Why shouldn’t I buy a ton of Tractor Supply (TSCO)
u/ultra__star ·
Reddit — r/ValueInvesting
· May 04, 2026 at 22:23
· ⬆ 28 pts
· 💬 39 comments
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AI Summary
Summary
The author argues that Tractor Supply (TSCO) is deeply undervalued after a ~50% drop from its August 2025 peak, trading at 15.9x earnings with a ~3% dividend yield.
Thesis: TSCO is not just a "hobby store" – 50% of revenue comes from animal feed/pet products, the business remains profitable and growing, and it has a clear expansion path (e.g., California) and a 2030 growth target.
Quality: Moderately well-researched DD; uses annual report data, personal observation, and valuation metrics, but lacks detailed financial model or competitive analysis.
Score28
Comments39
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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?
TSCO trades at 15.9x earnings with a ~3% dividend yield, down ~50% from its August 2025 high, while the business remains profitable and growing (50% revenue from stable animal feed/pet products). The market overreacted to DEI backlash and a single earnings miss, ignoring the company's essential, recurring revenue base and long-term expansion plans (e.g., California under-penetration, 2030 growth targets). At these levels, TSCO offers a compelling long-term compounder with a margin of safety – buy into the panic for 10+ year holding. Further earnings misses, consumer spending slowdown in rural areas, increased competition from online retailers, or renewed anti-DEI sentiment hurting brand perception.