QSRs and third-party food delivery services competes directly with Casey’s high-margin prepared food business.⁵ This blurring of competitive lines means Casey’s must be analyzed not just against other C-stores, but as a hybrid retail/QSR entity. This hybrid status helps to contextualize its premium valuation relative to more fuel-focused peers.

Financial Performance and Capital Management

Historical Financial Analysis (FY 2023-2025)

Casey’s has delivered a strong and consistent financial performance over the past several fiscal years, characterized by steady growth, margin expansion, and robust profitability.

• Revenue Growth: Total revenue increased by 7.3% in fiscal 2025 to $15.9 billion, up from $14.9 billion in fiscal 2024.²² This top-line growth was primarily driven by a strong 10.9% increase in total inside sales, which benefited from both the contribution of acquired stores and healthy organic growth.⁶ This robust inside performance successfully offset the impact of fluctuating retail fuel prices on total revenue.
• Margin Evolution: The company has demonstrated a clear ability to expand its most critical margin profiles. The blended inside gross margin, a key indicator of profitability, has steadily climbed from 39.9% in fiscal 2023 to 41.0% in fiscal 2024, and further to 41.5% in fiscal 2025.⁸ This consistent improvement is a direct result of the company’s strategic emphasis on its high-margin prepared food offerings and disciplined cost management. The EBITDA margin has also shown strength, expanding from 7.1% in fiscal 2024 to 7.5% in fiscal 2025, reflecting growing operational leverage.⁸
• Profitability & Cash Flow: This growth and margin expansion have translated directly to the bottom line. Net income grew by 8.9% to a company record of $546.5 million in fiscal 2025.⁸ Diluted earnings per share (EPS) followed suit, rising 9.0% to $14.64.⁸ The business is a strong generator of cash, with cash flow from operations reaching $1.1 billion in fiscal 2025.² For the trailing twelve months, free cash flow stood at a healthy $584.6 million, providing substantial resources for reinvestment and shareholder returns.²³

Capital Allocation Strategy

Casey’s employs a balanced and disciplined capital allocation strategy designed to drive long-term shareholder value.

• Growth Investments: The primary use of capital is to fund high-return growth. The company’s current strategic plan aims to add over 350 new stores between fiscal 2024 and 2026.⁵ This unit growth is achieved through a dual approach of new store construction and strategic M&A. The recent acquisition of the 198-store CEFCO chain from Fikes Wholesale was the largest in company history and a major deployment of capital.⁷ Management maintains strict investment criteria, targeting double-digit returns on invested capital (ROIC) for new store projects.⁵ Capital expenditures are guided to be approximately $600 million in fiscal 2026, reflecting the commitment to this growth plan.²⁴
• Shareholder Returns: Casey’s has a long and consistent history of returning capital to its shareholders.

• Dividends: In June 2025, the company announced its 26th consecutive annual increase to its dividend, raising the quarterly payout by 14% to $0.57 per share.⁸ The dividend payout ratio remains conservative at approximately 14% of earnings, providing ample room for future growth.²³
• Share Repurchases: The company complements its dividend with an opportunistic share repurchase program. For fiscal 2026, the company has announced plans for $125 million in share buybacks.⁶
• Leverage and Financial Flexibility: This balanced approach is underpinned by a commitment to maintaining a strong balance sheet. As of the end of fiscal 2025, the company’s debt-to-EBITDA ratio was a healthy 1.9x, comfortably below its long-term target of approximately 2.0x.⁵ At that time, the company had available liquidity of $1.2 billion, consisting of cash on hand and undrawn credit facilities, which provides significant capacity to fund future acquisitions and investments.²⁴

This capital allocation framework functions as a “flywheel.” The resilient core business generates over $1 billion in annual operating cash flow.² This cash is first deployed into ROIC-accretive growth projects like new stores and acquisitions.⁵ These new assets, in turn, generate additional cash flow, feeding the flywheel for future growth. The remaining cash is then allocated to a steadily growing dividend, which signals management’s confidence, and opportunistic share buybacks. The entire process is managed under a disciplined leverage target, ensuring the company can pursue growth without taking on excessive financial risk.

The consistent outperformance on same-store operating expense control is a crucial, though sometimes overlooked, driver of earnings beats and margin expansion. While analysts often focus on top-line sales growth and gross margins, Casey’s ability to limit same-store opex growth to just 1.7% in fiscal 2025 is remarkable in an inflationary environment.⁷ This control, achieved through technology and labor efficiency programs, creates powerful operating leverage, allowing a greater portion of every gross profit dollar to fall to the bottom line and contributing significantly to the company’s record of exceeding EPS expectations.²⁵

The following table summarizes Casey’s key financial metrics and performance ratios over the last three fiscal years.

Table 2: Financial Summary & Key Ratios (FY 2023-2025)

Fiscal Year Ended April 30	2023	2024	2025
Key Financials (in millions)
Total Revenue	$15,860	$14,863	$15,941
Gross Profit	$2,947	$3,348	$3,752
EBITDA	$952	$1,059	$1,200
Net Income	$447	$502	$547
Diluted EPS	$11.91	$13.43	$14.64
Operating Cash Flow	$868	$906	$1,091
Capital Expenditures	($470)	($570)	($506)
Free Cash Flow	$398	$336	$585
Key Ratios (%)
Gross Margin %	18.6%	22.5%	23.5%
EBITDA Margin %	6.0%	7.1%	7.5%
Net Margin %	2.8%	3.4%	3.4%
Return on Equity (ROE) %	18.7%	18.1%	16.8%
Debt/EBITDA (x)	1.8x	1.8x	1.9x
Note: Data compiled from company earnings releases, investor presentations, and financial data providers. FY2023-2025 EBITDA, Net Income, and EPS data from.8 FY2025 OCF and FCF from.23 Other figures derived or calculated based on available reports. 6

Strategic Initiatives and Growth Trajectory

Casey’s is executing a clear and focused strategy for growth, leveraging both organic initiatives and disciplined acquisitions to expand its market presence and enhance profitability.

Organic Growth Levers

The company is pursuing several avenues for organic growth, capitalizing on the strengths of its existing business model.

• Geographic “White Space” Expansion: Management has identified significant opportunities for new store builds, or “white space,” within its current 19-state footprint and in adjacent markets.⁵ The company’s strategic sweet spot remains towns with populations between 500 and 20,000, where it can establish a dominant market position.⁵ The stated plan to open at least 80 new stores in fiscal 2026 demonstrates a continued commitment to this organic growth pipeline.⁶
• Food Service Innovation: Continuous innovation in the PF&DB segment remains a top priority. This includes introducing new menu items, running popular limited-time offers (LTOs) like the BBQ brisket pizza, expanding offerings across different dayparts, and testing entirely new food platforms.⁶ A notable current initiative is the testing of a chicken wing and fry program in approximately 225 stores, which has shown encouraging early results.⁶ The overarching goal is to leverage food innovation to drive incremental store traffic and further expand the company’s highest-margin business.
• Digital Engagement & Loyalty: The Casey’s Rewards program is the cornerstone of the company’s digital strategy. The program has achieved significant scale, growing to over 9 million members by the end of fiscal 2025.⁸ Its strategic purpose is to increase customer loyalty, drive more frequent visits, and raise the average transaction size through personalized marketing, targeted promotions, and exclusive value offerings.⁵ Company data confirms that Rewards members visit more frequently and spend more per transaction than non-members, validating the program’s effectiveness.⁵

Inorganic Growth: A Disciplined Acquirer

In addition to organic growth, Casey’s is an active and strategic consolidator in the fragmented C-store industry.

• Consolidation Strategy: The company has a proven track record as an acquirer. The acquisition of 235 stores in fiscal 2025, which included the landmark 198-store CEFCO chain from Fikes Wholesale, was the largest transaction in the company’s history and showcases its capacity to execute large-scale M&A.⁷ Management has noted that the pipeline for potential M&A remains robust, as economic pressures continue to mount on smaller, independent operators.¹⁷
• Synergy Realization: The M&A playbook is centered on acquiring underperforming or strategically complementary chains and applying Casey’s superior operational model to drive returns. Key sources of synergy include introducing the high-margin Casey’s kitchen program into acquired stores, leveraging its scaled supply chain and fuel sourcing capabilities to reduce costs, and integrating the new locations and their customers into the powerful Casey’s Rewards loyalty program.⁵ Management’s model targets the full realization of these synergies by the fourth year following an acquisition.⁵

The company’s digital and M&A strategies are not separate initiatives but are deeply intertwined. The loyalty program, with its 9 million+ members, is a critical tool for maximizing the value of acquired stores. When Casey’s acquires a chain that may have an underdeveloped food or loyalty program, it can immediately launch targeted marketing campaigns to the existing customer base, encouraging them to enroll in Casey’s Rewards. This provides Casey’s with a rich new dataset and a direct channel to influence purchasing behavior with personalized offers, thereby accelerating the path to achieving revenue and profit synergies.

Furthermore, the company’s guidance to open “at least 80 stores” in fiscal 2026 appears conservative. Having added 270 total units in fiscal 2025, and with a strong balance sheet providing over $1.2 billion in liquidity, the company is well-positioned to exceed this baseline guidance, likely through additional bolt-on acquisitions that are not yet factored into consensus analyst estimates.⁷

Headwinds and Risk Assessment

Despite its strong operational track record, Casey’s faces a confluence of macroeconomic, industry-wide, and secular risks that could impact its future performance.

Macroeconomic and Industry-Wide Risks

• Inflationary Pressures: Inflation presents a multi-faceted headwind for Casey’s and the entire retail sector.

• Input Costs: Rising commodity prices directly impact profitability. For example, an increase in the cost of cheese, a key ingredient, from $2.12 per pound to $2.25 per pound in Q2 FY25 created a direct headwind on prepared food margins.²⁸
• Consumer Behavior: Persistent inflation is impacting consumer wallets, causing some shoppers to reduce the frequency of their C-store visits, decrease the number of items per basket, and shift purchases toward lower-priced private label brands.²⁹ A recent study noted that consumers are increasingly replacing C-store trips with visits to grocery and dollar stores to save money.³¹ While Casey’s has so far managed to post positive same-store sales, the risk of a broader consumer pullback remains a significant concern.
• Labor Costs: Wage inflation continues to be a major challenge across the retail and service industries, putting upward pressure on operating expenses.³²

• Fuel Market Volatility: While Casey’s has shifted its focus toward inside-store sales, fuel gross profit remains a major contributor to its overall earnings. These profits are inherently unpredictable, subject to the volatility of global crude oil markets, geopolitical events, and domestic supply-and-demand dynamics.¹¹ A period of sharply compressed fuel margins could have a material adverse effect on the company’s profitability.
• Labor Market Dynamics: The convenience store industry is characterized by extremely high employee turnover rates, with average associate turnover reaching 141% in 2022.³³ This, combined with intense competition for a limited pool of frontline workers, leads to elevated hiring costs (averaging $1,196 per associate) and can negatively impact store operations and customer service levels if stores are understaffed.³³ While Casey’s has demonstrated exceptional skill in managing its labor hours, it is not immune to these powerful industry-wide forces.

Secular and Company-Specific Risks

• The Electric Vehicle (EV) Transition: This represents the most significant long-term structural risk to Casey’s business model.

• Threat: The widespread consumer adoption of EVs will lead to a structural, long-term decline in demand for gasoline, which is currently Casey’s largest revenue-generating product.¹¹ This trend directly threatens the primary traffic driver for a significant portion of the company’s business.
• Opportunity: The EV transition also presents a substantial opportunity. EV drivers require charging infrastructure, and the average “dwell time” for a DC fast charge is estimated to be 15-40 minutes—significantly longer than a traditional gasoline fill-up.³⁴ This extended customer presence creates a powerful opportunity for C-stores to drive significantly higher sales of high-margin food, beverages, and merchandise. Independent studies have shown that retail locations with EV chargers experience increased foot traffic and larger average basket sizes.³⁴ Casey’s is proactively preparing for this shift by rolling out EV charging stations across its network.¹ The central long-term question for the company is whether the incremental profit from higher inside sales to EV drivers can fully offset the eventual decline in fuel gross profit.

• Competitive Intrusion: The competitive landscape in Casey’s core rural markets is intensifying. Dollar stores and mass-market retailers are expanding their convenience and grocery offerings, creating new competition for Casey’s inside-store sales.²¹
• Acquisition Integration Risk: Executing large-scale M&A, such as the recent Fikes/CEFCO transaction, carries inherent operational and financial risks. A failure to successfully integrate the acquired company’s systems, supply chain, and corporate culture could result in an inability to achieve projected synergies, which would be a drag on financial performance and returns.¹¹

While Casey’s rural focus is a key competitive strength, it also creates a unique vulnerability. The economies of many of its core markets are heavily dependent on the American agricultural sector. As noted in the company’s own risk factor disclosures, a significant downturn in the farm economy—caused by factors such as low crop prices, severe weather, or adverse trade policies—could disproportionately reduce consumer confidence and spending in its key operating regions compared to more economically diversified urban and suburban markets.¹¹

The EV transition is not a simple binary risk, but a complex operational and capital allocation challenge. The installation of DC fast chargers is highly capital-intensive, with some retailers estimating costs of $1 million to $1.5 million per site.³⁵ This will require a significant long-term shift in Casey’s capital budget, potentially competing for funds with new store construction and M&A. Furthermore, the electrical grid infrastructure in many of Casey’s rural markets may be less robust than in urban areas, potentially increasing the cost and complexity of installing the necessary high-powered charging equipment. Successfully navigating this transformation will be the defining challenge for management over the next decade.

Valuation Framework

The valuation of Casey’s General Stores reflects a market that recognizes the company’s high-quality operations but is also pricing in significant future growth. This creates a tension between the company’s strong fundamentals and its demanding valuation multiples.

Multiples-Based Valuation

An analysis of Casey’s trading multiples reveals a significant premium compared to its most direct publicly-traded peer and relative to its own historical valuation ranges.

• Current Multiples: As of August 2025, Casey’s trades at a trailing Price-to-Earnings (P/E) ratio of approximately 35.7x and an Enterprise Value-to-EBITDA (EV/EBITDA) multiple of approximately 18.5x.²² These multiples represent a premium to the broader market.
• Peer Comparison: The valuation disparity with its closest public competitor, Murphy USA (MUSA), is stark. MUSA, which operates a more fuel-centric business model, trades at a substantial discount, with a trailing P/E of approximately 15.0x and an EV/EBITDA of around 9.5x.²⁶ This wide gap underscores the market’s willingness to pay a significant premium for Casey’s superior inside-store business, its proven growth algorithm, and its powerful brand.
• Historical Context: Casey’s current valuation multiples are situated at the higher end of their historical trading range. For instance, the company’s EV/EBITDA multiple has expanded significantly, from 10.4x at the end of fiscal 2023 and 12.6x at the end of fiscal 2024 to its current level of over 18x.²³ This rapid multiple expansion suggests that investor expectations for future growth and profitability are exceptionally high.

Asset-Based Considerations

• Real Estate Value: Casey’s strategy of owning the vast majority of its approximately 2,900 locations provides a strong foundation of asset value.³ As of July 2024, the net book value of its Property and Equipment was recorded at $4.7 billion.³⁷ However, book value, which is based on historical cost less accumulated depreciation, likely understates the current market value of this extensive real estate portfolio. While a detailed real estate appraisal is beyond the scope of this analysis, the high quality of the assets is evidenced by market transactions; for example, a single Casey’s property under a triple-net (NNN) ground lease was recently listed for sale at a low 4.75% capitalization rate, implying a high valuation from real estate investors.³⁸ The total net assets on the company’s balance sheet stood at $3.5 billion as of April 2025, providing a tangible measure of value and a strong collateral base for financing.³⁹

Sum-of-the-Parts (SOTP) Framework

A Sum-of-the-Parts (SOTP) valuation provides a useful conceptual framework for understanding and justifying Casey’s premium valuation.⁴⁰ This approach involves assigning separate valuations to each of the company’s distinct business segments.

• Fuel Segment: This business could be valued on a multiple similar to that of a traditional fuel distributor and retailer, such as Murphy USA.
• Prepared Food & Dispensed Beverages (PF&DB) Segment: This high-growth, high-margin business could be valued on a multiple more akin to that of a successful QSR chain, which typically command higher valuations than retailers.
• Merchandise Segment: This segment could be valued in line with traditional convenience or grocery retailers.

This framework helps to explain the company’s blended valuation. If the market applies a premium, QSR-like multiple to the earnings stream from the fast-growing PF&DB segment and a lower, commodity-retailer multiple to the fuel segment, the resulting blended valuation can logically and justifiably exceed that of a pure-play fuel retailer like MUSA. The current market valuation suggests that investors are already implicitly using a SOTP-like approach to value the company.

Valuation Synthesis

The analysis of Casey’s valuation leads to two contrasting perspectives:

• Bullish Perspective: The current premium valuation is justified by Casey’s position as a best-in-class operator. The company possesses a defensible moat in rural markets, a superior business model driven by a high-growth food component, and a clear and executable strategy for continued unit growth and market share consolidation. Its consistent delivery of strong financial results and a shareholder-friendly capital allocation policy warrant a premium multiple.
• Bearish Perspective: The current valuation, with a P/E ratio near 36x and an EV/EBITDA multiple over 18x, appears to price in flawless execution and leaves little margin for error. The company faces undeniable long-term secular headwinds from the EV transition and near-term macroeconomic pressures on its consumer base. Any material slowdown in same-store sales growth or a significant compression in fuel margins could trigger a sharp contraction in its valuation multiples. The stock is currently trading well above the consensus analyst price target, which averages between $467 and $500, suggesting that much of the optimism is already reflected in the price.²³

The central debate over Casey’s valuation is not about the quality of the business, which is widely recognized as excellent, but rather about the terminal value of its fuel segment in a world that is steadily transitioning away from internal combustion engines. Discounted cash flow (DCF) models are highly sensitive to terminal value assumptions, and for Casey’s, the long-term growth rate of its largest revenue segment is arguably negative.⁴² The current high valuation multiple implies that the market firmly believes the growth and profitability of the inside-store business will more than compensate for the eventual decline of the fuel business. Any data that challenges this core assumption—such as slowing inside sales growth, intensifying competition from QSRs, or higher-than-anticipated capital costs for its EV charger rollout—could serve as a catalyst for a significant re-rating of the stock to a lower multiple.

The following table provides a direct valuation and operational comparison between Casey’s and its primary public competitor, Murphy USA.

Table 3: Peer Valuation Comparison

Metric	Casey’s General Stores (CASY)	Murphy USA (MUSA)
Valuation (as of Aug 2025)
Market Cap	~$19.4B 22	~$8.3B 43
Enterprise Value	~$22.1B 23	~$10.6B 44
EV / Sales (TTM)	~1.38x 23	~0.56x 36
EV / EBITDA (TTM)	~18.5x 23	~9.5x 36
P / E (TTM)	~35.7x 22	~15.0x 36
Operations (Latest FY)
Inside Sales as % of Total Sales	~36% (FY25) 8	~21% (FY24)
PF&DB Gross Margin %	58.2% (FY25) 8	N/A (Not Disclosed)
Inside SSS Growth	2.6% (FY25) 8	~3.0% (FY24)
Unit Growth (Stores)	+270 (FY25) 7	N/A (Underdelivered on goals)
Note: Data compiled from company reports and financial data providers. TTM = Trailing Twelve Months. N/A for MUSA PF&DB margin as it is not separately disclosed in the same manner as Casey’s.

Conclusion

Casey’s General Stores presents the profile of a high-quality, exceptionally well-run company operating successfully within a challenging and evolving industry. Its strategic focus on rural markets has created a durable competitive moat, insulating it from the most intense competitive pressures while allowing it to become an essential retailer and a de facto QSR leader in the communities it serves. The company’s differentiated business model, anchored by a high-margin prepared food program, has consistently driven strong financial results, including robust same-store sales growth, expanding margins, and record profitability. This operational excellence is complemented by a disciplined and shareholder-friendly capital allocation strategy that balances high-return growth investments with consistent and growing returns of capital to shareholders.

However, the investment case is not without significant complexities and long-term questions. The company’s premium valuation multiples reflect its historical success and price in a high degree of future growth and flawless execution. This leaves little room for error in an environment characterized by persistent macroeconomic headwinds, including inflationary pressures on both consumer spending and operating costs, and a fiercely competitive labor market.

The most profound challenge is the long-term, secular transition to electric vehicles. While this shift presents a clear opportunity to capture a high-value customer for extended periods, it also poses an existential threat to the company’s largest revenue segment. The central analytical question facing any investor in Casey’s is whether the future growth in high-margin inside-store sales can sustainably outpace the inevitable decline in fuel-related profits. Management’s ability to successfully navigate this transformation—operationally, strategically, and financially—over the coming decade will be the ultimate determinant of long-term shareholder value creation. The analysis suggests that while Casey’s is one of the best-positioned operators to manage this transition, the path forward is laden with both significant risk and opportunity.

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