Casey’s General Stores, Inc. (CASY): A Bull Case Theory

We came across a bullish thesis on Casey’s General Stores, Inc. (CASY) on Substack by Two Natural Capital. In this article, we will summarize the bulls’ thesis on CASY. Casey’s General Stores, Inc. (CASY)’s share was trading at $465.96 as of May 7^th. CASY’s trailing and forward P/E were 32.47 and 29.50 respectively according to Yahoo Finance.

Casey’s General Stores represents a compelling and unconventional growth story within the convenience retail and foodservice landscape, particularly due to its dominance in rural America. Operating in a traditionally uninspiring business—gas stations reliant on declining tobacco and fuel sales—Casey’s has defied the odds by leaning heavily into high-margin food offerings. Its strategy to focus on low-competition regions, with 72% of stores in towns under 20,000 people, has positioned it to not only survive but thrive by offering made-from-scratch pizza and a robust bakery lineup. This food-first approach, dating back to at least 1984, has helped transform Casey’s into the fifth-largest pizza chain in the U.S. by number of kitchens, and its food program is now central to the company’s identity and economics. Not only does this offering improve unit economics in low-traffic areas, but it also attracts customer loyalty, sometimes turning Casey’s into a dinner destination rather than just a gas stop.

The management transition in 2019, bringing in leadership with backgrounds at IHOP and 7-Eleven, has injected fresh strategy and operational discipline. Under CEO Darren Rebelez, Casey’s launched a three-year strategic plan focused on expanding store count, modernizing food offerings, and boosting operational efficiency, including reducing employee hours. Menu experimentation, like the introduction of thin crust pizza and chicken wings, aims to capture greater wallet share while avoiding food margin cannibalization—a risk that so far hasn’t materialized. The company’s growth-by-acquisition strategy has rapidly accelerated, adding 154 stores in FY24, most via M&A, capped by its largest acquisition ever: Fikes Wholesale (CEFCO), with 198 locations, many in Texas. This acquisition not only pushes Casey’s into new geographies but also offers synergy potential as 125 of the CEFCO stores already have kitchens ready for pizza rollouts and margin improvement.

Despite these strengths, skeptics question whether Casey’s acquisitive streak may be overreaching. However, the company’s manageable leverage (~2x EBITDA), long growth runway (it is a fraction the size of Couche-Tard or 7-Eleven), and embedded operational advantage in fresh food make that fear seem overstated. In fact, Casey’s rural legacy has become a competitive strength as it enters denser markets where competitors like Murphy USA don’t offer prepared food. Casey’s unique combination of fuel, convenience, and compelling food gives it a durable edge that’s difficult for other chains to replicate quickly, making it one of the more differentiated retail growth stories in the market today.

Casey’s General Stores, Inc. (CASY) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 38 hedge fund portfolios held CASY at the end of the fourth quarter which was 34 in the previous quarter. While we acknowledge the risk and potential of CASY as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than CASY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.